Enzon Reports First Quarter Fiscal Year 2001 Earnings
WEDNESDAY, NOVEMBER 08, 2000 8:06 AM
- BusinessWire
PISCATAWAY, N.J., Nov 8, 2000 (BUSINESS WIRE) --
Enzon, Inc.
(NASDAQ:ENZN) announced today its financial results for the first
quarter of fiscal year (FY) 2001. For the quarter, the Company
reported net earnings of $583,000 or $0.01 per share, as compared to a
net loss of $1,950,000 or $0.05 per share, for the same period in FY
2000. The earnings for the quarter were principally due to increased
sales and royalties earned on sales of the approved products, which
utilize the Company's PEG technology, and increased interest income
resulting from capital raised during the Company's public offering
completed in FY 2000. The Company had total cash and interest-bearing
investments of approximately $121.5 million as of September 30, 2000.
Sales and royalties earned on sales of the approved products,
which utilize the Company's PEG technology, for the quarter increased
by approximately $2,077,000 or 72%, primarily due to increased
ONCASPAR(R) sales. The increase in ONCASPAR sales was due to the
lifting of some of the FDA distribution restrictions in place during
the prior year's first quarter. These distribution restrictions were
related to a previously disclosed manufacturing problem and resulted
in prior year sales being significantly lower. During October 2000,
the FDA gave final approval to the Company's manufacturing changes to
correct these manufacturing problems and removed all previously
imposed distribution and labeling restrictions. This will allow for
the resumption of normal distribution and labeling of this product by
the Company's marketing partner, Aventis Pharmaceuticals (formerly
Rhone-Poulenc Rorer Pharmaceuticals, Inc.), which is expected to take
place in the first half of calendar 2001. Resumption of normal
distribution and labeling will result in lower revenues in future
quarters when Aventis resumes distribution of the product and the
Company's revenue stream reverts back to a 27.5% royalty rate on net
sales. Increased ADAGEN sales, as well as royalties earned on sales of
PEG-INTRON, also contributed to the increase in sales for the quarter.
PEG-INTRON was approved by the European Union in May 2000 and was
launched in several European countries throughout the quarter.
Additional launches of PEG-INTRON are ongoing and expected to occur
throughout the remaining EU-Member States in the upcoming months. To
date, PEG-INTRON has been launched in the following European
countries: Austria, Finland, France, Germany, Portugal, Sweden and the
United Kingdom. PEG-INTRON is a modified form of Schering-Plough's
INTRON(R)A (interferon alfa-2b, 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
to royalties on worldwide sales of PEG-INTRON and milestone payments.
Cost of sales, as a percentage of sales, decreased to 20%, as
compared to 41% for the comparable quarter of the previous year. The
decrease was due to increased cost of sales incurred during the prior
year's quarter related to the previously disclosed ONCASPAR
manufacturing problems and the related inventory reserves that
decreased the current year's cost of sales.
Research and development expenses for the quarter ended September
30, 2000 increased by 59% to $2,637,000, as compared to $1,657,000 for
the quarter ended September 30, 1999. The increase is primarily due to
increased expenses related to the ongoing Phase I clinical trials for
PROTHECAN(TM), as well as other PEG products in preclinical
development. The Company currently plans to file an IND on another PEG
anti-cancer compound before the end of calendar 2000. Research and
development expenses are expected to continue to increase
significantly as PROTHECAN moves into Phase II clinical trials in
early 2001 and additional compounds enter clinical trials.
Selling, general and administrative expenses for the quarter ended
September 30, 2000 increased by 32% to $3,074,000, as compared to
$2,326,000 for the prior year. This increase was primarily due to
increased legal fees associated with patent filing and defense costs.
During September 2000, Enzon filed a lawsuit in Federal District Court
in New Jersey against Hoffmann-LaRoche, Inc. and Roche Laboratories,
Inc. (Roche) for infringement of Enzon's U.S. Patent 6,113,906 (`906).
This patent, which has composition of matter claims directed to
"branched PEG," a unique form of Enzon's high-molecular-weight
pegylation technology, was issued to Enzon by the U.S. Patent and
Trademark Office on September 5, 2000. Enzon licenses a different
pegylation technology to Schering-Plough for use with PEG-INTRON(TM)
(peginterferon alfa-2b), which is approved in the European Union and
is currently undergoing FDA review for the treatment of hepatitis C.
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. Three products are
currently marketed which utilize Enzon's technology: PEG-INTRON
marketed by Schering-Plough in Europe for hepatitis C, ONCASPAR(R) for
Acute Lymphoblastic Leukemia (ALL), and ADAGEN(R) a treatment for a
form of Severe Combined Immunodeficiency Disease (SCID), commonly
known as the "Bubble Boy Disease." Schering-Plough submitted a
Biologics License Application (BLA) to the U.S. Food and Drug
Administration (FDA) seeking marketing approval for PEG-INTRON for the
treatment of chronic hepatitis C in December 1999. 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. Recently,
Schering-Plough completed Phase III clinical trials for PEG-INTRON in
combination with REBETOL for the treatment of hepatitis C. PEG-INTRON
is in Phase III clinical trials conducted by Schering-Plough for the
treatment of malignant melanoma and chronic myelogenous leukemia.
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 Aventis.
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 |
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