Enzon Reports Second Quarter Results and Transitions to Calendar Year; Product Revenues Expected to Exceed $100 Million in 2006.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. -- Enzon Pharmaceuticals, Inc. (Nasdaq: ENZN) today announced its financial results for the quarter ended December December: see month. 31, 2005, the second quarter of Enzon's six-month transition period ended December 31, 2005. As previously reported, Enzon announced a change in its fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. from June June: see month. 30 to December 31. For the three months ended December 31, 2005, Enzon reported a net loss of $285.6 million or $(6.56) 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 break even on a diluted per-share basis for the three months ended December 31, 2004. The Company's financial results this quarter were significantly impacted by a $133.1 million non-cash write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of 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. associated with its intravenous intravenous /in·tra·ve·nous/ (-ve´nus) within a vein or veins.intrave´nously in·tra·ve·nous adj. Abbr. IV Within or administered into a vein. antifungal antifungal /an·ti·fun·gal/ (-fung´gal) 1. destructive to fungi, or suppressing their reproduction or growth; effective against fungal infections. 2. an agent that so acts. product, ABELCET, a write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of goodwill of $151.0 million ($138.9 million, net of tax) and a change in the Company's timing of royalty revenue recognition. "In 2005, we made great strides to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. the business to enhance our focus and decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from . The new Enzon is now better positioned to deliver 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. value," said Jeffrey H. Buchalter, Enzon's chairman and chief executive officer. "Our leadership team has been significantly strengthened with new talent. We are executing a comprehensive plan that is aligned with our goal of building a growth-oriented, fully-integrated biopharmaceutical company with a high-quality franchise in 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 cancer and adjacent diseases." "Moving forward, our primary focus will be placed on growing and capitalizing on our core strengths, namely our key assets that span research, development, manufacturing, and commercialization," he continued. "We will also be evaluating select licensing opportunities to help build a promising development pipeline." During the six months ended December 31, 2005, the Company changed a number of its internal operations, including its operating structure and performance measures, which resulted in a change in its reportable segments. The Company is now managing its business in three segments rather than one. These segments are Products, Royalties, and Contract Manufacturing. Commencing with the quarter ended December 31, 2005, and going forward, the Company will report revenues and certain expenses by segment. The Company provided guidance on sales for its Products segment for 2006. This segment is currently comprised of its four marketed products, ONCASPAR, DEPOCYT, ABELCET and ADAGEN. In 2006, combined revenues of these four products are estimated to exceed $100 million versus $94.1 million for the twelve months ended December 31, 2005. Financial Results For the three months ended December 31, 2005, Enzon reported a net loss of $285.6 million or $(6.56) per diluted share, as compared to break even on a diluted per-share basis for the three months ended December 31, 2004. Downward adjustments of the balance sheet to reflect the current fair value of certain intangible assets and goodwill accounted for $272.0 million or $(6.25) per diluted share, net of tax. These adjustments had no affect on the Company's cash flow. As previously reported, and as reflected in this quarter's year-over-year decline, ABELCET product revenues have not achieved initial projections. During the six-month period ended December 31, 2005, revised sales and revenue projections were developed for all products, including ABELCET. The reduced ABELCET sales levels constituted an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. indicator that necessitated performing fair value testing of the ABELCET-related intangibles. The Company concluded that these intangible assets were impaired and write-downs totaling $133.1 million were recorded in the Products segment. In connection with the changes in the Company's segments, and as part of its financial reporting process, goodwill was allocated to the Products and Contract Manufacturing segments and then tested for impairment. The result of this testing was that the goodwill was impaired and a write-off of approximately $138.9 million was recorded, net of related deferred tax adjustments. In addition to the impairments of intangibles and goodwill noted above, the Company's financial results for the three months ended December 31, 2005 reflect a reduction of Royalty segment revenues associated with the licensing of products that utilize its proprietary PEGylation History In 1970s, pioneering research by Davis, Abuchowski and colleagues foresaw the potential of the conjugation of Polyethylene glycol (PEG) to Proteins. This technique is now well established and is known as PEGylation. technology. Royalties are a material component of total revenues and as the timeline
Timeline may refer to:
LICENSEE. One to whom a license has been given. 1 M. Q. & S. 699 n. to the Company. Enzon recognizes royalty revenue when it can reasonably be estimated and collection is reasonably assured, which, beginning with the quarter ended December 31, 2005, is when the Company receives notification from its third-party licensee of the royalties earned under the license agreement. This information is generally received from the licensees in the quarter subsequent to the period in which the sales occur. This change resulted in a reduction in royalty revenue for the quarter ended December 31, 2005. Royalty revenue that previously would have been recognized in the quarter ended December 31, 2005 will now be recognized upon notification from the third party licensee, which will be in the quarter ending March 31, 2006. In the calendar year ended December 31, 2005, the Company effectively recognized only three quarters' royalty revenue, whereas in calendar year 2006, it will recognize four quarters' royalty revenue. The change has no effect on the Company's cash flow. Adjusted Financial Results On an adjusted basis, the Company reported a net loss of $13.5 million or $(0.31) per diluted share for the three months ended December 31, 2005, versus an adjusted net income of $1.7 million or $0.04 on a diluted per share basis for the three months ended December 31, 2004. Enzon's adjusted financial results for the three-month period ended December 31, 2005 exclude the impact of the intangibles and goodwill impairment charges. For the three month period ended December 31, 2004, adjusted financial results exclude a non-operating loss related to an equity investment in 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 ) common stock and a financial instrument that the Company entered into to reduce its investment risk associated with the NPS investment, as these losses were outside of the Company's normal course of business. In August 2005, this financial instrument expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. and the Company sold its remaining shares of NPS common stock. Not reflected in the adjustments of results for the three months ended December 31, 2005 is the effect of the change in timing of royalty revenue recognition discussed above. Enzon has reported adjusted financial results because the Company believes they are more representative of the underlying performance of its business and are relevant to gaining an understanding of the Company's trends and potential future performance. A table reconciling the Company's adjusted financial results to its financial results calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) for each of the three-month periods ended December 31, 2005 and 2004 is included later in this release. Revenues The following table reflects the revenues generated by product and segment for each of the three-month periods ended December 31, 2005 and 2004.
Three Months Ended
(in thousands)
---------------------------------
12/31/05 12/31/04 % Change
---------------------------------
Products
--------
ONCASPAR $7,216 $5,455 32
DEPOCYT 2,125 1,648 29
ABELCET 9,963 14,285 (30)
ADAGEN 4,956 5,574 (11)
---------------------------------
Total Products 24,260 26,962 (10)
Royalties 2,326 10,491 (78)
Contract Manufacturing 3,066 5,463 (44)
---------------------------------
Total Revenue $29,652 $42,916 (31)
=================================
Products Segment Products segment sales, comprised of sales of ONCASPAR, DEPOCYT, ABELCET, and ADAGEN, decreased to $24.3 million for the three months ended December 31, 2005, from $27.0 million for the three months ended December 31, 2004. The decrease in product sales was mainly attributable to the decline in ABELCET sales due to competitive market pressures. ONCASPAR sales grew to $7.2 million or 32 percent for the three months ended December 31, 2005, as compared to $5.5 million for the three months ended December 31, 2004, due, in part, to increased use in protocols by hospitals and cooperative groups. ONCASPAR is a PEG-enhanced version of the enzyme enzyme, biological catalyst. The term enzyme comes from zymosis, the Greek word for fermentation, a process accomplished by yeast cells and long known to the brewing industry, which occupied the attention of many 19th-century chemists. L-asparaginase l-asparaginase Oncology A chemotherapeutic used for lymphomas and lymphocytic leukemia Adverse effects Vomiting, hepatic dysfunction, allergic reaction, lethargy used in combination with other chemotherapeutics to treat 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. . The Company previously reported that the U.S. Food and Drug Administration approved a labeling change for ONCASPAR, which allows for administration via the intravenous (IV) route. IV administration provides clinicians with an important new option for pediatric pediatric /pe·di·at·ric/ (pe?de-at´rik) pertaining to the health of children. pe·di·at·ric adj. Of or relating to pediatrics. cancer patients who require ONCASPAR in their 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. . Sales of DEPOCYT, a sustained-release sustained-release Adjective (of a pill or tablet) coated with a chemical substance that controls the dosage released into a patient's system formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation of the chemotherapeutic agent chemotherapeutic agent An agent used to treat CA, administered in 'regimens'-one or more 'cycles' that combine 3 or more agents over wks; CAs are toxic to any cell with a high rate of proliferation–the CA itself, the GI tract–causing N&V, cytarabine cytarabine /cy·tar·a·bine/ (ara-C) (si-tar´ah-ben) an antimetabolite that inhibits DNA synthesis and hence has antineoplastic properties; used in the treatment of acute myelogenous and other types of leukemia and of meningitis associated arabinoside or ara-C used for the treatment of 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. , increased to $2.1 million or 29 percent for the three months ended December 31, 2005, as compared to $1.6 million for the three months ended December 31, 2004. The improvement is attributable to volume increases resulting from DEPOCYT's more convenient dosing schedule. Sales of ABELCET in the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of for the three months ended December 31, 2005 were $10.0 million, as compared to $14.3 million for the three months ended December 31, 2004. The decline from the prior year is due to competitive market conditions from other lipid lipid Any of a diverse class of organic compounds, found in all living things, that are greasy and insoluble in water. One of the three large classes of substances in foods and living cells, lipids contain more than twice as much energy (calories) per unit of weight as the amphotericin B amphotericin B (ăm'fətĕr`ĭsĭn), antibiotic that halts the growth of several disease-causing fungi. Discovered in 1956, it is produced by bacteria of the genus Streptomyces. products and other classes of antifungal products. Sales of ADAGEN, an enzyme replacement therapy Enzyme replacement therapy is a medical treatment replacing an enzyme in patients in whom that particular enzyme is deficient or absent. Usually this is done by giving the patient an intravenous (IV) infusion containing the enzyme. used to treat a type 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 , decreased to $5.0 million for the three months ended December 31, 2005, as compared to $5.6 million for the three months ended December 31, 2004. Royalties Segment The Company's Royalties segment primarily represents revenue received on a number of products that utilize its proprietary PEGylation technology, including Schering-Plough's PEG-INTRON. The significant decline in royalty revenues for the three months ended December 31, 2005, is the result of the Company's decision to recognize its royalties upon Enzon's receipt of notification from the licensees of amounts earned. The $2.3 million royalty revenue in the three months ended December 31, 2005 includes fees associated with the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of the research collaboration Working together on a project. See collaborative software. with Micromet AG. Royalty revenue for the three months ended December 31, 2004 was $10.5 million. Contract Manufacturing Segment The Company's revenues from Contract Manufacturing were $3.1 million for the three months ended December 31, 2005, as compared to $5.5 million in the corresponding prior year period. This includes contract manufacturing revenues related to services the Company provides for a number of customers who require injectable in·ject·a·ble adj. Capable of being injected. Used of a drug. n. A drug or medicine that can be injected. products, such as ABELCET for markets outside of Canada and the U.S. The decrease in revenue was due to European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. competitive market conditions for ABELCET and, to a lesser extent, the timing of sales of the injectable multivitamin mul·ti·vi·ta·min adj. Containing many vitamins. n. A preparation containing many vitamins. multivitamin , MVI MVI Multivitamin MVI Multi-Vendor Import MVI Melt-Volume Index MVI Motor Vehicle Incident MVI MODIS Vegetation Index MVI Multiple Variable Inversion MVI Microsoft Virus Initiative MVI Multi-Vitamin Injection MVI Motion Video Instructions . Research and Development The Company's research and development expenses remained relatively unchanged at $8.7 million for the three months ended December 31, 2005, as compared to $8.8 million for the three months ended December 31, 2004. The Company's research and development expenses for the three months ended December 31, 2005 include a charge of $2.5 million associated with the discontinuation of its research agreement with Micromet. Enzon is committed to investing in research and development as it advances its objective of delivering long-term value, including reinforcing its position as a scientific leader in next-generation PEGylation and rebuilding its development pipeline. As previously reported, the Company recently terminated two collaborations in order to redirect re·di·rect tr.v. re·di·rect·ed, re·di·rect·ing, re·di·rects To change the direction or course of. n. A redirect examination. re its investments to projects strategically aligned with its near and long-term business objectives, including its increased focus on 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. and therapeutic adjacencies. On November 28, 2005, the Company announced the termination of its agreement with Micromet AG to collaborate on identifying and developing antibody-based therapeutics for the treatment of inflammatory and autoimmune diseases Autoimmune diseases A group of diseases, like rheumatoid arthritis and systemic lupus erythematosus, in which immune cells turn on the body, attacking various tissues and organs. Mentioned in: Complement Deficiencies, Premature Menopause . In addition, on January 6, 2006, the Company announced it was returning its rights to ATG-Fresenius S, a polyclonal antibody Polyclonal antibodies are antibodies that are derived from different B-cell lines. They are a mixture of immunoglobulin molecules secreted against a specific antigen, each recognising a different epitope. for the prevention of graft rejection graft rejection Rejection Clinical immunology The constellation of defenses mounted by the immune system of the recipient of an allograft–eg kidney, liver, pancreas, etc, which compromise the continued viability of grafted tissue. Cf Graft. in organ transplant organ transplant: see transplantation, medical. patients, to Fresenius Biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. GmbH. Selling, General and Administrative Selling, general and administrative expenses increased to $16.9 million for the three months ended December 31, 2005, as compared to $13.7 million for the three months ended December 31, 2004. The increase is mainly due to increased general and administrative expenses associated with accounting and legal fees. These fees are attributable to the transition to a calendar year-end, Sarbanes-Oxley Act See SOX. compliance initiatives, and protection of the Company's intellectual property estate. The Company will invest in new selling, marketing, and other initiatives to further its objective of delivering long-term value, including improving its top line performance by investing in its commercial operations. Net Other Expense Net other expense is comprised of investment income, interest expense, and other non-operating expenses. The Company reported $3.0 million in net other expense for the three months ended December 31, 2005, down approximately $1.5 million from the year-earlier period. The improvement resulted primarily from increased investment income. Income Taxes For the three months ended December 31, 2005, a non-cash net tax benefit of approximately $12.1 million was recognized for federal and state purposes, as compared to a net tax provision of $0.1 million for the three months ended December 31, 2004. The income tax benefit for the three months ended December 31, 2005 resulted from the deferred tax implications of the Company's write-off of goodwill. Cash and Investments Total cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. increased to $226.6 million as of December 31, 2005, as compared to $225.1 million as of June 30, 2005. Cash reserves include cash, cash equivalents, short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has . Two items had a significant impact on cash in the six-month period ended December 31, 2005. The sale of the remaining 375,000 shares of NPS Pharmaceuticals, Inc. that Enzon received as part of the merger termination agreement resulted in cash proceeds of $7.5 million. Offsetting these proceeds was the $10.0 million up-front payment made in accordance with the license agreement announced in September 2005 with NatImmune A/S for the exclusive rights to rhMBL. Reconciliation of GAAP net (loss) to adjusted net (loss) earnings The following table reconciles the Company's net loss and net loss per diluted share as determined in accordance with U.S. generally accepted accounting principles (GAAP) to its adjusted net (loss) income and net (loss) income per share for the three months ended December 31, 2005 and 2004:
Three Months Ended
(in thousands, except per-share amounts)
-------------------------------------------
12/31/05 12/31/04
--------------------- ---------------------
Net
(loss)
Net loss income
per Net per
Net diluted (loss) diluted
loss share income share
--------------------- ---------------------
GAAP net loss $(285,571) $(6.56) $(10) $(0.00)
Adjustments to GAAP net
loss:
Write-down of goodwill
and intangibles, net of
tax 272,024 6.25 - -
Loss related to the sale
of NPS common stock, net
of tax - 1,718 $0.04
--------------------- ---------------------
Adjusted net (loss)
income (1) $(13,547) $(0.31) $1,708 $0.04
===================== =====================
(1) Adjusted net loss or income and adjusted net loss or income per
share, as Enzon defines them, may differ from similarly named
measures used by other entities, and consequently, could be
misleading unless all entities calculated and defined such items
in the same manner.
Conference Call and Webcast Enzon will be hosting a conference call today, February 28, 2006 at 10:00 a.m. E.S.T. All interested parties may access the call by using the following information:
Domestic Dial-In Number: (800) 230-1085
International Dial-In Number: (612) 332-0107
Access Code: 817725
Enzon's conference call will also be webcast in a "listen only" mode via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.vcall.com. Additionally, for those parties unable to listen at the time of Enzon's conference call, a telephone rebroadcast will be available following the call from February 28, 2006, at approximately 3:15 p.m. E.S.T. This rebroadcast will end on March 7, 2006, at approximately 11:59 p.m. E.S.T. 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 817725
About Enzon Enzon Pharmaceuticals, Inc. is a biopharmaceutical company dedicated to the development and commercialization of therapeutics to treat patients with cancer and adjacent diseases. Enzon's specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. sales force markets ABELCET(R), ONCASPAR(R), ADAGEN(R), and DEPOCYT(R) 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. . In addition, Enzon also receives royalties on sales of PEG-INTRON(R), marketed by Schering-Plough Corporation, and MACUGEN(R), marketed by OSI Pharmaceuticals OSI Pharmaceuticals, Inc. is an American pharmaceutical company based in Long Island, New York with facilities in Colorado, New Jersey and the United Kingdom. They specialize in the discovery and development of molecular targeted therapies, and are listed in the NASDAQ and Pfizer Inc. Enzon's product-driven strategy includes an extensive drug development program that leverages its proprietary technologies, including a next-generation PEGylation platform that utilizes customized linkers designed to release compounds at a controlled rate. Enzon complements its internal research and development efforts with strategic initiatives, such as partnerships designed to broaden its revenue base or provide access to promising new technologies or product development opportunities. Further information about Enzon and this press release can be found on the Company's web site at www.enzon.com. There are 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. contained herein that are not based on historical fact, including without limitation statements containing the words "believes," "may," "plans," "will," "estimate," "continue," "anticipates," "intends," "expects," and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from the future results, events or developments discussed above. Such factors include the risks described in Enzon'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. and Forms 10-Q on file with the SEC. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. All information in this press release is as of February 28, 2006 and the Company undertakes no duty to update this information.
Enzon Pharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months ended December 31, 2005 and 2004
(In thousands, except per share amounts)
(Unaudited)
December 31, December 31,
2005 2004
------------ ------------
Revenues:
Product sales, net $24,260 $26,962
Royalties 2,326 10,491
Contract manufacturing 3,066 5,463
------------ ------------
Total revenues 29,652 42,916
------------ ------------
Costs and expenses:
Cost of product sales and contract
manufacturing 11,252 12,381
Research and development 8,666 8,752
Selling, general and administrative 16,920 13,773
Amortization of acquired intangibles 3,347 3,394
Impairment of goodwill and intangibles 284,101 -
------------ ------------
Total costs and expenses 324,286 38,300
------------ ------------
Operating (loss) income (294,634) 4,616
------------ ------------
Other income (expense):
Investment income, net 1,616 973
Interest expense (4,895) (4,957)
Other, net 283 (540)
------------ ------------
(2,996) (4,524)
------------ ------------
(Loss) income before income tax (benefit)
provision (297,630) 92
Income tax (benefit) provision (12,059) 102
------------ ------------
Net loss $(285,571) $(10)
============ ============
Loss per common share - basic $(6.56) $(0.00)
============ ============
Loss per common share - diluted $(6.56) $(0.00)
============ ============
Weighted average shares - basic 43,523 43,483
============ ============
Weighted average shares - diluted 43,523 43,483
============ ============
Enzon Pharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations
Six Months ended December 31, 2005 and 2004
(In thousands, except per share amounts)
December 31,
December 31, 2004
2005 (Unaudited)
------------- ------------
Revenues:
Product sales, net $49,436 $54,489
Royalties 17,804 20,905
Contract manufacturing 6,459 7,976
------------ ------------
Total revenues 73,699 83,370
------------ ------------
Costs and expenses:
Cost of product sales and contract
manufacturing 23,216 23,282
Research and development 13,985 18,726
Selling, general and administrative 28,617 25,972
Amortization of acquired intangible assets 6,695 6,752
In-process research and development 10,000 -
Write down of goodwill and intangibles 284,101 -
------------ ------------
Total costs and expenses 366,614 74,732
------------ ------------
Operating income (292,915) 8,638
------------ ------------
Other income (expense):
Investment income, net 3,248 1,743
Interest expense (9,841) (9,914)
Other, net (2,776) (1,951)
------------ ------------
(9,369) (10,122)
------------ ------------
Loss before income tax benefit (302,284) (1,484)
Income tax benefit (10,947) (535)
------------ ------------
Net loss $(291,337) $(949)
============ ============
Loss per common share - basic $(6.69) $(0.02)
============ ============
Loss per common share - diluted $(6.69) $(0.02)
============ ============
Weighted average shares - basic 43,520 43,476
============ ============
Weighted average shares - diluted 43,520 43,476
============ ============
Enzon Pharmaceuticals, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, 2005 and June 30, 2005
(In thousands)
December 31, June 30,
2005 2005
------------ ------------
Assets
Current assets:
Cash and short-term investments $164,518 $158,747
Accounts receivable, net 14,087 25,638
Inventory 16,014 15,679
Other current assets 12,596 13,818
------------ ------------
Total current assets 207,215 213,882
------------ ------------
Property and equipment, net 34,978 33,214
------------ ------------
Other assets:
Marketable securities 62,059 66,384
Amortizable intangible assets, net 34,154 176,142
Goodwill - 150,985
Other long-term assets 2,939 10,254
------------ ------------
99,152 403,765
------------ ------------
Total assets $341,345 $650,861
============ ============
Liabilities and Stockholders' (Deficit)
Equity
Current and other liabilities $31,315 $48,359
Notes payable 394,000 399,000
Stockholders' (deficit) equity (83,970) 203,502
------------ ------------
Total liabilities and stockholders'
(deficit) equity $341,345 $650,861
============ ============
Common shares outstanding 43,787 43,781
============ ============
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