SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 8, 2001
ENZON, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12957 22-2372868
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification)
20 Kingsbridge Road, Piscataway, New Jersey 08854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 980-4500
NA
(Former name or former address, if changed since last report
Item 5. Other Events
ENZON REPORTS 135% INCREASE IN FIRST QUARTER REVENUES
Enzon, Inc. announced today its financial results for the quarter ended
September 30, 2001, the first quarter of Enzon's fiscal year (FY) 2002. For the
quarter, the Company reported net earnings of $4.2 million or $0.10 per diluted
share, as compared to $583,000 or $0.01 per diluted share, for the same period
in FY 2001.
The increase in quarterly earnings for the quarter was principally due to
increased royalties from marketed products utilizing Enzon's PEG technology. The
royalties earned on sales of these products grew to $7.0 million during the
first quarter of FY 2002, as compared to $332,000 for the same period in FY
2001. This increase in royalties was the result of increased sales of
PEG-INTRONTM by the Company's marketing partner, Schering-Plough Corporation.
Combined sales of the Company's other two FDA approved products, ONCASPAR(R) and
ADAGEN(R), increased by 11 percent to $5.1 million in the first quarter of FY
2002, as compared to $4.6 million for the same period in FY 2001 due to
increased sales of ONCASPAR.
Research and development expenses for the first quarter of FY 2002
increased by $861,000 or 33 percent to $3.5 million, as compared to $2.6 million
for the first quarter of FY 2001. The increase was due primarily to increased
research and development expenditures related to preclinical and clinical
activities for PROTHECAN(R) (PEG-camptothecin), PEG-paclitaxel, and other PEG
products in preclinical development. Recently, Enzon initiated patient dosing in
a Phase II clinical trial for PROTHECAN in patients with pancreatic cancer. In
May 2001, Enzon began Phase I clinical trials for PEG-paclitaxel and in July
2001, Enzon inititiated Phase II clinical trials for PROTHECAN in patients with
small-cell lung cancer. The Company expects to inititate additional Phase II
trials for PROTHECAN in other cancers, both as a single agent and in combination
with other oncolytics. 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 first quarter of FY
2002 increased by $1.0 million or 34 percent to $4.1 million as compared to $3.1
million for the first quarter of FY 2001. This increase was primarily due to
approximately $700,000 in costs related to the initiation of certain activities
focused on the identification and review of potential strategic acquisitions of
technologies, products, and companies.
Other income/expense decreased to $1.2 million for the first quarter of FY
2002, as compared to $2.1 million for the first quarter of FY 2001. The decrease
was attributable to an increase in interest expense due to the issuance of $400
million of 4.5% convertible subordinated notes during June 2001.
As of September 30, 2001, Enzon had total cash and interest-bearing
investments of $522 million as compared to $516 million as of June 30, 2001.
PEG-INTRON is a modified form of Schering-Plough's INTRON(R)A that was
developed using Enzon's PEG technology to have longer-acting properties. Enzon's
PEG technology involves chemically attaching PEG (polyethylene glycol) to
therapeutic proteins or small molecules for the purpose of enhancing therapeutic
value. Under its licensing agreement with Schering-Plough, Enzon is entitled to
royalties on worldwide sales of PEG-INTRON.
In February 2001 Schering-Plough launched PEG-INTRON in the United States
as a once-weekly monotherapy for the treatment of hepatitis C and in March 2001
the European Union granted PEG-INTRON marketing authorization as a combination
therapy with REBETOL(R) for the treatment of chronic hepatitis C. In August
2001, the U.S. Food and Drug Administration approved PEG-INTRON for use in
combination therapy with REBETOL(R) Capsules for the treatment of chronic
hepatitis C. The PEG-INTRON and REBETOL treatment regimen is the first and only
pegylated interferon-based combination therapy approved in the United States. In
October 2001, Schering-Plough announced the U.S. launch of PEG-INTRON and
REBETOL combination therapy for the treatment of chronic hepatitis C.
Except for the historical information herein, the matters discussed in this
Form 8-K 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's 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.
# # #
(Financial statements to follow)
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months ended September 30, 2001 and 2000
(Unaudited)
September 30, September 30,
2001 2000
------------------------- -------------------------
Revenues:
Net sales $ 5,106,490 $ 4,615,102
Royalties 6,987,313 332,166
Contract revenue 49,899 226,346
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Total revenues 12,143,702 5,173,614
------------ ------------
Costs and expenses:
Cost of sales 1,390,861 1,001,188
Research and development expenses 3,497,157 2,636,597
Selling, general and administrative expenses 4,122,111 3,074,227
------------ ------------
Total costs and expenses 9,010,129 6,712,012
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Operating income (loss) 3,133,573 (1,538,398)
------------ ------------
Other income (expense):
Interest and dividend income 6,178,299 2,109,213
Interest expense (4,994,129) --
Other (1,192) 11,891
------------ ------------
1,182,978 2,121,104
------------ ------------
Net earnings before taxes 4,316,551 582,706
Tax provision 86,331 --
------------ ------------
Net income $ 4,230,220 $ 582,706
============ ============
Basic earnings per common share $ 0.10 $ 0.01
============ ============
Diluted earnings per common share $ 0.10 $ 0.01
============ ============
Weighted average number of common shares
issued and outstanding 42,122,284 41,101,289
============ ============
Weighted average number of common shares
issued and outstanding and dilutive potential
common shares 43,922,829 43,658,659
============ ============
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 8, 2001
ENZON, INC
--------------------------
(Registrant)
By: /s/ KENNETH J. ZUERBLIS
--------------------------
Kenneth J. Zuerblis
Vice President, Finance and Chief Financial
Officer