Enzon may sell Indy plant alongside specialty pharma
Icahn acquired a near 7 per cent stake in Enzon in March, and promptly put pressure on the company to sell off assets or put itself on the block.
The drugmaker said in May it was considering the spin-off of its biotechnology business to create two separate, focused companies. Now it suggests it could sell the entire specialty division and its manufacturing facility in Indianapolis, recently swelled by the consolidation of operations formerly sited in New Jersey.
Back in May, Enzon’s chairman and CEO Jeffrey Buchalter said 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.”
Enzon’s speciality drugs business sells cancer drugs Oncaspar (pegaspargase) and DepoCyt (cytarabine), and Buchalter has also said the firm might consider selling one or more product lines.
Enzon also has a small contract manufacturing business operating out of the Indianapolis facility that was created to try to make use of surplus capacity. Second quarter contract manufacturing sales increased to $6.6m from $5.9m in the corresponding period of the prior year.
"During our efforts to spin-off our biotechnology business, it became clear that we should also explore attractive opportunities for Enzon's other businesses," said Buchalter. He added that Enzon had received "confidential, nonbinding, preliminary indications of interest” for all or parts of the specialty drugs unit.
The biotechnology unit – to be called Evivrus - has a royalty revenue stream from Enzon’s proprietary PEGylation technology for improved delivery of protein drugs, as well as its Locked Nucleic Acid technology to develop promising therapeutics for oncology. Enzon intends fund the biotech with around $150m, representing about two to three years of operating cash.
Icahn is known for taking stakes in pharmaceutical companies and then pressing for often dramatic changes. He serves as chairman of ImClone Systems – now subject to a $4.6bn takeover bid from Bristol-Myers Squibb - having successfully led a shareholder revolt against management that resulted in the departure of a number of board members.
He also owns a stake in Biogen Idec and has been pushing for that company to offer itself for acquisition, but so far has been rebuffed by other shareholders.
