Enzon Pharmaceuticals Reports Third Quarter Financial Results; Total Revenues Increase by 118% and Phase II Clinical Trials Initiated for PROTHECAN in Gastric Cancer.Business Editors/Health Editors BRIDGEWATER Bridgewater, town (1990 pop. 21,249), Plymouth co., E Mass.; inc. 1656. Manufacturing includes shoes and metal products. Its iron foundry industry dates from colonial times. Bridgewater State College and a state prison are there. , N.J.--(BUSINESS WIRE)--May 13, 2003 Enzon Pharmaceuticals, 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 its financial results for the quarter ended March 31, 2003, the third quarter of Enzon's fiscal year (FY) 2003. The Company's adjusted net income for the third quarter of FY 2003 was $9.0 million or $0.21 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, as compared to adjusted net income of $9.2 million or $0.21 per diluted share for the third quarter of FY 2002. For comparative purposes, the Company's adjusted net income for the third quarter of FY 2003 excludes approximately $1.4 million in costs incurred to date related to the Company's proposed merger with NPS NPS National Park Service NPS Naval Postgraduate School NPS Net Promoter Score (customer management) NPS Non-Point Source pollution NPS Native Plant Society NPS Norfolk Public Schools (Virginia) Pharmaceuticals, Inc. (NASDAQ: NPSP NPSP New Parent Support Program NPSP National Polio Surveillance Project (India) NPSP Native Plant Stewardship Program (Washington Native Plant Society) NPSP Nonparametric Statistical Package ). Adjusted net income for the third quarter of FY 2002 excludes $3 million in other income related to a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. payment for the reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. of certain legal fees from Nektar If you want to read about Czech Republic's beer Nektar. Nektar is a 1970s English progressive rock band based in Germany. History The band formed in Hamburg, Germany in 1969, members included Englishmen Roye Albrighton on guitars and vocals, Allan "Taff" Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. , Inc. (NASDAQ: NKTR). On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, net income for the quarter ended March 31, 2003 was $7.6 million or $0.17 per diluted share, as compared to $12.2 million or $0.28 per diluted share for the third quarter of FY 2002. Enzon has reported adjusted net income, which excludes the impact of isolated transactions specific to each of its third quarters. The Company believes the adjusted net income is more indicative of the underlying operations of the business and represents a more comparative measure. Total revenues for the quarter increased by $23.3 million or 118 percent, to $43.1 million, as compared to $19.8 million for the prior year period. The increase in revenues for the quarter ended March 31, 2003 was principally due to net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $18.3 million related to the acquisition of the ABELCET(R) business. During November November: see month. 2002, the Company acquired the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. rights and operational assets associated with the development, manufacture, sales and marketing for ABELCET (Amphotericin B Lipid Complex amphotericin B lipid complex Warning - High-alert drug! Abelcet Pharmacologic class: Systemic polyene antifungal Therapeutic class: Antifungal Injection) from Elan (Emulated LAN) A virtual LAN in the ATM world. See LANE and virtual LAN. Elan - ["Top-down Programming with Elan", C.H.A. Koster, Ellis Horwood 1987]. Corporation, plc (NYSE NYSE See: New York Stock Exchange : ELN Noun 1. ELN - a Marxist terrorist group formed in 1963 by Colombian intellectuals who were inspired by the Cuban Revolution; responsible for a campaign of mass kidnappings and resistance to the government's efforts to stop the drug trade; "ELN kidnappers target ). Combined sales of the three other products marketed by the Company (ADAGEN(R), ONCASPAR(R), and DEPOCYT(R)) were $8.3 million for the third quarter of FY 2003, as compared to $5.7 million for the third quarter of FY 2002, an increase of $2.6 million or 46 percent. The increase was due to increases in sales of ADAGEN and ONCASPAR, and the commencement of sales of DEPOCYT in January January: see month. 2003. Effective December December: see month. 31, 2002, Enzon licensed the North American rights to DEPOCYT from SkyePharma PLC (NASDAQ:SKYE). DEPOCYT is an injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. chemotherapeutic chemotherapeutic adjective Referring to a chemotherapeutic agent, effect or regimen noun Chemotherapeutic agent, see there approved for the treatment of patients with lymphomatous lymphomatous pertaining to, or of the nature of, lymphoma. meningitis meningitis (mĕnĭnjī`tĭs) or cerebrospinal meningitis (sĕr'əbrōspī`nəl), acute inflammation of the meninges, the membranes that cover and protect the brain and spinal cord. . Enzon is marketing DEPOCYT through its specialty sales force and product sales for the quarter were $1.2 million. ADAGEN sales for the third quarter of FY 2003 were $4.3 million, as compared to $3.5 million for the third quarter of FY 2002. Sales of ONCASPAR were $2.8 million for the third quarter of FY 2003, as compared to $2.2 million for the third quarter of FY 2002. Total royalties for the third quarter of FY 2003 were $16.2 million, as compared to $14.1 million for the third quarter of FY 2002, representing an increase of 15 percent. The increase is primarily due to increased sales, compared to the prior year, of PEG-INTRON by Enzon's marketing partner, Schering-Plough Schering-Plough Corporation (NYSE: SGP) is a pharmaceutical company which traces its history back to 1851 when Ernst Schering founded Schering AG in Germany. Following the entry of the United States into World War II in 1941, U.S. Corporation. "We are pleased with the continued progress made at Enzon this quarter, which was highlighted by the launches of ABELCET and DEPOCYT," said Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism J. Higgins Higgins may refer to: People with the surname Higgins:
Hepatitis C is a form of liver inflammation that causes primarily a long-lasting (chronic) disease. Acute (newly developed) hepatitis C is rarely observed as the early disease is generally quite mild. has expanded since the launch of PEGASYS." "While strategically we made important progress this quarter, our financial results were impacted by items specific to this quarter, such as the expenditures related to our proposed merger with NPS," said Kenneth J. Zuerblis, Enzon's vice president finance and chief financial officer. "Financial information, recently received from Schering-Plough, has revealed that this quarter's PEG-INTRON royalties were negatively impacted, as compared to the December quarter, by a reduction in trade inventories, as a result of Schering-Plough's elimination of its Access Assurance Program and the related transition from sole to multi-source distributors. We believe that Schering-Plough is committed to maintain its leadership position in the alpha interferon market and we continue to encourage investors to look beyond quarterly fluctuations and focus on PEG-INTRON's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. potential." Research and development expenses for the third quarter of FY 2003 were consistent with the prior year's levels at $5.1 million. Increased expenditures related to the Company's 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. ) collaboration Working together on a project. See collaborative software. with Micromet AG were offset by reductions in certain expenditures due to the Company's January 2003 decision to suspend its Phase I PEG-paclitaxel program. Enzon and Micromet have established a new R&D Unit, located at Micromet's facility in Germany, and the partnership is currently conducting research with therapeutic SCA proteins for selected indications. Recently, Enzon initiated patient dosing in a Phase II clinical trial Noun 1. phase II clinical trial - a clinical trial on more persons than in phase I; intended to evaluate the efficacy of a treatment for the condition it is intended to treat; possible side effects are monitored phase II for PROTHECAN(R) in patients with gastric cancer gastric cancer Stomach cancer, see there and has completed enrollment of stage one, namely 15 patients, of this trial. Provided the clinical program for PROTHECAN remains on track, it is the Company's intention to identify the indications for its Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA program by the end of the calendar year. The Company expects its research and development expenditures to increase in future quarters as the Company continues to invest in the expansion of its product pipeline. Selling, general and administrative expenses for the third quarter of FY 2003 increased by $5.9 million or 162 percent to $9.5 million, as compared to $3.6 million for the second quarter of FY 2002. This increase was due to a $5.9 million increase in sales and marketing expenditures related to the Company's acquisition of the North American rights to ABELCET, which included the hiring of a hospital sales force. Amortization costs for the third quarter of FY 2003 were $4.0 million, as compared to $35,000 for the prior year comparable period. This increase relates to the Company's $360 million acquisition of ABELCET and the related acquired intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . Interest income for the quarter ended March 31, 2003 decreased by $3.3 million to $633,000, as compared to $3.9 million for the third quarter of FY 2002. The decrease was primarily due to a reduction in the Company's interest-bearing investments resulting from the Company's purchase of the North American rights to ABELCET in November 2002 for a cash payment of $360 million, as well as a decrease in interest rates. The following table reconciles the Company's adjusted net income to GAAP net income for the third quarter of FY 2003 and the third quarter of FY 2002:
Third Quarter Third Quarter
FY 2003 FY 2002
------------ ---------------
Adjusted Net Income $ 9,032,339 $ 9,167,075
Less: Merger Expenses (1,398,343)(1) --
Add: Other Income -- 3,000,000 (2)
----------- -----------
GAAP Net Income $ 7,633,996 $12,167,075
=========== ===========
(1) Expenses related to the Company's announced merger with NPS
Pharmaceuticals, Inc.
(2) Reimbursement of certain legal fees from Nektar Therapeutics.
The management of Enzon will be hosting a conference call today, May 13, 2003 at 5:00 PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . All interested parties can access the live call using the following information:
Domestic Dial-In Number 877-531-2987
International Dial-In Number 651-224-7582
Access Code 681412
Enzon's conference call will also be webcast in a "listen only" mode via the internet at http://www.vcall.com. Additionally, for those parties unable to listen at the time of Enzon's conference call, a rebroadcast will be available following the call from Tuesday, May 13, 2003 at approximately 10:15 PM EDT. This rebroadcast will end on Tuesday May 20, 2003 at midnight. The rebroadcast may be accessed using the following information:
Domestic Dial-In Number 800-475-6701
International Dial-In Number 320-365-3844
Access Code 681412
Enzon Pharmaceuticals is a biopharmaceutical company dedicated to the discovery, development and commercialization of therapeutics to treat life-threatening diseases. The company has developed or acquired a number of marketed products, including PEG-INTRON, marketed by Schering-Plough, and ABELCET, which is marketed in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. by Enzon. Enzon's product-focused strategy includes an extensive drug development program that leverages the Company's PEG peg 1. To fix the price of a new security issue during the issuance period through buying and selling it in the open market in order to ensure that the price in the secondary market will not fall below the offering price. modification and single-chain antibody (SCA(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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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, Enzon's dependence on Schering-Plough's effective marketing of PEG-INTRON; Enzon's ability to sustain profitability; risks in obtaining and maintaining regulatory approval for indications and expanded indications, market acceptance of and continuing demand for Enzon's product, timing and results of clinical trials and the impact of competitive products and pricing, the NPS and Enzon businesses may not be integrated successfully; costs related to the proposed merger may be significant and greater than we expect; and the NPS or Enzon stockholders may fail to approve the proposed merger. All information in this press release is as of May 13, 2003, and the Company undertakes no duty to update this information. Additional information and where to find it In connection with the proposed NPS/Enzon merger, NPS, Enzon, and Momentum Merger Corporation (which will be renamed by NPS and Enzon in connection with the proposed merger) have filed a joint proxy statement/prospectus with the Securities and Exchange Commission (the "SEC") in connection with the proposed merger. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE TRANSACTION. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when it is available) and other documents filed by NPS and Enzon with the SEC at the SEC's web site at www.sec.gov or by contacting NPS at 801-583-4939 and through NPS' web site at www.npsp.com, or by contacting Enzon at 908-541-8678 and through Enzon's web site at www.enzon.com. Enzon and its directors and executive officers may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies from the stockholders of Enzon and NPS in connection with the proposed merger transaction. Information regarding the special interests of these directors and executive officers in the transaction is included in the joint proxy statement/prospectus described above. Additional information regarding these directors and executive officers is also included in Enzon's proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. for its 2002 Annual Meeting of Stockholders, which was filed with the SEC on or about October 28, 2002. This document is available free of charge at the SEC's web site at www.sec.gov or by contacting Enzon at 908-541-8678. NPS and its directors and executive officers also may be deemed to be participants in the solicitation of proxies from the stockholders of NPS and Enzon in connection with the transaction described herein. Information regarding the special interests of these directors and executive officers in the proposed merger transaction is included in the joint proxy statement/prospectus described above. Additional information regarding these directors and executive officers is also included in NPS' proxy statement for its 2002 Annual Meeting of Stockholders, which was filed with the SEC on or about April 19, 2002. This document is available free of charge at the SEC's web site at www.sec.gov or by contacting NPS at 801-583-4939 and through the NPS website at www.npsp.com. This release is also available at http://www.enzon.com
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months ended March 31, 2003 and 2002
(Unaudited)
March 31, March 31,
2003 2002
---------------------------
Revenues:
Net sales $26,637,205 $ 5,712,250
Royalties 16,241,900 14,089,254
Contract revenue 283,750 42,649
----------- -------------
Total revenues 43,162,855 19,844,153
----------- -------------
Costs and expenses:
Cost of sales 11,079,560 1,376,450
Research and development expenses 5,132,373 5,062,732
Selling, general and administrative
expenses 9,480,949 3,623,134
Merger expenses 1,398,343 --
Amortization of acquired intangibles 3,959,809 35,487
----------- -------------
Total costs and expenses 31,051,034 10,097,803
----------- -------------
Operating income 12,111,821 9,746,350
----------- -------------
Other income (expense):
Investment income, net 632,616 3,892,568
Interest expense (4,957,143) (4,956,895)
Other income 2,518 3,217,878
----------- -------------
(4,322,009) 2,153,551
----------- -------------
Income before taxes 7,789,812 11,899,901
Tax provision (benefit) 155,816 (267,174)
----------- ------------
Net income 7,633,996 12,167,075
=========== ===========
Basic earnings per common share 0.18 0.28
============= ===========
Diluted earnings per common share 0.17 0.28
=========== ===========
Weighted average number of common shares
issued and outstanding - basic 43,192,415 42,969,222
=========== ============
Weighted average number of common shares
issued and outstanding and dilutive
potential common shares outstanding 43,634,145 43,933,865
=========== ============
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months ended March 31, 2003 and 2002
(Unaudited)
March 31, March 31,
2003 2002
---------------------------
Revenues:
Net sales $41,745,350 $ 16,666,055
Royalties 57,565,046 33,706,040
Contract revenue 417,350 217,548
------------ ------------
Total revenues 99,727,746 50,589,643
------------ ------------
Costs and expenses:
Cost of sales 17,858,811 4,222,870
Research and development expenses 14,886,328 12,548,297
Selling, general and administrative
expenses 20,785,652 12,198,942
Merger expenses 1,398,343 --
Amortization of acquired intangibles 5,288,129 106,461
Write-down of carrying value of
investments 27,236,507 --
------------ ------------
Total costs and expenses 87,453,770 29,076,570
------------ ------------
Operating income 12,273,976 21,513,073
------------ ------------
Other income (expense):
Investment income, net 8,429,785 14,819,789
Interest expense (14,871,451) (14,871,764)
Other income 3,471 3,217,878
------------ ------------
(6,438,195) 3,165,903
------------ ------------
Income before taxes 5,835,781 24,678,976
Tax provision (benefit) 661,466 (363,845)
------------- -----------
Net income $ 5,174,315 $ 25,042,821
============= ===========
Basic earnings per common share $ 0.12 $ 0.59
============ ============
Diluted earnings per common share $ 0.12 $ 0.57
============ ============
Weighted average number of common shares
Issued and outstanding - basic 43,061,170 42,635,799
============ ===========
Weighted average number of common shares
issued and outstanding and dilutive
potential common shares outstanding 43,611,453 43,899,449
============ ===========
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