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UNITED STATES |
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SECURITIES AND EXCHANGE COMMISSION |
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WASHINGTON, DC 20549 |
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FORM 8-K |
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CURRENT REPORT |
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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Date of Report (Date of earliest event reported): November 3, 2011 |
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ENZON PHARMACEUTICALS, INC. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
0-12957 |
22-2372868 |
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(State or other jurisdiction of |
(Commission File Number) |
(IRS Employer Identification No.) |
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20 Kingsbridge Road, Piscataway, New Jersey |
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08854 |
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(Address of principal executive offices) |
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(Zip Code) |
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(732) 980-4500 |
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(Registrant’s telephone number, including area code) |
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Not Applicable |
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(Former name or former address, if changed since last report) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On November 3, 2011, Enzon Pharmaceuticals, Inc. issued a press release reporting certain financial and other information for the quarter ended September 30, 2011. A copy of the press release is attached as Exhibit 99.1 to this Current Report and is incorporated by reference into this Item 2.02.
The information in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise stated in that filing.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit No. |
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Description |
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99.1 |
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Press Release of Enzon Pharmaceuticals, Inc. November 3, 2011 |
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ENZON PHARMACEUTICALS, INC. |
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(Registrant) |
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Date: November 3, 2011 |
By: |
/s/ Andrew Rackear |
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Name: Andrew Rackear |
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Title: Vice President and General Counsel |
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Exhibit 99.1
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For Immediate Release |
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Investor Contact: |
Andrea Rabney |
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Argot Partners |
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212.600.1902 |
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andrea@argotpartners.com |
ENZON REPORTS 3rd QUARTER 2011 RESULTS
PISCATAWAY, NJ – November 3, 2011 – Enzon Pharmaceuticals, Inc. (Nasdaq: ENZN) today announced its financial results for the third quarter of 2011. For the third quarter of 2011, Enzon reported a loss from continuing operations of $9.1 million, or $0.19 diluted loss per share, as compared to a loss from continuing operations of $8.4 million, or $0.14 diluted loss per share, for the third quarter of 2010.
Third Quarter 2011 and Recent Highlights
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In October, Ana I. Stancic, C.P.A., M.B.A., was promoted to Chief Operating Officer, Principal Executive Officer and Executive Vice President. Ms. Stancic will also continue serving in her role as Chief Financial Officer. Ralph Del Campo, M.B.A., former Chief Operating Officer and Principal Executive Officer, stepped down from his position to pursue other interests. |
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In October, Enzon also announced that the Board of Directors has formed a special committee to oversee the Company’s scientific and clinical development. The committee is comprised of Directors Richard A. Young, Ph.D., who will act as chairman, and Thomas F. Deuel, M.D. |
Summary of Financial Results
Revenues
Royalty Revenue
Revenues
received from the Company’s royalty products for the three months ended
September 30, 2011 were $10.2 million, as compared to $10.9 million for the
three months ended September 30, 2010. Royalties on PEGINTRON, marketed by
Merck & Co., Inc., continue to comprise the majority of the Company’s
royalty revenue and a reported decline in sales of PEGINTRON accounted for all
of the decrease in royalty revenue. Two new treatments for chronic hepatitis C,
Incivik® and Vectrilis®, were recently approved this year in the U.S. and E.U.
These treatments are indicated for use in combination with ribavirin and
peginterferon alfa. Enzon believes that the approval of these drugs may result
in increased sales of PEGINTRON in the future; however, the Company has no
clear evidence at this point of what impact, if any, these new therapies for
hepatitis C may have on sales of PEGINTRON.
Research and Development
The
Company’s pipeline research and development expenses were $10.4 million for the
three months ended September 30, 2011, as compared to $14.2 million for the
three months ended September 30, 2010.
The pipeline consists of the following clinical programs: PEG-SN38 and the mRNA
antagonists Hypoxia-Inducible Factor-1α (HIF-1α), Survivin and
Androgen Receptor (AR). In addition, the Company has other novel LNA targets in
various stages of preclinical research.
General and Administrative
General
and administrative expenses decreased approximately 12 percent to $4.1 million
for the three months ended September 30, 2011, as compared to $4.7 million for
the three months ended September 30, 2010.
Restructuring
In
September 2011, Enzon announced a reduction in force, which will reduce the
number of employees by approximately 48 percent, to a total of 47, effective
June 2012. Enzon expects the reduction in force to result in approximately $6.0
million in reduced annualized operating expenses once the plan is fully
implemented by the second quarter of 2012. In connection with the reduction in
force, the Company incurred a restructuring charge in the third quarter of 2011
of approximately $2.9 million. The Company also incurred restructuring charges
of $0.7 million related to termination fees to exit the lease on the former
Bridgewater headquarters, bringing the total restructuring charges to $3.6
million for the third quarter of 2011.
Cash and Investments
Total
cash reserves, which include cash, cash equivalents, and investments in
marketable securities, were $333.0 million as of September 30, 2011, as
compared to $460.1 million as of December 31, 2010. During the third quarter of
2011, the Company expended approximately $24.8 million to purchase 2.5 million
shares of its outstanding common stock. Since the inception of a share
repurchase program in December 2010 to purchase up to $200 million of its
common stock, the Company has purchased a total of 11.5 million shares of its
outstanding common stock for a cumulative cost of $121.5 million through
September 30, 2011. During the third quarter of 2011, the Company decided to
suspend the share repurchase program. Enzon is in the process of assessing its
options with respect to the repurchase program and analyzing the optimal
utilization of its existing cash and royalty stream.
About Enzon
Enzon
Pharmaceuticals, Inc. is a biotechnology company dedicated to the research and
development of innovative therapeutics for cancer patients with high unmet
medical needs. Enzon’s drug-development programs utilize two platforms -
Customized PEGylation Linker Technology (Customized Linker Technology®)
and third-generation mRNA-targeting agents utilizing the Locked Nucleic Acid
(LNA) technology. Enzon currently has four compounds in human clinical
development and multiple novel LNA targets in preclinical research. Enzon
receives royalty revenues from licensing arrangements with other companies
related to sales of products developed using its proprietary Customized Linker
Technology. Further information about Enzon and this press release can be found
on the Company’s website at www.enzon.com.
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Forward Looking Statements
There are forward-looking statements contained herein, which
can be identified by the use of forward-looking terminology such as the words
“believes,” “expects,” “may,” “will,” “should,” “potential,” “anticipates,”
“plans,” or “intends” and similar expressions. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause
actual results, events or developments to be materially different from the
future results, events or developments indicated in such forward-looking
statements. Such factors include but are not limited to the timing, success and
cost of clinical studies for Enzon’s product candidates, the ability to obtain regulatory approval of Enzon’s product
candidates, Enzon’s ability to obtain the funding necessary to develop its
product candidates, market acceptance of and demand for Enzon’s product
candidates, and the impact of competitive products, pricing and technology. A
more detailed discussion of these and other factors that could affect results
is contained in Enzon’s filings with the U.S. Securities and Exchange
Commission, including Enzon’s most recent Annual Report on Form 10-K for the
year ended December 31, 2010. These factors should be considered carefully and
readers are cautioned not to place undue reliance on such forward-looking
statements. No assurance can be given that the future results covered by the
forward-looking statements will be achieved. All information in this press
release is as of the date of this press release and Enzon does not intend to
update this information.
3
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three months ended |
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2011 |
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2010 |
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Revenues: |
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Royalties |
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$ |
10,207 |
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$ |
10,902 |
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Contract research and development |
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54 |
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2,217 |
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Miscellaneous revenue |
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179 |
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111 |
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Total revenues |
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10,440 |
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13,230 |
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Operating expenses: |
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Research and development – pipeline |
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10,436 |
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14,206 |
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Research and development – specialty and contracted services |
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47 |
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1,197 |
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General and administrative |
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4,102 |
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4,682 |
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General and administrative – contracted services |
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2 |
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86 |
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Restructuring charge |
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3,616 |
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453 |
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Total operating expenses |
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18,203 |
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20,624 |
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Operating loss |
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(7,763 |
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(7,394 |
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Other income (expense): |
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Investment income, net |
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407 |
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1,110 |
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Interest expense |
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(1,480 |
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(1,479 |
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Other-than-temporary impairment loss |
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— |
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(896 |
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Other, net |
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(69 |
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174 |
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Total other expense |
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(1,142 |
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(1,091 |
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Loss from continuing operations, before income tax expense (benefit) |
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(8,905 |
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(8,485 |
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Income tax expense (benefit) |
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200 |
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(131 |
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Net loss |
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$ |
(9,105 |
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$ |
(8,354 |
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Loss per common share |
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Basic and diluted |
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$ |
(0.19 |
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$ |
(0.14 |
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Weighted average shares – basic and diluted |
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48,729 |
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60,840 |
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4
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
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September 30, |
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December 31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
304,995 |
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$ |
397,530 |
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Marketable securities – available-for-sale |
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25,250 |
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31,170 |
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Other current assets |
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2,920 |
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5,916 |
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Total current assets |
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333,165 |
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434,616 |
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Property and equipment, net |
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18,065 |
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21,574 |
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Marketable securities |
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2,743 |
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31,394 |
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Other assets |
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565 |
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1,273 |
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Total assets |
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$ |
354,538 |
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$ |
488,857 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
757 |
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$ |
4,192 |
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Accrued expenses and other |
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14,009 |
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14,195 |
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Total current liabilities |
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14,766 |
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18,387 |
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Notes payable |
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134,499 |
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134,499 |
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Other liabilities |
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3,533 |
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4,114 |
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Total liabilities |
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152,798 |
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157,000 |
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Stockholders’ equity |
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201,740 |
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331,857 |
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Total liabilities and stockholders’ equity |
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$ |
354,538 |
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$ |
488,857 |
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Common shares outstanding |
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48,273 |
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58,818 |
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5