By Matthew Willett
Enzon Inc. is planning a public offering of convertible subordinated notes worth $400 million, and intends to use the proceeds from the sale for internal discovery and development as well as possible future acquisitions.
The notes will be convertible to shares of Enzon stock, though the terms of the notes were not released. An overallotment option to issue an additional $60 million in notes also may be exercised.
Enzon¿s vice president of finance and CEO, Ken Zuerblis, said Thursday he couldn¿t comment on the private offering other than to say that convertible notes offerings ¿close in a relatively short period of time.¿
Internal development likely will include several products in the Enzon pipeline, most notably those using PEG technology, which entails the attachment of polyethylene glycol polymer chains to a range of therapeutics. Pegylated drugs are designed to increase circulation time, improve drug solubility and stability, and reduce immunogenicity.
Prothecan is a PEG-enhanced version of camptothecin, a topoisomerase 1 inhibitor nearing a Phase II trial program.
Enzon already markets Oncaspar for acute lymphoblastic leukemia and Adagen for a form of severe combined immunodeficiency disease referred to as ¿Bubble Boy¿ disease.
Enzon also is pursuing development of a pegylated paclitaxel for cancer treatment in a Phase I trial, and a PEG-Intron/ribavirin combination therapy regulatory filing is pending with the FDA.
Enzon, of Piscataway, N.J., disclosed on Monday that its Phase III trial of PEG-Intron for injection didn¿t produce an indication of superiority compared to Intron A. Wall Street, however, saw the failure as a small one, and Enzon¿s stock (NASDAQ:ENZN) fell only $5.41 Monday, or about 7 percent.
PEG-Intron is an extended-release form of Madison, N.J.-based Schering-Plough Corp.¿s Intron A. The companies began their collaboration on the drug in 1990. Enzon provides the polyethylene glycol technology that makes the compound longer acting. The hepatitis C indication for which PEG-Intron is approved is the potential blockbuster, and Schering-Plough has ongoing trials in oncology indications.
Enzon disclosed in May its third-quarter earnings for its fiscal year 2001 of $5.5 million in net income, or 13 cents per share. For that quarter ending March 31 Enzon logged a 67 percent increase in sales and royalties earned on products, a $3.2 million jump that brought the company¿s total sales and royalties to $7.9 million.
The company said the increase was primarily due to royalties earned on sales of PEG-Intron.
At the end of March Enzon had about 41.8 million shares outstanding and cash and interest-bearing investments of about $128 million.
Enzon¿s shares (NASDAQ:ENZN) Thursday fell $1.73 to close at $66.97.