[LETTERHEAD OF DORSEY & WHITNEY LLP]
November 8, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Filing Desk
Re: Enzon, Inc.- Current Report on Form 8-K
Ladies and Gentlemen:
On behalf of our client Enzon, Inc. (the "Company"), we are transmitting
electronically the Company's Current Report on Form 8-K (the "Form 8-K") dated
November 8, 2000.
Please note that the Form 8-K filed herewith contains a conformed signature
and that an original, manual signature will be retained in the Company's records
for five (5) years.
Very truly yours,
/s/ Eva C. Philips
----------------------
Eva C. Philips
cc: Kenneth J. Zuerblis
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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, 2000
ENZON, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12957 22-237286
(State or other jurisdiction (Commission (IRS Employer
of 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
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
Enzon Reports First Quarter Fiscal Year 2001 Earnings
Enzon, Inc. (the "Company") 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.
<PAGE>
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.
<PAGE>
Except for the historical information herein, the matters discussed herein
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-Qs 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.
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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, 2000
ENZON, INC.
-----------------------------------
(Registrant)
By: /s/ Kenneth J. Zuerblis
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Kenneth J. Zuerblis
Vice President, Finance and Chief Financial
Officer
