Enzon Reports Record Fourth Quarter and Fiscal Year Results; Fourth Quarter Revenues Increase by 141%.Business & Health Editors BRIDGEWATER, N.J.--(BUSINESS WIRE)--Aug. 13, 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 and fiscal year (FY) ended June 30, 2002. Excluding the recognition of an $8.8 million net income tax benefit, the Company's fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the fourth quarter of FY 2002 was $0.27. The Company's net income for the fourth quarter of FY 2002 grew to $20.8 million or $0.47 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 $3.3 million or $0.08 per diluted share, for the same period in FY 2001. "Fiscal year 2002 was a significant year for Enzon with notable progress made along all aspects of our business," said Arthur J. Higgins, Enzon's chairman and chief executive officer. "We intend to use our financial strength and organizational momentum to more aggressively advance our product pipeline and execute strategic initiatives that are in alignment with our commitment to deliver superior long-term earnings growth." The increase in net income was principally due to increased royalties earned on sales of PEG-INTRON(TM). Total royalties increased to $19.6 million during the fourth quarter of FY 2002, as compared to $4.5 million for the same period in FY 2001. In October 2001, our marketing partner, 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 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), decreased by 5 percent to $5.5 million in the fourth quarter of FY 2002, as compared to $5.8 million for the same period in FY 2001 primarily due to the timing of ONCASPAR shipments. Research and development expenses for the fourth quarter of FY 2002 increased by $1.7 million or 39 percent to $5.9 million, as compared to $4.2 million for the fourth 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 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. 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) in three oncology oncology /on·col·o·gy/ (ong-kol´ah-je) the sum of knowledge regarding tumors; the study of tumors. on·col·o·gy n. indications: small cell lung, pancreatic pancreatic /pan·cre·at·ic/ (pan?kre-at´ik) pertaining to the pancreas. pancreatic pertaining to the pancreas. See also pancreatitis, diabetes mellitus, cystic pancreatic duct. , and non-small cell lung cancers 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. . 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 are also ongoing. 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 fourth quarter of FY 2002 increased by $800 thousand or 23 percent to $4.4 million, as compared to $3.6 million for the fourth quarter of FY 2001. This increase was primarily due to increases in payroll and related personnel expenditures. During the fourth quarter of FY 2002, interest income increased to $3.9 million, as compared to $2.0 million for the fourth quarter of FY 2001 as a result of increased interest-bearing investments. Interest expense increased to $5.0 million for the fourth quarter of FY 2002, as compared to $275 thousand for the comparable period in FY 2001. 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 June 30, 2002 Enzon had total cash and interest-bearing investments of $485 million. During the quarter ended June 30, 2002, the Company recognized a net tax benefit of $8.8 million, primarily related to the Company's net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. expected to be utilized in FY 2003. The Company's pre-tax and post-tax earnings per diluted share are summarized within the following selected financial information:
Three Months Ended Twelve Months Ended
------------------- --------------------
06/30/02 06/30/01 06/30/02 06/30/01
-------- -------- -------- --------
Income before taxes $12,003,959 $3,374,264 $36,682,935 $11,013,417
Pre-tax earnings per
diluted share $0.27 $0.08 $0.83 $0.25
Income tax benefit
(expense) $8,759,563 ($65,956) $9,123,408 $511,647
Net income $20,763,522 $3,308,308 $45,806,343 $11,525,064
Diluted earnings
per share $0.47 $0.08 $1.04 $0.26
Fully diluted shares 43,839,982 43,956,840 44,025,783 43,606,194
For the fiscal year ended June 30, 2002, Enzon's net income was $45.8 million or $1.04 per diluted share, compared to net income of $11.5 million or $0.26 per diluted share for the year ended June 30, 2001. The increase in net income for FY 2002 was primarily due to increased royalties related to products that utilize Enzon's PEG technology. Company management of Enzon will be hosting a conference call today, August 13, 2002, at 9:45AM EST EST electroshock therapy. EST abbr. electroshock therapy to discuss the financial results for the quarter ended June 30, 2002 and provide financial guidance for the fiscal year ending June 30, 2003. All interested parties can access the live call using the following information:
Domestic Dial-In Number: 877-260-8899
International Dial-In Number: 612-288-0329
Access Code: 645674
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, August 13, 2002 at approximately 3:15PM EST. This rebroadcast will end on Tuesday, August 20, 2002 at 11:59PM EST. 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: 645674
Enzon is a biopharmaceutical company that develops and commercializes enhanced 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. 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, 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:
v. 1. To breathe in; inspire. 2. To draw something such as smoke or a medicinal mist into the lungs by breathing; inspire. Therapeutics, Inc., and Micromet AG. 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 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, risks related to research and development costs and capabilities, market acceptance of and continuing demand for Enzon's products and the impact of increased competition, competitive products and pricing. This release is also available at http://www.enzon.com.
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months ended June 30, 2002 and 2001
(unaudited)
June 30, 2002 June 30, 2001
------------- -------------
Revenues:
Net sales $5,499,569 $5,803,935
Royalties 19,640,534 4,549,337
Contract revenue 75,000 109,924
------ ----------
Total revenues 25,215,103 10,463,196
---------- ----------
Costs and expenses:
Cost of sales 1,854,584 1,003,692
Research and development expenses 5,878,563 4,222,177
Selling, general and
administrative expenses 4,381,962 3,566,472
--------- ---------
Total costs and expenses 12,115,109 8,792,341
---------- ---------
Operating income 13,099,994 1,670,855
---------- ---------
Other income (expense):
Interest and dividend income 3,861,119 1,981,183
Interest expense (4,957,154) (275,049)
Other -- (2,725)
----------- ---------
(1,096,035) 1,703,409
----------- ---------
Income before taxes 12,003,959 3,374,264
Income tax benefit (expense) 8,759,563 (65,956)
----------- ---------
Net income $20,763,522 $3,308,308
=========== =========
Basic earnings per common share $0.48 $0.08
===== =====
Diluted earnings per common share $0.47 $0.08
===== =====
Weighted average number of
common shares outstanding during
the period 42,982,052 41,935,820
========== ==========
Weighted average number of common
shares and dilutive potential
common shares outstanding during
the period 43,839,982 43,956,840
========== ==========
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Years ended June 30, 2002 and 2001
(unaudited)
June 30, 2002 June 30, 2001
------------- -------------
Revenues:
Net sales $22,182,704 $20,768,767
Royalties 53,329,494 8,251,234
Contract revenue 292,548 2,567,708
------- ---------
Total revenues 75,804,746 31,587,709
---------- ----------
Costs and expenses:
Cost of sales 6,077,454 3,864,284
Research and development expenses 18,426,860 13,051,714
Selling, general and
administrative expenses 16,687,365 11,795,398
---------- ----------
Total costs and expenses 41,191,679 28,711,396
---------- ----------
Operating income 34,613,067 2,876,313
---------- ----------
Other income (expense):
Interest and dividend income 18,680,908 8,401,526
Interest expense (19,828,918) (275,049)
Other 3,217,878 10,627
--------- ----------
2,069,868 8,137,104
--------- ----------
Income before taxes 36,682,935 11,013,417
Income tax benefit 9,123,408 511,647
--------- ----------
Net income $45,806,343 $11,525,064
=========== ===========
Basic earnings per common share $1.07 $0.28
===== =====
Diluted earnings per common share $1.04 $0.26
===== =====
Weighted average number of common
shares outstanding during the period 42,726,112 41,602,104
========== ==========
Weighted average number of common
shares and dilutive potential common
shares outstanding during the period 44,025,783 43,606,194
========== ==========
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