Enzon Reports Third Quarter Fiscal Year 1999 Earnings.

PISCATAWAY, N.J.--(BUSINESS WIRE)--May 10, 1999--

Enzon, Inc. (Nasdaq:ENZN) announced today a net loss of $1,441,000, or $0.04 per share, for the three months ended March 31, 1999, compared to a net loss of $1,727,000, or $0.06 per share, for the same period in fiscal year (FY) 1998.

Sales of Enzon's FDA approved products ADAGEN(r) and ONCASPAR(r) increased by 21% to $3,136,000 for the three months ended March 31, 1999, as compared to $2,592,000 for the same period last year.

Costs of sales, as a percentage of sales, increased to 42% for the three months ended March 31, 1999 as compared to 25% for the same period in 1998. The increase was primarily due to an increase in ONCASPAR production costs related to a previously disclosed manufacturing problem. Enzon has instituted temporary labeling and distribution modifications for ONCASPAR while the problem is being resolved.

Research and development expenses for the quarter ended March 31, 1999 decreased by 29% to $1,683,000 as compared to $2,356,000 for the quarter ended March 31, 1998. The reduction was due to a decrease in facility costs as a result of the consolidation of research operations and the elimination of a leased facility, as well as the conclusion of Phase Ib clinical trials for Enzon's hemoglobin-based oxygen-carrier which is being studied as a radiosensitizer in cancer patients receiving radiation therapy. Research & development expenditures are expected to return to previous levels when PROTHECAN (PEG-camptothecin) moves into clinical studies for cancer. In March, 1999, Enzon filed an Investigational New Drug application for PROTHECAN, the first product to utilize Enzon's third generation Pro-Drug/Transport Technology.

Selling, general and administrative expenses for the quarter ended March 31, 1999 increased by $440,000 to $1,889,000, as compared to $1,449,000 for the prior year. The increase is attributed, in part, to ONCASPAR marketing and distribution costs associated with the previously disclosed distribution modifications. These costs were the responsibility of Enzon's marketing partner, Rhone-Poulenc Rorer, during the previous quarter.

For the nine months ended March 31, 1999, Enzon reported a net loss of $3,426,000 or $0.10 per share compared to a net loss of $1,256,000 or $0.05 per share for the same period last year. The increased net loss for the nine months ended March 31, 1999 was principally due to the timing of milestone payments received under Enzon's licensing agreement for PEG-Intron A with Schering- Plough Corporation ("Schering-Plough"). During the prior year, Enzon recognized $2,200,000 in milestone payments received as a result of Schering-Plough advancing PEG-Intron A into its first Phase III clinical trial.

Enzon is a biopharmaceutical company developing advanced therapeutics for life-threatening diseases through the application of its proprietary drug delivery and targeting technologies, PEG Modification, Pro Drug/Transport technology and Single-Chain Antigen-Binding (SCA(r)) protein technology. Enzon has two products on the market, ONCASPAR, which is used to treat Acute Lymphoblastic Leukemia (ALL) and ADAGEN a treatment for a form of Severe Combined Immunodeficiency Disease (SCID), commonly known as the "Bubble Boy Disease". Enzon's research activities are focused primarily in the area of oncology. In addition to two FDA approved products, Enzon has several products in various stages of clinical development by itself and with partners, including PEG-Intron A with Schering-Plough, which is in Phase III clinical trials for hepatitis C, malignant melanoma, chronic myelogenous leukemia and in combination treatment with Schering-Plough's product Rebetol(r) for the treatment of hepatitis C. Enzon develops and markets products on its own and through strategic alliances, which in addition to Schering-Plough Corporation, include Alexion Pharmaceuticals, Inc., Baxter Healthcare Corporation, Bristol-Myers Squibb Company, Eli Lilly & Company, and Rhone-Poulenc Rorer Pharmaceuticals, Inc.

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-Q's and Form 8-K on file with the SEC, including without limitation, risks in obtaining and maintaining regulatory approval for expanded indications, 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 -0-

                     ENZON, INC. AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
              Three Months ended March 31, 1999 and 1998
                             (Unaudited)

                                     March 31, 1999   March 31, 1998
Revenues:

Sales                                 $  3,136,325    $  2,591,785
Contract revenue                            11,871          18,039
Total revenues                           3,148,196       2,609,824
Costs and expenses:
 Cost of sales                           1,305,135         640,874
  Research and development expenses      1,683,070       2,356,143
  Selling, general and
   administrative expenses               1,889,054       1,449,117
     Total costs and expenses            4,877,259       4,446,134
       Operating loss                   (1,729,063)     (1,836,310)
Other income (expense):
  Interest and dividend income             270,265         111,351
  Interest expense                            (293)         (2,459)
  Other                                     18,237            --
                                           288,209         108,892
     Net loss                         ($ 1,440,854)   ($ 1,727,418)
Net loss per common share             ($      0.04)   ($      0.06)
Weighted average number of
 common shares outstanding
 during the period                      36,126,933      31,200,750


                     ENZON, INC. AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
              Nine Months ended March 31, 1999 and 1998
                             (Unaudited)

                                    March 31, 1999     March 31, 1998
Revenues:

  Sales                               $  9,854,438    $  9,196,260
  Contract revenue                          79,346       2,330,648
     Total revenues                      9,933,784      11,526,908
Costs and expenses:
  Cost of sales                          3,643,931       2,380,264
  Research and development expenses      5,105,981       6,488,850
  Selling, general and
   administrative expenses               5,532,709       4,275,801
     Total costs and expenses           14,282,621      13,144,915
       Operating loss                   (4,348,837)     (1,618,007)
Other income (expense):
  Interest and dividend income             873,146         376,914
  Interest expense                          (8,348)        (13,364)
  Other                                     58,071          (1,845)
                                           922,869         361,705
     Net loss                         ($ 3,425,968)   ($ 1,256,302)
Net loss per common share             ($      0.10)   ($      0.05)
Weighted average number of
 common shares outstanding
 during the period                      35,500,185      31,012,402