Enzon Inc. (ENZN, Financial) filed Quarterly Report for the period ended 2010-03-31.
Enzon Inc. has a market cap of $598.73 million; its shares were traded at around $10.07 with and P/S ratio of 3.24. ENZN is in the portfolios of Seth Klarman of The Baupost Group, Carl Icahn of Icahn Capital Management LP, Michael Price of MFP Investors LLC, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC.
During the three months ended March 31, 2010, we had royalties on export sales of $10.8 million, of which $3.5 million were in Europe. This compares to $10.7 million of export sales in the comparable three-month period of 2009, of which $3.9 million were in Europe.
Research and development. For the three months ended March 31, 2010, research and development expenses increased by $0.4 million to $11.5 million as compared to the three months ended March 31, 2009. During the three months ended March 31, 2010, we initiated enrollment in Phase II trials using our PEG-SN38 compound in a study for metastatic breast cancer and a Phase I study for pediatric cancer. The amount incurred on our PEG-SN38 program for the first quarter of 2010 was $4.2 million, as compared to $3.8 million in the three months ended March 31, 2009. The cost associated with the preclinical and clinical activities for the mRNA antagonists using the LNA technology was $6.4 million in the first quarter of 2010, which included a $1.0 million milestone payment for the beta-catenin antagonist. In the period ended March 31, 2009, we incurred $6.2 million for the development of the mRNA antagonist programs. We are currently conducting Phase I clinical trials for the HIF-1 alpha and survivin antagonists, as well as preclinical studies for the additional six mRNA antagonist-directed oncology targets which are known to play an important role in cancer cell growth. We are also working on identifying additional compounds that may benefit from our proprietary customized PEG linker technology. This effort resulted in an investment of $0.9 million for the first quarter of 2010 and $1.1 million for the first quarter of 2009.
The amount reported as discontinued operations for the three months ended March 31, 2010 is comprised of the results of operations of the specialty pharmaceutical business for the period January 1 through January 29, 2010 of $3.7 million plus the gain realized on the sale of the specialty pharmaceutical business of $175.4 million. The cash purchase price was $300.0 million; working capital adjustments, which remain subject to review were approximately $9.0 million; and transaction costs amounted to $5.0 million. We allocated $40.9 million of the total purchase price to the sale of in-process research and development. The net proceeds attributable to discontinued operations of $263.1 million, less the net carrying value of asset sold of $87.6 million, yielded the $175.4 million gain. In addition to the initial cash received in the transaction, we may receive an amount of up to $27.0 million based on certain success milestones. Furthermore, we may receive royalties of five to ten percent on incremental net sales above the baseline 2009 amount from our four marketed specialty pharmaceutical products through 2014.
Net cash used in financing activities was $3.1 million in the first quarter of 2010 versus $15.4 million in the first quarter of 2009. During the first quarter of 2010, we utilized $5.8 million to repurchase shares of the Companys common stock on the open market as part of the share repurchase program initiated in December of 2009. The cash provided by investing activities in 2009 was used to repurchase $20.4 million principal amount of the 4% notes during the first quarter of 2009 for a cash outlay of $15.6 million.
As of March 31, 2010, we had outstanding $134.5 million of convertible senior notes that bear interest at an annual rate of 4%. The sale of our specialty pharmaceutical business constituted a fundamental change under the indenture for the notes, which triggered a change in the conversion rate from 104.712 shares per $1,000 principal amount of notes to 116.535 shares per $1,000 principal amount of notes during the period January 29, 2010 to March 4, 2010. During this period, $115.6 million principal amount of the notes were converted into approximately 13.5 million shares of our common stock. Subsequent to March 4, 2010, the original conversion rate of 104.712 shares per $1,000 principal amount is again in effect. Interest is payable on June 1 and December 1 for the 4% notes. Accrued interest on the notes was $1.8 million and $0.8 million, respectively, as of March 31, 2010 and December 31, 2009.
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Enzon Inc. has a market cap of $598.73 million; its shares were traded at around $10.07 with and P/S ratio of 3.24. ENZN is in the portfolios of Seth Klarman of The Baupost Group, Carl Icahn of Icahn Capital Management LP, Michael Price of MFP Investors LLC, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
On January 29, 2010, we consummated the sale of our specialty pharmaceutical business. The cash purchase price including certain customary working capital adjustments, was $309.0 million. Transaction costs amounted to approximately $5.0 million, reducing net proceeds to $304.0 million. An additional amount of up to $27 million may be received based on certain success milestones. In addition, we may receive royalties of five to ten percent on incremental net sales above the baseline 2009 amount from our four marketed specialty pharmaceutical products through 2014. Pursuant to a transition services agreement, we will perform product-support research and development as requested by the purchaser for a period of up to three years after the sale. We also will provide various general and administrative functions for the purchasing parties for periods of time subsequent to the close of the transaction not to exceed one year. In consideration for our efforts related to the transition services agreement, we will be compensated at a market rate defined in the transition services agreement.During the three months ended March 31, 2010, we had royalties on export sales of $10.8 million, of which $3.5 million were in Europe. This compares to $10.7 million of export sales in the comparable three-month period of 2009, of which $3.9 million were in Europe.
Research and development. For the three months ended March 31, 2010, research and development expenses increased by $0.4 million to $11.5 million as compared to the three months ended March 31, 2009. During the three months ended March 31, 2010, we initiated enrollment in Phase II trials using our PEG-SN38 compound in a study for metastatic breast cancer and a Phase I study for pediatric cancer. The amount incurred on our PEG-SN38 program for the first quarter of 2010 was $4.2 million, as compared to $3.8 million in the three months ended March 31, 2009. The cost associated with the preclinical and clinical activities for the mRNA antagonists using the LNA technology was $6.4 million in the first quarter of 2010, which included a $1.0 million milestone payment for the beta-catenin antagonist. In the period ended March 31, 2009, we incurred $6.2 million for the development of the mRNA antagonist programs. We are currently conducting Phase I clinical trials for the HIF-1 alpha and survivin antagonists, as well as preclinical studies for the additional six mRNA antagonist-directed oncology targets which are known to play an important role in cancer cell growth. We are also working on identifying additional compounds that may benefit from our proprietary customized PEG linker technology. This effort resulted in an investment of $0.9 million for the first quarter of 2010 and $1.1 million for the first quarter of 2009.
The amount reported as discontinued operations for the three months ended March 31, 2010 is comprised of the results of operations of the specialty pharmaceutical business for the period January 1 through January 29, 2010 of $3.7 million plus the gain realized on the sale of the specialty pharmaceutical business of $175.4 million. The cash purchase price was $300.0 million; working capital adjustments, which remain subject to review were approximately $9.0 million; and transaction costs amounted to $5.0 million. We allocated $40.9 million of the total purchase price to the sale of in-process research and development. The net proceeds attributable to discontinued operations of $263.1 million, less the net carrying value of asset sold of $87.6 million, yielded the $175.4 million gain. In addition to the initial cash received in the transaction, we may receive an amount of up to $27.0 million based on certain success milestones. Furthermore, we may receive royalties of five to ten percent on incremental net sales above the baseline 2009 amount from our four marketed specialty pharmaceutical products through 2014.
Net cash used in financing activities was $3.1 million in the first quarter of 2010 versus $15.4 million in the first quarter of 2009. During the first quarter of 2010, we utilized $5.8 million to repurchase shares of the Companys common stock on the open market as part of the share repurchase program initiated in December of 2009. The cash provided by investing activities in 2009 was used to repurchase $20.4 million principal amount of the 4% notes during the first quarter of 2009 for a cash outlay of $15.6 million.
As of March 31, 2010, we had outstanding $134.5 million of convertible senior notes that bear interest at an annual rate of 4%. The sale of our specialty pharmaceutical business constituted a fundamental change under the indenture for the notes, which triggered a change in the conversion rate from 104.712 shares per $1,000 principal amount of notes to 116.535 shares per $1,000 principal amount of notes during the period January 29, 2010 to March 4, 2010. During this period, $115.6 million principal amount of the notes were converted into approximately 13.5 million shares of our common stock. Subsequent to March 4, 2010, the original conversion rate of 104.712 shares per $1,000 principal amount is again in effect. Interest is payable on June 1 and December 1 for the 4% notes. Accrued interest on the notes was $1.8 million and $0.8 million, respectively, as of March 31, 2010 and December 31, 2009.
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