Enzon Reports Third Quarter Fiscal Year 2001 Earnings; Total Revenues Increase by 74% Over Prior Year.Business & Health Editors PISCATAWAY, N.J.--(BW HealthWire)--May 8, 2001 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) today reported net income of $5.5 million or $0.13 per diluted share, for the third quarter of fiscal year (FY) 2001 as compared to a net loss of $1.7 million or $0.04 per diluted share, for the same period in FY 2000. The increase in earnings for the quarter was principally due to increased revenues from marketed products, which utilize the Company's PEG technology. Sales and royalties earned on sales of products, which utilize the Company's PEG technology, increased by $3.2 million or 67 percent to $7.9 million during the quarter ended March 31, 2001, as compared to $4.7 million for the same period in the prior year. The increase was primarily due to royalties earned on sales of PEG-INTRON(TM) by Schering-Plough and increased sales of ONCASPAR(R) by Enzon. Schering-Plough launched PEG-INTRON 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. as once-weekly monotherapy monotherapy /mono·ther·a·py/ (-ther´ah-pe) treatment of a condition by means of a single drug. mon·o·ther·a·py n. Treatment of a disorder with a single drug. to treat 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 in February 2001. PEG-INTRON received approval as a monotherapy in the European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community (EU) in May 2000. Additionally, in March 2001 PEG-INTRON and REBETOL received marketing authorization in the EU as combination therapy 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. . PEG-INTRON is a modified form of Schering-Plough's INTRON Intron In split genes, a portion that is included in ribonucleic acid (RNA) transcripts but is removed from within a transcript during RNA processing and is rapidly degraded. (R)A (interferon alfa-2b interferon alfa-2b, recombinant Intron A, Viraferon (UK) Pharmacologic class: Biological response modifier Therapeutic class: Antineoplastic, antiviral Pregnancy risk category C , recombinant) that was developed using Enzon's PEG technology to have longer-acting properties. Under the Company's licensing agreement with Schering-Plough, Enzon is entitled en·ti·tletr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to royalties on worldwide sales of PEG-INTRON. The increase in ONCASPAR sales was due to the lifting of the 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. distribution and labeling restrictions that had been in place during the prior year. These restrictions were related to a previously disclosed manufacturing problem and resulted in the lower sales in the prior year. Contract revenues also increased by $1 million for the quarter ended March 31, 2001 as compared to the prior year's quarter due to the receipt of the final milestone payment due under the Company's license agreement with Schering-Plough. "The introduction of PEG-INTRON in the U.S. and Europe will improve the treatment and quality of life for hepatitis C patients," said Peter G. Tombros, Enzon's president and chief executive officer. "Revenues from the product will provide significant profit growth and enable proprietary pipeline expansion for Enzon." Cost of sales, as a percentage of sales and royalties, decreased to 13 percent, as compared to 22 percent for the comparable quarter of the previous year. The decrease was due to the royalty revenue related to PEG-INTRON, which does not have a corresponding cost of sales. Schering-Plough bears all manufacturing costs related to PEG-INTRON. Research and development expenses for the quarter ended March 31, 2001 increased by $1.8 million or 92 percent to $3.7 million as compared to $1.9 million for the quarter ended March 31, 2000. The increase was due primarily to increases in research personnel and increased expenses related to clinical and preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. activities for PROTHECAN(R) (PEG-camptothecin), PEG-paclitaxel, and other PEG products in preclinical development. Recently, the Company began 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 of PEG-paclitaxel, a PEG modified version of paclitaxel paclitaxel /pac·li·tax·el/ (pak?li-tak´sel) an antineoplastic that promotes and stabilizes polymerization of microtubules, isolated from the Pacific yew tree (Taxus brevifolia); with prodrug prodrug /pro·drug/ (-drug) a compound that, on administration, must undergo chemical conversion by metabolic processes before becoming an active pharmacological agent; a precursor of a drug. attributes. The Company's lead clinical candidate, PROTHECAN, is expected to commence 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 in the near future. Research and development expenses are expected to continue to increase significantly as PROTHECAN and PEG-paclitaxel continue to advance in clinical development and additional compounds enter clinical trials. Selling, general and administrative expenses for the quarter ended March 31, 2001 decreased by 46 percent or $2.3 million to $2.6 million as compared to $4.9 million for the same period in the prior year. This decrease was due primarily to a one-time special charge of $2.6 million included in the prior year, which was the result of a binding arbitration for a previously disclosed lawsuit brought by a former financial advisor of the Company. Interest and dividend income for the third quarter FY 2001 increased by $1.8 million to $2.3 million, as compared to $483,000 for the prior year. This increase was due to an increase in interest bearing investments. The Company had total cash and interest-bearing investments of approximately $128 million as of March 31, 2001. During the quarter ended March 31, 2001, the Company recognized a net tax benefit of $633,000. The tax benefit represents the sale of a portion of the Company's state of New Jersey net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carry-forwards partially offset by a tax provision recorded for the three months ended March 31, 2001. For the nine months ended March 31, 2001, the Company reported net income of $8.2 million or $0.19 per diluted share, as compared to a net loss of $5.1 million or $0.14 per diluted share for the nine months ended March 31, 2000. The earnings for the current year period were primarily due to increased revenues related to products, which utilize the Company's PEG technology and increased interest income as a result of increased interest-bearing investments. Enzon is a biopharmaceutical company developing advanced 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 drug delivery and targeting technologies, PEG Modification, Pro Drug/Transport technology and Single-Chain Antigen-Binding (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)) protein technology. Three products are currently marketed which utilize Enzon's technology: PEG-INTRON marketed by Schering-Plough for hepatitis C, 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. PEG-INTRON is in Phase III clinical trials 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 conducted by Schering-Plough 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. and chronic myelogenous leukemia Chronic myelogenous leukemia (CML) Also called chronic myelocytic leukemia, malignant disorder that involves abnormal accumulation of white cells in the marrow and bloodstream. Mentioned in: Bone Marrow Transplantation . 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 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/A, Form 10-Q's and Form 8-Ks Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. on file with the SEC, including without limitation, risks in obtaining and maintaining regulatory approval for indications and 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 www.enzon.com
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months ended March 31, 2001 and 2000
(Unaudited)
March 31, 2001 March 31, 2000
-------------- --------------
Revenues:
Net sales and royalties $7,867,260 $4,708,391
Contract revenue 2,064,494 1,014,726
---------- ----------
Total revenues 9,931,754 5,723,117
---------- ----------
Costs and expenses:
Cost of sales 988,380 1,041,749
Research and development expenses 3,684,268 1,921,442
Selling, general and
administrative expenses 2,640,889 4,928,038
---------- ----------
Total costs and expenses 7,313,537 7,891,229
---------- ----------
Operating income (loss) 2,618,217 (2,168,112)
---------- ----------
Other income (expense):
Interest and dividend income 2,255,642 483,335
Interest expense -- (167)
Other 1,483 --
---------- ----------
2,257,125 483,168
---------- ----------
Income (loss) before taxes 4,875,342 (1,684,944)
Tax benefit 632,879 --
---------- ----------
Net income (loss) $5,508,221 ($1,684,944)
========== ==========
Basic earnings (loss) per common share $0.13 ($0.04)
========== ==========
Diluted earnings (loss) per common share $0.13 ($0.04)
========== ==========
Weighted average number of common
shares outstanding during the period 41,802,586 38,303,494
========== ==========
Weighted average number of common
shares and dilutive potential
common shares outstanding
during the period 43,718,044 38,303,494
========== ==========
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Nine Months ended March 31, 2001 and 2000
(Unaudited)
March 31, 2001 March 31, 2000
-------------- --------------
Revenues:
Net sales and royalties $18,816,729 $11,325,294
Contract revenue 2,307,784 1,076,708
---------- ----------
Total revenues 21,124,513 12,402,002
---------- ----------
Costs and expenses:
Cost of sales 2,860,592 3,013,231
Research and development expenses 8,829,537 5,511,694
Selling, general and
administrative expenses 8,228,926 10,064,447
--------- ----------
Total costs and expenses 19,919,055 18,589,372
---------- ----------
Operating income (loss) 1,205,458 (6,187,370)
--------- ----------
Other income (expense):
Interest and dividend income 6,420,343 1,082,557
Interest expense -- (4,051)
Other 13,352 (36,274)
---------- ----------
6,433,695 1,042,232
---------- ----------
Income (loss) before taxes 7,639,153 (5,145,138)
Tax benefit 577,603 --
---------- ----------
Net income (loss) $8,216,756 ($5,145,138)
========== ===========
Basic earnings (loss) per common share $0.20 ($0.14)
===== ======
Diluted earnings (loss) per common share $0.19 ($0.14)
===== ======
Weighted average number of common
shares outstanding during the period 41,490,866 37,190,902
========== ==========
Weighted average number of common
shares and dilutive potential
common shares outstanding
during the period 43,509,342 37,190,902
========== ==========
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