SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
---------------------------
For the Quarter Ended September 30, 1999 Commission File No. 0-12957
[LOGO] ENZON, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-2372868
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
20 Kingsbridge Road, Piscataway, New Jersey 08854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 980-4500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of November 5, 1999, there were 36,813,597 shares of Common Stock, par
value $.01 per share, outstanding.
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
September 30, 1999 and June 30, 1999
<TABLE>
<CAPTION>
September 30, June 30,
1999 1999
(unaudited) *
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 24,635,324 $ 24,673,636
Accounts receivable 4,039,919 4,604,847
Inventories 1,469,355 1,326,601
Other current assets 1,189,517 1,034,327
------------- -------------
Total current assets 31,334,115 31,639,411
------------- -------------
Property and equipment 11,911,932 12,054,505
Less accumulated depreciation and amortization 10,526,747 10,649,661
------------- -------------
1,385,185 1,404,844
------------- -------------
Other assets:
Investments 68,823 68,823
Other assets, net 754,186 753,683
Patents, net 1,013,719 1,049,554
------------- -------------
1,836,728 1,872,060
------------- -------------
Total assets $ 34,556,028 $ 34,916,315
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,661,334 $ 1,716,089
Accrued expenses 6,604,559 6,261,640
------------- -------------
Total current liabilities 8,265,893 7,977,729
------------- -------------
Accrued rent 627,771 634,390
Royalty advance - RPR 734,196 728,977
------------- -------------
1,361,967 1,363,367
------------- -------------
Commitments and contingencies
Stockholders' equity:
Preferred stock-$.01 par value, authorized
3,000,000 shares: issued and outstanding
107,000 shares at September 30, 1999 and
June 30, 1999 (liquidation preference
aggregating $4,713,000 at September 30, 1999 1,070 1,070
and $4,659,000 at June 30, 1999)
Common stock-$.01 par value, authorized 60,000,000 shares;
issued and outstanding 36,814,085 shares at September 30, 1999
and 36,488,684 shares at June 30, 1999 368,140 364,886
Additional paid-in capital 148,270,447 146,970,289
Accumulated deficit (123,711,489) (121,761,026)
------------- -------------
Total stockholders' equity 24,928,168 25,575,219
------------- -------------
Total liabilities and stockholders' equity $ 34,556,028 $ 34,916,315
============= =============
</TABLE>
*Condensed from audited financial statements.
The accompanying notes are an integral part of these unaudited consolidated
condensed financial statements.
2
<PAGE>
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Ended September 30, 1999 and 1998
(Unaudited)
Three months ended
September 30, September 30,
1999 1998
------------ ------------
Revenues:
Sales $2,870,135 $2,935,702
Contract revenue 43,678 51,965
------------ ------------
Total revenues 2,913,813 2,987,667
------------ ------------
Costs and expenses:
Cost of sales 1,178,561 1,309,851
Research and development expenses 1,657,283 1,575,346
Selling, general and administrative expenses 2,325,971 1,535,279
------------ ------------
Total costs and expenses: 5,161,815 4,420,476
------------ ------------
Operating loss (2,248,002) (1,432,809)
------------ ------------
Other income (expense):
Interest and dividend income 300,497 302,566
Interest expense (2,958) (5,436)
Other
-- 730
------------ ------------
297,539 297,860
------------ ------------
Net loss ($1,950,463) ($1,134,949)
============ ============
Basic and diluted loss per common share
($0.05) ($0.03)
============ ============
Weighed average number of common
shares issued and outstanding 36,650,335 34,708,853
============ ============
The accompanying notes are an integral part of these unaudited consolidated
condensed financial statements.
3
<PAGE>
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Three Months Ended September 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30, September 30,
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ($1,950,463) ($1,134,949)
Adjustment for depreciation and amortization 124,512 288,768
Gain on retirement of equipment -- (730)
Non-cash expense for issuance of common stock,
stock options, and warrants 70,022 171,340
Decrease in accrued rent (6,619) (39,766)
Increase (decrease) in royalty advance - RPR 5,219 (254,350)
Changes in assets and liabilities 554,645 (347,252)
------------ ------------
Net cash used in operating activities (1,202,684) (1,316,939)
------------ ------------
Cash flows from investing activities:
Capital expenditures (69,018) (17,893)
Proceeds from sale of equipment -- 88,372
Net cash (used in) provided by investing activities (69,018) 70,479
------------ ------------
Cash flows from financing activities - proceeds from
issuance of common stock, net 1,233,390 17,800,549
Net (decrease) increase in cash and cash equivalents (38,312) 16,554,089
------------ ------------
Cash and cash equivalents at beginning of period 24,673,636 6,478,459
------------ ------------
Cash and cash equivalents at end of period $24,635,324 $23,032,548
============ ============
</TABLE>
The accompanying notes are an integral part of these unaudited consolidated
condensed financial statements.
4
<PAGE>
ENZON, INC. AND SUBSIDIARIES
Notes To Consolidated Condensed Financial Statements
(Unaudited)
(1) Organization and Basis of Presentation
The unaudited consolidated condensed financial statements have been
prepared from the books and records of Enzon, Inc. and subsidiaries in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal and recurring adjustments) considered necessary for a fair
presentation have been included. Interim results are not necessarily indicative
of the results that may be expected for the year.
(2) Loss Per Common Share
Basic and diluted loss per common share is based on the net loss for the
relevant period, adjusted for cumulative undeclared preferred stock dividends of
$54,000 for the three months ended September 30, 1999 and 1998, divided by the
weighted average number of shares issued and outstanding during the periods. Due
to the net loss recorded for the three months ended September 30, 1999 and 1998,
the exercise or conversion of all dilutive potential common shares is not
included for purposes of the diluted loss per share calculation. As of September
30, 1999, the Company had 5,537,000 dilutive potential common shares outstanding
that could potentially dilute future diluted earnings per share calculations.
(3) Inventories
The composition of inventories at September 30, 1999 and June 30, 1999 is
as follows:
September 30, June 30,
1999 1999
---------- ----------
Raw materials $566,000 $503,000
Work in process 764,000 548,000
Finished goods 139,000 276,000
---------- ----------
$1,469,000 $1,327,000
========== ==========
(4) Cash Flow Information
The Company considers all highly liquid securities with original maturities
of three months or less to be cash equivalents. Cash payments for interest were
approximately $3,000 and $5,000 for the three months ended September 30, 1999
and 1998, respectively. There were no income tax payments made for the three
months ended September 30, 1999 and 1998. There were no conversions of Series A
Preferred Stock during the three months ended September 30, 1999 and 1998.
(5) Non-Qualified Stock Option Plan
During the three months ended September 30, 1999, the Company issued
112,000 stock options at an average exercise price of $22.57 per share under the
Company's Non-Qualified Stock Option Plan, as amended, of which 77,000 were
granted to executive officers of the Company as part of a bonus plan for the
year ended June 30, 1999. None of the options granted during the period are
exercisable as of September 30, 1999. All options were granted with exercise
prices that equaled or exceeded the fair market value of the underlying stock on
the date of grant.
5
<PAGE>
ENZON, INC. AND SUBSIDIARIES
Notes To Consolidated Condensed
Financial Statements (Unaudited)
(6) Business Segments
A single management team that reports to the Chief Executive Officer
comprehensively manages the Company's business operations. The Company does not
operate separate lines of business or separate business entities with respect to
any of its approved products or product candidates. In addition, the Company
does not conduct any operations outside of the United States. The Company does
not prepare discrete financial statements with respect to separate product
areas. Accordingly, the Company does not have separately reportable segments as
defined by Statement of Financial Accounting Standards No. 131, "Disclosures
about Segments of an Enterprise and Related Information".
(7) Comprehensive Income (Loss)
The net loss of $1,950,000 and $1,135,000, recorded for the three months
ended September 30, 1999 and 1998, respectively, is equal to the comprehensive
loss for those periods.
(8) Commitments and Contingencies
The Company is being sued by a former financial advisor, LBC Capital
Resources, Inc. ("LBC"), which is asserting that under a May 2, 1995, letter
agreement ("Letter Agreement") between Enzon and LBC, LBC was entitled to a
commission in connection with the Company's January and March 1996 private
placement, comprised of $500,000 and warrants to purchase 1,000,000 shares of
Enzon common stock at an exercise price of $2.50 per share. LBC has also
asserted that it is entitled to an additional fee of $175,000 and warrants to
purchase 250,000 shares of Enzon common stock when and if any of the warrants
obtained pursuant to the private placements are exercised. LBC has claimed
$3,000,000 in compensatory damages, plus punitive damages, counsel fees and
costs for the alleged breach of the Letter Agreement. The Company believes that
no such commission was due under the Letter Agreement and denies any liability
under the Letter Agreement. The Company intends to defend this lawsuit
vigorously and believes the ultimate resolution of this matter will not have a
material adverse effect on the financial position of the Company.
In the course of normal operations, the Company is subject to the marketing
and manufacturing regulations as established by the Food and Drug Administration
("FDA"). The Company and the FDA agreed to temporary labeling and distribution
modifications for ONCASPAR due to increased levels of particulates in certain
batches of ONCASPAR, which were manufactured by the Company. The Company, rather
than its marketing partner, Rhone-Poulenc Rorer ("RPR"), will temporarily
distribute ONCASPAR directly to patients, on an as needed basis, and will
conduct the additional inspection and labeling procedures prior to distribution.
During May 1999, the FDA placed additional restrictions on ONCASPAR, which
specified ONCASPAR was to be distributed only to those patients who are
hypersensitive to native L-asparaginase.
The Company has been able to manufacture several batches of ONCASPAR which
contain acceptable levels of particulates and anticipates a final resolution of
the problem during fiscal 2000. It is expected that RPR will resume distribution
of ONCASPAR at that time. There can be no assurance that this solution will be
acceptable to the FDA. If the Company is unable to resolve this problem it is
possible that the FDA may not permit the Company to continue to distribute this
product. An extended disruption in the marketing and distribution of ONCASPAR
could have a material adverse impact on future ONCASPAR sales.
6
<PAGE>
ENZON, INC. AND SUBSIDIARIES
Notes To Consolidated Condensed Financial Statements
(Unaudited)
The Company maintains a separate supply agreement with RPR, under which RPR
purchases from ENZON all of RPR's requirements for ONCASPAR at a price defined
in the supply agreement. The Company and RPR are currently in discussions
related to a disagreement over the purchase price of ONCASPAR under the supply
agreement between the two companies. RPR has asserted that the Company has
overcharged RPR under the supply agreement in the amount of $2,329,000. The
Company believes its costing and pricing of ONCASPAR to RPR complies with the
supply agreement.
RPR has also asserted that the Company should be responsible for its lost
profits while ONCASPAR is under the temporary labeling and distribution
modifications. RPR contends that its lost profits through September 30, 1999
were $4,081,000. The Company does not agree with RPR's claim for these two
issues. The Company does not believe the ultimate resolution of these matters
will have a material adverse effect on the financial results or operations of
the Company.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Information contained herein contains "forward-looking statements" which can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should," or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy. No assurance can be given that the future results covered by the
forward-looking statements will be achieved. The matters set forth in the "Risk
Factors" section and elsewhere in the Company's Annual Report on Form 10-K/A for
the fiscal year ended June 30, 1999, which is incorporated herein by reference,
constitute cautionary statements identifying important factors with respect to
such forward-looking statements, including certain risks and uncertainties, that
could cause actual results to vary materially from the future results indicated
in such forward-looking statements. Other factors could also cause actual
results to vary materially from the future results indicated in such
forward-looking statements.
Results of Operations
Three months ended September 30, 1999 vs. Three months ended September 30, 1998
Revenues. Revenues for the three months ended September 30, 1999 remained
relatively unchanged at $2,914,000 as compared to $2,988,000 for the same period
in 1998. The components of revenues are sales, which consist of sales of the
Company's two Food and Drug Administration ("FDA") approved products and
royalties on the sales of the Company's products by others, and contract
revenues. Sales were $2,870,000 for the three months ended September 30, 1999,
as compared to $2,936,000 for the same period in the prior year. The decrease
was primarily due to a decrease in ONCASPAR revenues, which was partially offset
by an increase in ADAGEN(R) sales. ADAGEN sales increased by 10% over the prior
year as a result of an increase in patients receiving ADAGEN treatment. Sales of
ADAGEN for the three months ended September 30, 1999 and 1998 were $2,746,000
and $2,493,000 respectively. ONCASPAR revenues are comprised of manufacturing
revenues, as well as royalties on sales of ONCASPAR by the Company's marketing
partner, Rhone-Poulenc Rorer Pharmaceuticals, Inc. ("RPR"). ONCASPAR revenues
decreased due to difficulties encountered in the Company's manufacturing process
and the resulting modifications made to the labeling and distribution of
ONCASPAR.
During 1998 the Company began to experience manufacturing problems with
ONCASPAR. The problems were due to an increase in the levels of particulates in
batches of ONCASPAR which resulted in an increased rejection rate for this
product. During fiscal 1999, as a result of these manufacturing problems the
Company and the FDA agreed to temporary labeling and distribution modifications
for ONCASPAR. The Company, rather then RPR, took over distribution of ONCASPAR
directly to patients on an as-needed basis and instituted additional inspection
and labeling procedures prior to distribution. In addition during May 1999, the
FDA required the Company to limit distribution of the product to only those
patients who are hypersensitive to native L-asparaginase.
The Company has been able to manufacture several batches of ONCASPAR which
contain acceptable levels of particulates and anticipates a final resolution of
the problem during fiscal 2000. It is expected that RPR will resume distribution
of ONCASPAR at that time. There can be no assurance that this solution will be
acceptable to the FDA. If the Company is unable to resolve this problem it is
possible that the FDA may not permit the Company to continue to distribute this
product. An extended disruption in the marketing and distribution of ONCASPAR
could have a material adverse impact on future ONCASPAR sales.
During the three months ended September 30, 1999 and 1998, the Company had
export sales of $1,010,000 and $778,000, respectively. Of these amounts, sales
in Europe were $865,000 and $624,000 for the quarters ended September 30, 1999
and 1998, respectively.
The Company expects sales of ADAGEN to increase at rates comparable to
those achieved during the last two years as additional patients are treated. The
Company also anticipates ONCASPAR sales will remain at reduced levels until the
manufacturing problem is resolved and RPR resumes normal distribution of the
product. There can be no assurance that any particular sales levels of ADAGEN or
ONCASPAR will be achieved or maintained.
8
<PAGE>
Cost of Sales. Cost of sales, as a percentage of sales, decreased to 41% for the
three months ended September 30, 1999 as compared to 45% for the same period in
1998. The decrease was primarily due to a charge in the prior year for ONCASPAR
finished goods on hand and in the distribution pipeline, as well as increased
ONCASPAR production costs. The write-off of ONCASPAR finished goods was
attributable to the previously discussed manufacturing problem.
Research and Development. Research and development expenses for the three months
ended September 30, 1999 increased by 5% to $1,657,000 as compared to $1,575,000
for the same period in 1998. The increase in research and development expenses
resulted from the commencement of PEG-camptothecin Phase I safety trials.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses for the three months ended September 30, 1999, increased
by 52% to $2,326,000, as compared to $1,535,000 for the same period in 1998. The
increase was primarily due to an increase in legal fees related to litigation
and ongoing arbitration proceedings, as well as increased patent filing and
defense costs.
Other Income/Expense. Other income/expense remained constant at $298,000 for the
three months ended September 30, 1999 and 1998.
Liquidity and Capital Resources
Total cash reserves, including cash and cash equivalents as of September
30, 1999 were $24,635,000, as compared to $24,674,000 at June 30, 1999. The
Company invests its excess cash in a portfolio of high-grade marketable
securities and United States government-backed securities.
The Company's Amended RPR License Agreement for ONCASPAR provided for a
payment of $3,500,000 in advance royalties which was received from RPR in
January 1995. Royalties due under the Amended RPR License Agreement will be
offset against an original credit of $5,970,000, which represents the royalty
advance plus reimbursement of certain amounts due RPR under the previous
agreement and interest expense, before cash payments will be made under the
agreement. The royalty advance is shown as a long-term liability, with the
corresponding current portion included in accrued expenses on the consolidated
balance sheets and to be reduced as royalties are recognized under the
agreement. Through September 30, 1999, an aggregate of $4,378,000 in royalties
payable by RPR has been offset against the original credit.
As of September 30, 1999, 942,808 shares of Series A Preferred Shares had
been converted into 3,097,955 shares of Common Stock. Accrued dividends on the
converted Series A Preferred Shares in the aggregate of $1,824,000 were settled
by the issuance of 235,231 shares of Common Stock. The Company does not
presently intend to pay cash dividends on the Series A Preferred Shares. As of
September 30, 1999, there were accrued and unpaid dividends totaling $2,038,000
on the Series A Preferred Shares. These dividends are payable in cash or Common
Stock at the Company's option and accrue on the outstanding Series A Preferred
Shares at the rate of $214,000 per year.
The Company and RPR are currently in discussions related to a disagreement
over the purchase price of ONCASPAR under the supply agreement between the two
companies. RPR has asserted that the Company has overcharged RPR under the
supply agreement in the amount of $2,329,000. The Company believes its costing
and pricing of ONCASPAR to RPR complies with the supply agreement. RPR has also
asserted that the Company should be responsible for its lost profits while
ONCASPAR is under the temporary labeling and distribution modifications. RPR
contends that its lost profits through September 30, 1999 were $4,081,000. The
Company does not agree with RPR's claims. The Company does not believe the
ultimate resolution of either matter will have a materially adverse effect on
the Company's financial position.
The Company is being sued, in the United States District Court for the
District of New Jersey, by a former financial advisor asserting that under the
May 2, 1995 letter agreement ("Letter Agreement") between Enzon and
9
<PAGE>
LBC Capital Resources Inc. ("LBC"), LBC was entitled to a commission in
connection with the Company's January and March 1996 private placements,
comprised of $500,000 and warrants to purchase 1,000,000 shares of Enzon common
stock at an exercise price of $2.50 per share. LBC has also asserted that it is
entitled to an additional fee of $175,000 and warrants to purchase 250,000
shares of Enzon common stock when and if any of the warrants obtained pursuant
to the private placements are exercised. LBC has claimed $3,000,000 in
compensatory damages, plus punitive damages, counsel fees and costs for the
alleged breach of the Letter Agreement. The Company believes that no such
commission was due under the Letter Agreement and denies any liability under the
Letter Agreement. The Company intends to defend this lawsuit vigorously and
believes the ultimate resolution of this matter will not have a material adverse
effect on the financial position of the Company.
To date, the Company's sources of cash have been the proceeds from the sale
of its stock through public and private placements, sales of ADAGEN, sales of
ONCASPAR, contract research and development fees, technology transfer and
license fees and royalty advances. The Company's current sources of liquidity
are its cash, cash equivalents and interest earned on such cash reserves, sales
of ADAGEN, sales of ONCASPAR, sales of its products for research purposes and
license fees. Based upon its currently planned research and development
activities and related costs and its current sources of liquidity, the Company
anticipates its current cash reserves will be sufficient to meet its capital and
operational requirements for the foreseeable future.
Upon exhaustion of the Company's current cash reserves, the Company's
continued operations will depend on its ability to realize significant revenues
from the commercial sale of its products, raise additional funds through equity
or debt financing, or obtain significant licensing, technology transfer or
contract research and development fees. There can be no assurance that these
sales, financings or revenue generating activities will be successful.
Year 2000
The Company has completed a review of its business systems, including its
computer systems and manufacturing equipment, and has queried its customers and
vendors as to their progress in identifying and addressing problems that their
systems may face in correctly interpreting and processing date information as
the year 2000 approaches and is reached. Based on this review, the Company
implemented a plan to achieve year 2000 compliance. The Company believes that it
has achieved year 2000 compliance in a manner which should be non-disruptive to
its operations. In addition, the Company has prepared various types of
contingency planning to address potential problem areas with internal systems
and with suppliers and other third parties. Year 2000 compliance should not have
a material adverse effect on the Company, including the Company's financial
condition, results of operations or cash flow.
However, the Company may encounter problems with suppliers and or revenue
sources which could adversely affect the Company's financial condition, results
of operations or cash flow. The Company cannot accurately predict the occurrence
and or outcome of any such problems, nor can the dollar amount of any such
problem be estimated.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
10
<PAGE>
13
PART II OTHER INFORMATION
Item 5. Other Information
Schering-Plough Corporation has submitted a centralized Marketing
Authorization Application to the European Union's European Agency for the
Evaluation of Medicinal Products seeking clearance to market PEG-INTRON
(PEG-interferon alfa-2b) powder for solution for injection for the treatment of
chronic hepatitis C in patients 18 years of age or older with compensated liver
disease. The application, which proposes administration of PEG-INTRON
subcutaneously once weekly for one year, is currently under CPMP review.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K).
<TABLE>
<CAPTION>
Page Number
or
Exhibit Incorporation
Number Description By Reference
------ ----------- ------------
<S> <C>
3(i) Certificate of Incorporation, as amended ~~
3(ii) By-laws, as amended *(4.2)
3(iv) Amendment to Certificate of Incorporation dated January 5, 1998 ##3(iv)
10.1 Form of Change of Control Agreements dated as of January 20, 1995 entered
into with the Company's Executive Officers ###(10.2)
10.2 Lease - 300-C Corporate Court, South Plainfield, New Jersey ***(10.3)
10.4 Lease Termination Agreement dated March 31, 1995 for
20 Kingsbridge Road and 40 Kingsbridge Road, Piscataway, New Jersey ###(10.6)
10.5 Option Agreement dated April 1, 1995 regarding 20 Kingsbridge Road,
Piscataway, New Jersey ###(10.7)
10.6 Form of Lease - 40 Cragwood Road, South Plainfield, New Jersey ****(10.9)
10.7 Lease 300A-B Corporate Court, South Plainfield, New Jersey ++(10.10)
10.8 Stock Purchase Agreement dated March 5, 1987 between the Company and
Eastman Kodak Company ****(10.7)
10.9 Amendment dated June 19, 1989 to Stock Purchase Agreement between the
Company and Eastman Kodak Company **(10.10)
10.10 Form of Stock Purchase Agreement between the Company
and the purchasers of the Series A Cumulative
Convertible Preferred Stock +(10.11)
10.11 Amendment to License Agreement and Revised License Agreement
between the Company and RCT dated April 25, 1985 +++(10.5)
10.12 Amendment dated as of May 3, 1989 to Revised License Agreement
dated April 25, 1985 between the Company and Research Corporation **(10.14)
10.13 License Agreement dated September 7, 1989 between the Company and
Research Corporation Technologies, Inc. **(10.15)
10.14 Master Lease Agreement and Purchase Leaseback Agreement dated
October 28, 1994 between the Company and Comdisco, Inc. #(10.16)
10.15 Employment Agreement with Peter G. Tombros dated as of
April 5, 1997 ^^(10.15)
10.16 Stock Purchase Agreement dated as of June 30, 1995 ~(10.16)
10.17 Securities Purchase Agreement dated as of January 31, 1996 ~(10.17)
10.18 Registration Rights Agreements dated as of January 31, 1996 ~(10.18)
10.19 Warrants dated as of February 7, 1996 and issued pursuant to the Securities
Purchase Agreement dated as of January 31, 1996 ~(10.19)
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
10.20 Securities Purchase Agreement dated as of March 15, 1996 ~~(10.20)
10.21 Registration Rights Agreement dated as of March 15, 1996 ~~(10.21)
10.22 Warrant dated as of March 15, 1996 and issued pursuant to the
Securities PurchaseAgreement dated as of March 15, 1996 ~~(10.22)
10.23 Amendment dated March 25, 1994 to License Agreement dated
September 7, 1989 between the Company and Research Corporation
Technologies, Inc. ~~~(10.23)
10.24 Independent Directors' Stock Plan ~~~(10.24)
10.25 Stock Exchange Agreement dated February 28, 1997, by and between the
Company and GFL Performance Fund Ltd. ^(10.25)
10.26 Agreement Regarding Registration Rights Under Registration Rights Agreement
dated March 10, 1997, by and between the Company and Clearwater Fund IV
LLC ^(10.26)
10.27 Common Stock Purchase Agreement dated June 25, 1998 ^^^(10.27)
10.28 Placement Agent Agreement dated June 25, 1998 with SBC Warburg
Dillon Read, Inc. ^^^^(10.28)
27.0 Financial Data Schedule o
</TABLE>
o Filed herewith.
* Previously filed as an exhibit to the Company's Registration Statement
on Form S-2 (File No. 33-34874) and incorporated herein by reference
thereto.
** Previously filed as exhibits to the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1989 and incorporated herein
by reference thereto.
*** Previously filed as an exhibit to the Company's Registration Statement
on Form S-18 (File No. 2-88240-NY) and incorporated herein by
reference thereto.
**** Previously filed as exhibits to the Company's Registration Statement
on Form S-1 (File No. 2-96279) filed with the Commission and
incorporated herein by reference thereto.
+ Previously filed as an exhibit to the Company's Registration Statement
on Form S-1 (File No. 33-39391) filed with the Commission and
incorporated herein by reference thereto.
++ Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1993 and incorporated herein
by reference thereto.
+++ Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1985 and incorporated herein
by reference thereto.
# Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1994 and incorporated
herein by reference thereto.
## Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1997 and incorporated
herein by reference thereto.
### Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995 and incorporated herein
by reference thereto.
12
<PAGE>
~ Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1995 and incorporated
herein by reference thereto.
~ ~ Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1996 and incorporated herein
by reference thereto.
~~~ Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1996 and incorporated
herein by reference thereto.
^ Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1997 and incorporated herein
by reference thereto.
^^ Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended June 30, 1997 and incorporated herein by
reference thereto.
^^^ Previously filed as an exhibit to the Company's Registration Statement
on Form S-3 (File No. 333-58269) filed with the Commission and
incorporated herein by reference thereto.
^^^^ Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the year ended June 30, 1998 and incorporated herein by
reference thereto.
(b) Reports on Form 8-K.
On July 14, 1999, the Company filed with the Commission a Current Report on Form
8-K dated July 13, 1999, related to the revision of the 1990 PEG-Intron(TM)
licensing agreement between Enzon and Schering-Plough Corporation
("Schering-Plough"). The revised agreement calls for Schering-Plough to pay
Enzon royalties on sales at a higher effective rate than provided for in the
original agreement in exchange for the return to Schering-Plough of Enzon's
exclusive U.S. manufacturing rights for the product.
Additionally, the revised agreement grants to Schering-Plough a non-exclusive
worldwide license, with a limited right to sublicense, under Enzon's patents
covering another form of PEG called "Branched PEG", which uses a different
proprietary PEG technology than PEG-Intron.
13
<PAGE>
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 thereunto duly authorized.
ENZON, INC.
(Registrant)
Date: November 12, 1999 By: /s/ Peter G. Tombros
---------------------------------------
Peter G. Tombros
President and Chief Executive
Officer
By: /s/ Kenneth J. Zuerblis
---------------------------------------
Kenneth J. Zuerblis
Vice President, Finance and Chief Financial
Officer
(Principal Financial
and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Enzon,
Inc. and Subsidiaries Consolidated Condensed Balance Sheet as of September 30,
1999 and the Consolidated Condensed Statement of Operations for the three months
ended September 30, 1999 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 24,635,324
<SECURITIES> 0
<RECEIVABLES> 4,039,919
<ALLOWANCES> 0
<INVENTORY> 1,469,355
<CURRENT-ASSETS> 31,334,115
<PP&E> 11,911,932
<DEPRECIATION> 10,526,747
<TOTAL-ASSETS> 34,556,028
<CURRENT-LIABILITIES> 8,265,893
<BONDS> 0
0
1,070
<COMMON> 368,140
<OTHER-SE> 24,558,958
<TOTAL-LIABILITY-AND-EQUITY> 24,928,168
<SALES> 2,870,135
<TOTAL-REVENUES> 2,913,813
<CGS> 1,178,561
<TOTAL-COSTS> 5,161,815
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,958
<INCOME-PRETAX> (1,950,463)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,950,463)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,950,463)
<EPS-BASIC> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
