Enzon Inc. announced Thursday that it has entered into anagreement to place $15 million worth of its common stock witha single investment firm, Cheswick Securities Inc. of New York.

The shares (NASDAQ:ENZN) will be sold over the next nine to 12months in six separate closings, Enzon Controller Ken Zuerblistold BioWorld. At each closing shares will be sold at a 9 percentdiscount to the current market price. The company hopes toraise $2 million at each closing, Zuerblis said, and will sell onlyenough shares to reach that goal.

Enzon of Piscataway, N.J., has registered 1.7 million shares withthe Securities and Exchange Commission; the company believesthis will be sufficient for the first three closing dates. The firstclosing will be 20 trading days after the effective registrationdate of the shares, with the next two closings to follow inintervals of 20 trading days.

"This is a vehicle we believe is very well-suited to biotech,"Zuerblis said. "Biotech is built on the expectation that priceswill rise in the future." The company chose this financingmechanism, he added, because it believes it has established afavorable discount rate and can thus reduce the dilution ofshares. The company will not use an underwriter for theplacement.

While the number of shares Enzon will sell will be determinedby the fluctuations of the market, it would take 3.3 millionshares of stock selling at a 9 percent discount of their Thursdayclosing price ($5 a share) to raise the sum. Currently thecompany has 23.6 million shares outstanding. At the end of itsmost recently reported period, ending Sept. 30, the companyhad $9.9 million in cash and short-term investments. Duringthat quarter it reported a burn rate of $7 million, or $2.3million per month. Enzon expects its burn rate to drop slightlyin the fourth quarter, Zuerblis said.

Money raised from the placement will be used for generalcorporate purposes.

Enzon currently markets Adagen PEG-ADA for severe combinedimmunodeficiency disease. The company received an FDAapprovable letter in December for Oncaspar, its agent fortreatment of acute lymphoblastic leukemia in patientshypersensitive to native L-asparaginase. Oncaspar will bemarketed in the U.S. by Rhone-Poulenc Rorer.

Enzon's last financing was in January 1993 when it raised $20.6million through the sale of 3.2 million shares at $6.50 each.

-- Karl A. Thiel Associate Editor

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