Enzon Reports 121% Increase in Third Quarter Earnings; PEG-INTRON Royalties Continue to Drive Earnings.Business Editors/Health & Medical Writers PISCATAWAY, N.J.--(BUSINESS WIRE)--May 8, 2002 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 its financial results for the quarter ended March 31, 2002, the third quarter of Enzon's fiscal year (FY) 2002. The Company's net earnings for the third quarter FY 2002 grew to $12.2 million or $0.28 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 $5.5 million or $0.13 per diluted share, for the same period in FY 2001. Total revenues for the quarter increased by $9.9 million, or 100 percent, to $19.8 million, as compared to $9.9 million for the prior year's comparable period. The increase in revenues for the quarter was principally due to increased royalties earned on sales of PEG-INTRON(TM) by the Company's marketing partner, Schering-Plough Corporation. Total royalties on marketed products that utilize Enzon's PEG technology increased to $14.1 million during the third quarter of FY 2002, as compared to $2.4 million for the same period in FY 2001. In October 2001, Schering-Plough launched PEG-INTRON and REBETOL combination therapy in the U.S. for the treatment of chronic hepatitis Chronic hepatitis Long lasting inflammation of the liver due to viruses or other causes. Mentioned in: Tube Compression of the Esophagus and Stomach chronic hepatitis C. The PEG-INTRON and REBETOL treatment regimen regimen /reg·i·men/ (rej´i-men) a strictly regulated scheme of diet, exercise, or other activity designed to achieve certain ends. reg·i·men n. 1. is the first and only pegylated interferon-based combination therapy approved in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Combined sales of the Company's other two FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. approved products, ONCASPAR(R) and ADAGEN(R), increased by 6 percent to $5.7 million in the third quarter of FY 2002, as compared to $5.4 million for the same period in FY 2001 primarily due to increased sales of ONCASPAR. "Enzon is pleased to report another quarter of strong revenue and earnings growth," said Arthur J. Higgins, Enzon's chairman and chief executive officer. "The start of this year has presented difficult market conditions for the biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. sector but we feel that our outlook for strong earnings growth and limited regulatory approval risk should position Enzon to outperform Outperform An analyst recommendation meaning a stock is expected to do slightly better than the market return. Notes: Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy. the sector." Research and development expenses for the third quarter of FY 2002 increased by $1.4 million or 37 percent to $5.1 million, as compared to $3.7 million for the third quarter of FY 2001. The increase was due primarily to increased research and development expenditures related to the advancement of the Company's preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. and clinical PEG product pipeline, as well as increased personnel and related expenditures. Enzon is currently conducting Phase II clinical trials 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) (PEG-camptothecin), Phase I clinical trials Noun 1. phase I clinical trial - a clinical trial on a few persons to determine the safety of a new drug or invasive medical device; for drugs, dosage or toxicity limits should be obtained phase I for PEG-paclitaxel, and preclinical studies preclinical studies, n.pl a term used to describe research done before a clinical study. May be laboratory or epidemiologic research. for other PEG products in development. During the quarter ended March 31, 2002, Enzon initiated patient dosing in a Phase II clinical trial for PROTHECAN in patients with non-small cell lung cancer Lung Cancer, Non-Small Cell Definition Non-small cell lung cancer (NSCLC) is a disease in which the cells of the lung tissues grow uncontrollably and form tumors. Description There are two kinds of lung cancers, primary and secondary. . The Company expects to initiate additional Phase II trials for PROTHECAN as both a single agent and in combination with other oncolytics. Research and development expenses are expected to continue to increase significantly as the Company continues the clinical advancement of its PEG product pipeline and continues to strengthen its internal development capabilities. Selling, general and administrative expenses for the third quarter of FY 2002 increased by $1.1 million or 39 percent to $3.7 million, as compared to $2.6 million for the third quarter of FY 2001. This increase was primarily due to increases in payroll and related expenditures. During the third quarter of FY 2002, interest income increased to $3.9 million, as compared to $2.3 million for the third quarter of FY 2001 as a result of increased interest-bearing investments. Interest expense increased to $4.9 million for the third quarter of FY 2002. For the third quarter of FY 2001 the Company did not record any interest expense. The increases in interest-bearing investments and interest expense are due to the issuance of $400 million of 4.5% convertible subordinated notes during June 2001. As of March 31, 2002 Enzon had total cash and interest-bearing investments of $489 million. Included in other income for the quarter ended March 31, 2002 is a one-time payment of $3 million. This payment was related to the broad strategic alliance that Enzon and 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 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: INHL INHL Institute for Nursing Healthcare Leadership ) announced in January 2002 and represents reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for certain legal fees. Company management of Enzon will be hosting a conference call today, May 8, 2002 at 9:45AM EST EST electroshock therapy. EST abbr. electroshock therapy . All interested parties can access the live call using the following information: Domestic Dial-In Number 877-209-9919 International Dial-In Number 612-288-0329 Access Code 635020 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 Wednesday, May 8, 2002 at approximately 3:15pm. This rebroadcast will end on Wednesday, May 15, 2002 at 11:59pm. 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 635020 Enzon is a biopharmaceutical company that develops and commercializes enhanced therapeutics for life-threatening diseases through the application of its proprietary platform technologies: PEG Modification and single-chain antibodies (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)). Three products are currently marketed which utilize Enzon's technology: PEG-INTRON marketed by Schering-Plough for hepatitis C Hepatitis C Definition 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. , ONCASPAR(R) for Acute Lymphoblastic Leukemia acute lymphoblastic leukemia n. Abbr. ALL Lymphoblastic leukemia occurring mainly in older adults, characterized by rapid onset and progression of symptoms. Also called acute lymphocytic leukemia. (ALL), and ADAGEN(R) a treatment for a form of Severe Combined Immunodeficiency Disease Noun 1. severe combined immunodeficiency disease - a congenital disease affecting T cells that can result from a mutation in any one of several different genes; children with it are susceptible to infectious disease; if untreated it is lethal within the first year or (SCID SCID severe combined immunodeficiency (disease); see under immunodeficiency. SCID abbr. severe combined immunodeficiency SCID severe combined immunodeficiency disease. ), commonly known as the "Bubble Boy Disease." In addition to three approved products, Enzon has several products in various stages of clinical development by itself and with partners, including additional indications for PEG-INTRON with Schering-Plough. A Phase III clinical trial Noun 1. phase III clinical trial - 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 is being conducted for PEG-INTRON for the treatment of malignant melanoma Malignant Melanoma Definition Malignant melanoma is a type of cancer arising from the melanocyte cells of the skin. Melanocytes are cells in the skin that produce a pigment called melanin. . Enzon develops and markets products on its own, through strategic alliances and licensing arrangements, which in addition to Schering-Plough Corporation, include Aventis, Alexion Pharmaceuticals, Inc., Baxter Healthcare Corporation, Bristol-Myers Squibb Bristol-Myers Squibb (NYSE: BMY), colloquially referred to as BMS, is a pharmaceutical corporation, formed by a 1989 merger between pharmaceutical companies Bristol-Myers Company, founded in 1887 by William McLaren Bristol and John Ripley Myers in Clinton, NY (both were Company, Eli Lilly Eli Lilly can refer to:
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, regulatory risks such as risks in obtaining and maintaining regulatory approval for indications and expanded indications, risks that Enzon will not outperform the sector, risks related to research and development costs and capabilities, market acceptance of and continuing demand for Enzon's products and the impact of competitive products and pricing. This release is also available at http://www.enzon.com
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months ended March 31, 2002 and 2001
(Unaudited)
March 31, March 31,
2002 2001
--------------------- ----------------------
Revenues:
Net sales $5,729,330 $5,382,060
Royalties 14,072,174 2,410,200
Contract revenue 42,649 2,139,494
----------------- ----------------
Total revenues 19,844,153 9,931,754
----------------- ----------------
Costs and expenses:
Cost of sales 1,376,450 988,380
Research and development
expenses 5,062,732 3,684,268
Selling, general and
administrative expenses 3,658,621 2,640,889
----------------- ----------------
Total costs and expenses 10,097,803 7,313,537
----------------- ----------------
Operating income 9,746,350 2,618,217
----------------- ----------------
Other income (expense):
Interest income 3,892,568 2,255,642
Interest expense (4,956,895) --
Other income 3,217,878 1,483
----------------- -----------------
2,153,551 2,257,125
----------------- ----------------
Income before taxes 11,899,901 4,875,342
Tax benefit 267,174 632,879
----------------- -----------------
Net income $12,167,075 $5,508,221
================= ================
Basic earnings per
common share $0.28 $0.13
================= ================
Diluted earnings per
common share $0.28 $0.13
================= ================
Weighted average number of
common shares
issued and outstanding - basic 42,969,222 41,802,586
================= ================
Weighted average number of
common shares issued
and outstanding and dilutive
potential common
shares outstanding 43,933,865 43,718,044
================= ================
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months ended March 31, 2002 and 2001
(Unaudited)
March 31, March 31,
2002 2001
----------------- -----------------
Revenues:
Net sales $16,683,135 $14,964,832
Royalties 33,688,960 3,701,897
Contract revenue 217,548 2,457,784
----------------- ----------------
Total revenues 50,589,643 21,124,513
----------------- ----------------
Costs and expenses:
Cost of sales 4,222,870 2,860,592
Research and development
expenses 12,548,297 8,829,537
Selling, general and
administrative expenses 12,305,403 8,228,926
----------------- ----------------
Total costs and expenses 29,076,570 19,919,055
----------------- ----------------
Operating income 21,513,073 1,205,458
----------------- ----------------
Other income (expense):
Interest income 14,819,789 6,420,343
Interest expense (14,871,764) --
Other income 3,217,878 13,352
----------------- ----------------
3,165,903 6,433,695
----------------- ----------------
Income before taxes 24,678,976 7,639,153
Tax benefit 363,845 577,603
---------------- ----------------
Net income $25,042,821 $8,216,756
================= ================
Basic earnings per common share $0.59 $0.20
================= ================
Diluted earnings per common share $0.57 $0.19
================= ================
Weighted average number of
common shares issued and
outstanding - basic 42,635,799 41,490,866
================= ================
Weighted average number of
common shares issued and
outstanding and dilutive
potential common
shares outstanding 43,899,449 43,509,342
================= ================
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