Enzon ends third quarter in the black, with $170 million of cash

By Angela McDaniels

Seattle, Nov. 2 - Enzon Pharmaceuticals, Inc. said it ended the third quarter with cash and short-term investments of $170.0 million, compared with $164.5 million at Dec. 31, 2005.

When cash equivalents and marketable securities are included, the figures are $240.2 million at Sept. 30 and $226.6 million at Dec. 31, 2005.

The company attributed the increase to positive operating cash flows for the nine-month period ended Sept. 30 and cash proceeds from the sale of Nektar Therapeutics Inc. common stock the company owned, offset by a $35 million payment in January to Sanofi-Aventis SA related to a reduction of the Oncaspar royalty rate.

For the three months ended Sept. 30, Enzon reported net income of $2.2 million, or $0.05 per diluted share, compared with a net loss of $5.8 million, or $0.13 per diluted share, for the same period of 2005.

Total revenues increased slightly to $45.9 million for the third quarter from $44.1 million for the third quarter of 2005, according to a company news release.

Revenue from Oncaspar and Adagen increased by 28% and 16%, respectively. The company attributed Oncaspar's increase to its adoption in certain protocols by hospitals and cooperative groups. For Adagen, Enzon said the product's market - adenosine deaminase deficiency in patients with severe combined immuno-deficiency disease - is very small, making quarter-to-quarter variability common.

Revenue from Depocyt and Abelcet decreased by 14% and 19%, respectively. Enzon attributed the decrease of Abelcet revenue to competition from current and newly launched antifungal therapeutics.

Revenue from royalties reached $18.7 million for the quarter, compared with $15.5 million for the same period of 2005. Contract manufacturing, however, fell by nearly half to $1.9 million from $3.4 million.

"Over the past year, we have been able to leverage and modernize the company's core asset, PEGylation technology, by integrating it with novel oncology candidates, setting the stage for a new, innovative pipeline from the company," chairman and chief executive officer Jeffrey H. Buchalter said in the news release.

Enzon is a Bridgewater, N.J., biopharmaceutical company.

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