Enzon Files Form 10-Q for Quarter Ended December 31, 2002; Reflects Non-Cash Revision to Second Quarter Financial Results.Business Editors BRIDGEWATER, N.J.--(BUSINESS WIRE)--Feb. 18, 2003 Enzon, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ENZN) announced today it has filed its Form 10-Q Form 10-Q See 10-Q. which included a non-cash revision to its previously announced financial results for the quarter ended December 31, 2002 to reflect a reduction in the carrying amount of its investment in Nektar Therapeutics (NASDAQ:NKTR), formerly Inhale in·hale v. 1. To breathe in; inspire. 2. To draw something such as smoke or a medicinal mist into the lungs by breathing; inspire. Therapeutics. In January 2002, the Company entered into a broad strategic alliance with Nektar to co-develop products utilizing both companies' proprietary drug delivery platforms. As a part of this agreement, the Company purchased $40 million of newly issued Nektar convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". , which is convertible into Nektar common stock at a current conversion price of $22.79 per share. Under the cost method of accounting, investments are carried at cost and are adjusted only for other-than-temporary declines in fair value, distributions of earnings and additional investments. As a result of the continued decline in the price of Nektar's common stock, the Company determined that the decline in the value of its investment in Nektar was other-than-temporary. The Company based its write-down on a continuing review conducted up until the time it filed its Form 10-Q pursuant to U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 59, related to the need to record impairment charges when it is deemed that a reduced market value of an investment is other-than-temporary. Accordingly, during the three months ended December 31, 2002, the Company recorded a write down of the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of its investment in Nektar, which resulted in a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $27.2 million. The adjustment was calculated based on an assessment of the estimated realizable value of the investment. "Today's announcement is solely related to our adherence to accounting regulations and does not reflect a change in Enzon's commitment to our alliance with Nektar, which has already brought three promising PEG licensing deals to Enzon, nor our belief in the solid fundamentals that exist at Nektar," said Kenneth Zuerblis, Enzon's vice president finance and chief financial officer. The fair value of the Company's investment in Nektar has been below the Company's cost for a period of time and further, since the trading price Trading price The price at which a security is currently selling. of the underlying common stock has continued to decline in the last several weeks, it has been deemed that this impairment is other-than-temporary. In order to reflect this impairment, the Company adjusted the carrying value of its investment by approximately $27.2 million to the estimated realizable value of the preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . The Company's statement of operations See Income statement. for the quarter ended December 31, 2002 reflects a net loss of $15.0 million, or $0.35 per share. The recording of this non-cash charge revises the Company's previously announced net income for the quarter ended December 31, 2002 of $12.0 million, or $0.28 per diluted share. On a cash basis, the Company's earnings have not changed. Enzon Pharmaceuticals is a biopharmaceutical company dedicated to the discovery, development and commercialization of therapeutics to treat life-threatening diseases. The company has developed three marketed products, including PEG-INTRON(R), marketed by Schering-Plough. Enzon's product-focused strategy includes an extensive drug development program that leverages the Company's PEG modification and single-chain antibody (SCA (Single Connector Attachment) An 80-pin plug and socket used to connect peripherals. With a SCSI drive, it rolls three cables (power, data channel and ID configuration) into one connector for fast installation and removal. (R)) technologies. Internal research and development efforts are complemented by strategic transactions that provide access to additional products, projects, and technologies. Enzon has several drug candidates in various stages of development, independently and with partners. Except for the historical information herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors, which are described in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , Form 10-Q's and Form 8-K's on file with the SEC, including without limitation, risks in obtaining and maintaining regulatory approval for indications and expanded indications, market acceptance of and continuing demand for Enzon's products and the impact of competitive products and pricing and fluctuations in the price and trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. of Enzon stock. This release is also available at http://www.enzon.com |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion