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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): March 12, 2012 |
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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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incorporation) |
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20 Kingsbridge Road, Piscataway, New Jersey |
08854 |
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(Address of principal executive offices) |
(Zip Code) |
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(732) 980-4500 |
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Not Applicable |
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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)) |
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Item 2.02 |
Results of Operations and Financial Condition. |
On March 12, 2012, Enzon Pharmaceuticals, Inc. issued a press release reporting certain financial and other information for the fourth-quarter and full-year 2011. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K 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.
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Item 9.01 |
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Financial Statements and Exhibits. |
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(d) |
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Exhibits |
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Exhibit |
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Description |
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99.1 |
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Press Release of Enzon Pharmaceuticals, Inc. dated March 12, 2012 |
SIGNATURES
Pursuant to the requirements of the Securities 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: March 12, 2012 |
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 INDEX
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Exhibit |
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Description |
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99.1 |
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Press Release of Enzon Pharmaceuticals, Inc. dated March 12, 2012 |
Exhibit 99.1
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Investor Contact: |
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Andrea Rabney |
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Argot Partners |
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212.600.1902 |
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andrea@argotpartners.com |
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Media Contact: |
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Meghan Feeks |
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Argot Partners |
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212.600.1902 |
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meghan@argotpartners.com |
Enzon Reports Fourth Quarter and Full-Year 2011 Results
PISCATAWAY, N.J. -- March 12, 2012 -- Enzon Pharmaceuticals, Inc. (Nasdaq: ENZN) today announced its financial results for the fourth-quarter and full-year 2011. For the three months ended December 31, 2011, Enzon reported a loss from continuing operations of $5.0 million, or $0.10 per diluted share, compared to a loss from continuing operations of $9.6 million, or $0.16 per diluted share, for the three months ended December 31, 2010. For the full year ended December 31, 2011, Enzon reported a loss from continuing operations of $20.8 million, or $0.40 per diluted share, compared to a loss from continuing operations of $2.8 million, or $0.05 per diluted share, for the full year ended December 31, 2010.
2011 Highlights
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In December, at the San Antonio Breast Cancer Symposium, Enzon presented data from a Phase II study in which PEG-SN38 demonstrated notable activity in patients with previously treated metastatic breast cancer. Study investigators concluded that PEG-SN38 warrants further clinical study in metastatic breast cancer. Enzon is currently seeking a strategic partner to further develop and commercialize PEG-SN38 in breast cancer as well as in other malignancies; absent such a partnership, the Company does not intend to fund further development of PEG-SN38. |
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In November, at the 2011 AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics, Enzon presented clinical and preclinical data from three messenger RNA (mRNA) product candidates based on the Company’s locked nucleic acid (LNA) technology program. Data presented were from a Phase I study of EZN-3042 in combination with docetaxel targeting Survivin mRNA, a preclinical study of EZN-3920 targeting HER3 mRNA, and a preclinical study of EZN-3892 targeting β-catenin mRNA. |
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At the 2011 American Association of Cancer Research (AACR) Annual Meeting in April, Enzon presented data from two preclinical and two clinical studies of four investigational mRNA antagonists, demonstrating the compounds’ potential to inhibit key tumor targets. |
1
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In September, Enzon announced a reduction in force, which will reduce the number of employees to fewer than 50 by 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. |
Summary of Financial Results
Research and Development
The Company’s pipeline research and development expenses were $9.1 million for the three months ended December 31, 2011, compared to $14.0 million for the three months ended December 31, 2010. For the full year 2011, research and development expenses were $40.2 million, compared to $49.9 million in 2010. Such expenses in 2010 included an expense of $7.0 million in milestone payments related to ongoing advancement of its LNA targets, including three 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 to $3.5 million for the three months ended December 31, 2011, compared to $4.9 million for the three months ended December 31, 2010. For the full year 2011, the Company incurred general and administrative expenses of $17.3 million, compared to $25.4 million for the full year 2010. The decline in 2011 from 2010 was largely the result of several restructuring programs implemented over the past year, as well as the effects of our ongoing cost containment efforts.
Cash and Investments
Total cash reserves, which include cash, cash equivalents, short-term investments, and marketable securities, were $323.3 million as of December 31, 2011, compared to $460.1 million as of December 31, 2010. The decrease was primarily attributable to Enzon’s use of cash to repurchase shares under its $200.0 million share repurchase program, which the Company initiated in late December 2010. The Company purchased a total of 11.5 million shares of its outstanding common stock for a cumulative cost of $121.5 million through December 2011. During the third quarter of 2011, the Company decided to suspend the share repurchase program. The Company intends to resume repurchasing shares of outstanding common stock under this program. Share repurchases under this program may be made through open market or privately negotiated transactions at such times and in such amounts as Enzon deems appropriate, based on a variety of factors such as price, corporate and regulatory requirements and overall market conditions. There can be no assurance as to the number of shares Enzon will purchase, if any. The share repurchase program may be modified, suspended or terminated at any time without prior notice.
2
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 mRNA antagonists 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.
Forward-Looking Statements
This press release contains, or may contain, forward-looking statements within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release, other than statements that are purely historical, are forward-looking statements, 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. Forward-looking statements in this press release include, but are not limited to: (i) statements regarding Enzon’s intent with respect to funding further development of PEG-SN38, (ii) statements regarding the reduction in force, including its expected results, (iii) statements regarding the possibility of increased sales of PEGINTRON in the future resulting from the FDA’s approval of Incivik™ and Victrelis™ for chronic hepatitis C and (iv) statements regarding Enzon’s intent to resume repurchasing shares under its share repurchase program.
Such forward-looking statements are based upon management’s present expectations, objectives, anticipation, plans, hopes, beliefs, intentions or strategies regarding the future and are subject to known and unknown risks and uncertainties that could cause actual results, events or developments to be materially different from those indicated in such forward-looking statements including but, not limited, to (i)uncertainty regarding the impact of the reduction in force on Enzon’s results, (ii) uncertainty regarding the impact, if any, of the FDA’s approval of Incivik™ and Victrelis™ for chronic hepatitis C on sales of PEGINTRON (iii) uncertainty as to the number of shares Enzon will purchase, if any, (iv) whether Enzon will be able to successfully complete the share repurchase program in a manner that complies with applicable laws and regulations, (v) the time it may take for Enzon to complete the share repurchase program and economic and market conditions and (vi) other corporate liquidity requirements and priorities. 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 Annual Report on Form 10-K for the year ended December 31, 2011. 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
Consolidated Statements of Operations
(Unaudited; In thousands, except per share amounts)
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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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$ |
9,782 |
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$ |
10,549 |
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Sale of in-process research and development |
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— |
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— |
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Contract research and development |
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52 |
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1,845 |
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Miscellaneous revenue |
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177 |
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124 |
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Total Revenues |
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10,011 |
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12,518 |
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Operating Expenses: |
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Research and development - pipeline |
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9,135 |
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14,032 |
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Research and development - specialty and contracted services |
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48 |
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1,120 |
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General and administrative |
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3,466 |
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4,905 |
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General and administrative - contracted services |
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1 |
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49 |
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Restructuring charges |
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1,376 |
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2,974 |
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Total Operating Expenses |
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14,026 |
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23,080 |
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Operating Loss |
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(4,015 |
) |
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(10,562 |
) |
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Other Income (Expense) |
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Investment income, net |
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484 |
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573 |
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Interest expense |
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(1,490 |
) |
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(680 |
) |
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Other-than-temporary impairment loss |
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— |
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— |
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Other, net |
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— |
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1,039 |
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Total Other Income (Expense) |
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(1,006 |
) |
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932 |
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Loss from continuing operations before taxes |
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(5,021 |
) |
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(9,630 |
) |
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Income tax benefit |
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— |
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(1 |
) |
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Loss from continuing operations |
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|
(5,021 |
) |
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(9,629 |
) |
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Income and gain from discontinued operations, net of taxes |
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— |
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1,041 |
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Net Loss |
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$ |
(5,021 |
) |
$ |
(8,588 |
) |
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Loss per common share - continuing operations - basic and diluted |
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$ |
(0.10 |
) |
$ |
(0.16 |
) |
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Earnings per common share - discontinued operations - basic and diluted |
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$ |
— |
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$ |
0.02 |
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Loss per common share - net loss - basic and diluted |
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$ |
(0.10 |
) |
$ |
(0.14 |
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Weighted average shares - basic and diluted |
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48,289 |
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59,747 |
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4
Enzon Pharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share amounts)
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Year ended December 31, |
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2011 |
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2010 |
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Revenues: |
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Royalties |
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$ |
40,923 |
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$ |
44,940 |
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Sale of in-process research and development |
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5,000 |
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40,900 |
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Contract research and development |
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1,431 |
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9,273 |
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Miscellaneous revenue |
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718 |
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2,752 |
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Total Revenues |
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48,072 |
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97,865 |
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Operating Expenses: |
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Research and development - pipeline |
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40,180 |
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49,883 |
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Research and development - specialty and contracted services |
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|
926 |
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7,135 |
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General and administrative |
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17,281 |
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25,439 |
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General and administrative - contracted services |
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115 |
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1,957 |
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Restructuring charges |
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6,025 |
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14,026 |
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Total Operating Expenses |
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64,527 |
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|
98,440 |
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Operating Loss |
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(16,455 |
) |
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(575 |
) |
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Other Income (Expense) |
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Investment income, net |
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1,735 |
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|
3,465 |
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Interest expense |
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|
(5,929 |
) |
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(6,315 |
) |
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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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|
91 |
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|
1,184 |
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Total Other Expense |
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(4,103 |
) |
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(2,562 |
) |
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|
|
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|
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|
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|
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Loss from continuing operations before taxes |
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(20,558 |
) |
|
(3,137 |
) |
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Income tax expense (benefit) |
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|
205 |
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|
(337 |
) |
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|
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Loss from continuing operations |
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|
(20,763 |
) |
|
(2,800 |
) |
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Income and gain from discontinued operations, net of taxes |
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— |
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|
180,043 |
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Net (Loss) Income |
|
$ |
(20,763 |
) |
$ |
177,243 |
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|
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|
|
|
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Loss per common share - continuing operations - basic and diluted |
|
$ |
(0.40 |
) |
$ |
(0.05 |
) |
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|
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|
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Earnings per common share - discontinued operations - basic and diluted |
|
$ |
— |
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$ |
3.08 |
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|
|
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|
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|
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(Loss) earnings per common share - net (loss) income - basic and diluted |
|
$ |
(0.40 |
) |
$ |
3.03 |
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|
|
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Weighted average shares - basic and diluted |
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|
51,910 |
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|
58,466 |
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5
Enzon Pharmaceuticals, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
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December
31, |
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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 |
|
$ |
104,324 |
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$ |
397,530 |
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Marketable securities - available-for-sale |
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|
58,188 |
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|
31,170 |
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Other current assets |
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2,749 |
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5,916 |
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Total current assets |
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165,261 |
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|
434,616 |
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Property and equipment, net |
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16,802 |
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|
21,574 |
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Marketable securities |
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160,779 |
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|
31,394 |
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Other assets |
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|
367 |
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|
1,273 |
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Total Assets |
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$ |
343,209 |
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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 |
|
$ |
1,572 |
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$ |
4,192 |
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Accrued expenses and other current liabilities |
|
|
13,692 |
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|
14,195 |
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Total current liabilities |
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15,264 |
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|
18,387 |
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Notes payable |
|
|
129,499 |
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|
134,499 |
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Other liabilities |
|
|
1,265 |
|
|
4,114 |
|
|
|
|
|
|
|
|
|
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Total Liabilities |
|
$ |
146,028 |
|
$ |
157,000 |
|
|
|
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|
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Total Stockholders’ Equity |
|
$ |
197,181 |
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$ |
331,857 |
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|
|
|
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|
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|
|
|
|
|
|
|
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Total Liabilities and Stockholders’ Equity |
|
$ |
343,209 |
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$ |
488,857 |
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6