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Enzon Inc. (ENZN) filed Quarterly Report for the period ended 2011-09-30.
Enzon Inc. has a market cap of $356 million; its shares were traded at around $7.31 with and P/S ratio of 3.6.
This is the annual revenues and earnings per share of ENZN over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of ENZN.
Highlight of Business Operations:
We receive income from royalties on sales of products by other companies that use our proprietary PEGylation technology, including PEGINTRON, marketed by Merck, Macugen, marketed by Pfizer, Inc. outside the U.S. and Eyetech, Inc. in the U.S., and CIMZIA, marketed by UCB Pharma. Notification from the third-party licensee of the royalties earned under the license agreement is the basis for royalty revenue recognition. This information generally is received from the licensees in the quarter subsequent to the period in which the sales occur. Royalty revenue for the three months ended September 30, 2011 amounted to $10.2 million, a decrease of 6% from the three months ended September 30, 2010. For the nine months ended September 30, 2011, royalty revenue amounted to $31.1 million, a decrease of 9% from the nine months ended September 30, 2010. The decline in royalty revenue was primarily attributable to lower sales of PEGINTRON, which continues to constitute the most significant source of our royalty revenues.During the three months ended September 30, 2011, we had royalties on PEGINTRON export sales of $8.1 million, of which $2.5 million were in Japan and $2.5 million were in Europe. This compares to $8.9 million of royalties on export sales in the comparable three-month period of 2010, of which $2.9 million were in Japan and $3.1 million were in Europe. For the nine months ended September 30, 2011, we had royalties on export sales of $25.3 million, of which $8.7 million were in Japan and $8.1 were in Europe. This compares to $28.6 million of royalties on export sales in 2010, of which $9.0 million were in Japan and $10.0 million were in Europe.
As part of the transition services agreement referred to above, we are being compensated for various general and administrative services provided to the purchaser of the specialty pharmaceutical business. The compensation for this work includes reimbursement of costs incurred plus a mark-up defined in the agreement. The expenses incurred in relation to these services are reported as general and administrative – contracted services. Our involvement in the transitioning of general and administrative activities is essentially complete, and we expect the revenue and associated expenses to be de minimis going forward. During the three months ended September 30, 2011, approximately $2,000 was earned for these services. This compares to approximately $0.1 million for the three months ended September 30, 2010. For the nine months ended September 30, 2011, approximately $0.1 million was earned for these services, compared to $2.4 million for the period from January 29, 2010 through September 30, 2010.
Also reflected in miscellaneous revenue are rental receipts from the sublease of unused manufacturing and excess office space for which we have on-going lease commitments. The underlying lease expense is reflected in general and administrative expenses. We received $0.2 million of sublease income during the third quarter of 2011 and $0.4 million for the nine months ended September 30, 2011. This compares to $0.1 million during the third quarter of 2010 and $0.2 million for the nine months ended September 30, 2010.
The sale of the specialty pharmaceutical business involved the application of guidance regarding multiple deliverables in separating the revenues associated with the sale of in-process research and development from the other elements of the transaction, namely the assets sold as part of discontinued operations and our continuing involvement in contract research activities. We determined that the in-process research and development had value to the buyer of the specialty pharmaceutical business on a stand-alone basis and that there was objective and reliable evidence available to support the allocation of the total purchase price to the respective units of accounting.
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