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Enzon battered, but execs put on brave face
Though Q4 loss was $285.6M, they remain optimistic about coming year
Wednesday, March 01, 2006
BY JEFF MAY
Star-Ledger Staff
Forced to write down the value of its lead antifungal product, Enzon Pharmaceuticals yesterday posted dismal results for its year- end quarter.
The drugmaker, which has its headquarters in Bridgewater, reported a net loss of $285.6 million, or $6.56 a share. That compares with a break-even quarter a year ago.
Company officials tried to soften the news with optimistic projections for the current year. Jeffrey Buchalter, who became chief executive in late 2004, said he had spent the past year refocusing Enzon's operations. Among other changes, the company now reports its business in three segments instead of one and has shifted to a fiscal year that coincides with the calendar year.
"This quarter, we are really closing a chapter on the old Enzon, and opening a new chapter on the new Enzon," Chief Financial Officer Craig Tooman said on a conference call with analysts.
Enzon recorded $284 million worth of write-offs and loss of goodwill in the quarter due to disappointing sales of Abelcet, an antifungal treatment administered intravenously to patients with compromised immune systems. Sales of the product slid from $14.3 million a year ago to just under $10 million in the most recent quarter, a 30 percent drop.
"The antifungal marketplace is both crowded and competitive," Buchalter said on the call. "We recognize the ongoing challenges in this market."
The company also suffered a lesser slip in its No. 2 product from a year ago, Adagen.
Overall, quarterly revenue dropped 31 percent, to $29.7 million, on a year-over-year basis. The lone analyst polled by Thomson Financial had expected sales of $44 million.
A change in the accounting of royalty payments by pharmaceutical partners accounted for some of the shortfall. The company had previously recorded royalties on an estimated basis, but the calculations were often inexact and subject to revision. In the year-end quarter, Enzon shifted to a system that records royalties only when payments are actually made.
Despite the decline in sales for the quarter, Buchalter highlighted two cancer treatments that showed promising growth, and said the company would now be "oncology-focused." He predicted product sales of more than $100 million in the current year, despite the disappointing performance of Abelcet.
"2006 is about execution, and you're going to see that this year," Buchalter said.
Jeff May can be reached at jmay@starledger.com or (973) 392-4282.
Enzon battered, but execs put on brave face
Though Q4 loss was $285.6M, they remain optimistic about coming year
Wednesday, March 01, 2006
BY JEFF MAY
Star-Ledger Staff
Forced to write down the value of its lead antifungal product, Enzon Pharmaceuticals yesterday posted dismal results for its year- end quarter.
The drugmaker, which has its headquarters in Bridgewater, reported a net loss of $285.6 million, or $6.56 a share. That compares with a break-even quarter a year ago.
Company officials tried to soften the news with optimistic projections for the current year. Jeffrey Buchalter, who became chief executive in late 2004, said he had spent the past year refocusing Enzon's operations. Among other changes, the company now reports its business in three segments instead of one and has shifted to a fiscal year that coincides with the calendar year.
"This quarter, we are really closing a chapter on the old Enzon, and opening a new chapter on the new Enzon," Chief Financial Officer Craig Tooman said on a conference call with analysts.
Enzon recorded $284 million worth of write-offs and loss of goodwill in the quarter due to disappointing sales of Abelcet, an antifungal treatment administered intravenously to patients with compromised immune systems. Sales of the product slid from $14.3 million a year ago to just under $10 million in the most recent quarter, a 30 percent drop.
"The antifungal marketplace is both crowded and competitive," Buchalter said on the call. "We recognize the ongoing challenges in this market."
The company also suffered a lesser slip in its No. 2 product from a year ago, Adagen.
Overall, quarterly revenue dropped 31 percent, to $29.7 million, on a year-over-year basis. The lone analyst polled by Thomson Financial had expected sales of $44 million.
A change in the accounting of royalty payments by pharmaceutical partners accounted for some of the shortfall. The company had previously recorded royalties on an estimated basis, but the calculations were often inexact and subject to revision. In the year-end quarter, Enzon shifted to a system that records royalties only when payments are actually made.
Despite the decline in sales for the quarter, Buchalter highlighted two cancer treatments that showed promising growth, and said the company would now be "oncology-focused." He predicted product sales of more than $100 million in the current year, despite the disappointing performance of Abelcet.
"2006 is about execution, and you're going to see that this year," Buchalter said.
Jeff May can be reached at jmay@starledger.com or (973) 392-4282.
posted by Jones Lang LaSalle NJ News Blog at 11:09 AM
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