Enzon Pharma to spin off biotechnology business

08 May 2008

Enzon Pharmaceuticals Inc plans to spin off its novel biotechnology business from Enzon and list it as a separate company. The board of directors of the company has authorised the transaction that will result in two independent and highly focused public companies, Enzon said in a release.

''By separating these unique businesses into two focused companies, the opportunities for both the specialty pharmaceutical business and the biotechnology business could be substantially enhanced and greater value could be created than under the current structure,'' said Jeffrey H. Buchalter, chairman, resident and CEO of Enzon Pharmaceuticals.

''Operating separately will allow each company to benefit from greater strategic and managerial focus and appeal to their own unique shareholders.... The separation will enable the two businesses to compete more effectively in their respective markets and optimize their business goals, research initiatives and capital requirements. We look forward to creating this opportunity for the shareholders,'' Buchalter added.

Post spin-off, Enzon will retain the current marketed products of Abelcet, Adagen, DepoCyt and Oncaspar, the rights to current PEG royalty revenues, including PEG-Intron, Cimzia and Hematide, and the manufacturing facility in Indianapolis.

Enzon hopes the biotechnology company to leverage its customised PEGylation technology for licensing, collaboration and future royalty generation, and novel Locked Nucleic Acid (LNA) technology to develop promising therapeutics for oncology.

Enzon plans to spend approximately $150 million, representing approximately two to three years of anticipated cash needs to fund research and development efforts based on company projections, on the biotech unit.