Navigation Links
Major Shareholders Criticize Enzon Pharmaceuticals Management Team in Open Letter
Date:1/30/2009

Investors Specify Concerns and Propose Remedies to Enzon CEO Jeffrey Buchalter and the Board of Directors

NEW YORK, Jan. 30 /PRNewswire/ -- On January 28, 2009, Knott Partners and affiliated funds, which own approximately 1.8 million shares of outstanding common stock of Enzon Pharmaceuticals, sent the following letter to the company. The letter, addressed to Enzon CEO Jeffrey Buchalter as well as the Board of Directors, expresses the investor group's serious concerns about Enzon's management, strategy and share price. It proposes four steps the company should take in the immediate future to rebuild its market value and reputation.

The full text of the letter to Enzon Pharmaceuticals is below. For more information, please contact Pat Eaton-Buettner at Knott Partners at (516) 364-0303 or PBuettner@knottpartners.com.

Dear Mr. Buchalter:

Entities managed by Dorset Management/Knott Partners are significant shareholders of Enzon Pharmaceuticals ("Enzon" or the "Company"), currently owning approximately 1.8 million shares of common stock. We write to express our concerns regarding the direction of the Company.

Over the past five years, ENZN's stock price has been a huge disappointment to shareholders. While we applaud certain of management's initiatives, such as monetizing part of the royalty stream and licensing pharmaceutical programs, the stock has declined from a high of more than $17 in 2004 to its recent price of approximately $6.60 (after plunging below $4 last November). At the same time, the Company's board has seen fit to compensate management very handsomely over this same time period.

In our opinion, Enzon continues to trade at a deep discount to its actual value as a consequence of multiple missteps by management. A non-exhaustive list includes:

  1. CEO Jeff Buchalter has been unwilling and/or unable to communicate a strategic vision that investors can support.
  2. Mr. Buchalter has also been one of the least accessible CEOs of a small biopharmaceutical company that we have ever come across. This has been evidenced by a paucity of meetings with investors, lack of presence at institutional investor conferences, and an apparent disinterest in responding to inquiries from shareholders and sell-side analysts. As a result, we believe that the market does not appreciate the value of the Company's clinical programs.
  3. Management mishandled last year's search for a buyer for certain Company assets by restricting the process. We believe all options should have been left on the table with potential buyers, including the sale of the entire Company, or the sale of the specialty pharmaceuticals business with or without the royalty stream.
  4. Management compensation is well out of line with the Company's stock price performance.
  5. The idea of spinning off the biotech R&D entity was flawed from the beginning, given market conditions which afford little value to Phase I programs. This is particularly true when management has not done nearly enough to explain and justify these programs to potential investors.

Steps must be taken to remedy these past missteps, improve the Company's business and prospects, and ultimately elevate shareholder value. Among other things, we believe that Enzon's current board should consider the following steps to increase shareholder value:

  1. Institute an aggressive share buyback plan in addition to the recently completed tender offer for a portion of the Company's convertible debt.
  2. Hold a legitimate auction for the entire company or, at minimum, the entire specialty pharmaceutical business.
  3. License out one or more of the current Phase I programs for which the Company is not receiving an adequate valuation.
  4. Prioritize better communication with current shareholders, industry professionals, and potential investors.

We would recommend the above steps be taken immediately if not sooner. We intend to hold management and the board of directors accountable for these items, as well as any additional management missteps. We will take whatever measures are necessary to protect and enhance shareholder value. We are available to discuss these matters further at your convenience.


'/>"/>
SOURCE Knott Partners
Copyright©2009 PR Newswire.
All rights reserved

Related medicine news :

1. Omnicell is Awarded Contract by Major National Academic Medical Center
2. CHPA, Nielsen: OTC Heartburn Therapy Saves Nearly $800 Million Annually, Vast Majority of OTC Heartburn Consumers Satisfied
3. First-Ever Over-the-Counter Dual Action Iron Supplement Available at Major Retail Outlets in the United States; Bifera is a New, Innovative Dual Iron Supplement Now on the Market
4. Peptimmune Grants Major Pharmaceutical Company Exclusive Option to License PI-2301 for Multiple Sclerosis
5. Fattah Calls SCHIP Vote Major Stride in Expanding Health Care
6. First-of-Its Kind Study: Medicare for All (Single-Payer) Reform Would Be Major Stimulus for Economy With 2.6 Million New Jobs, $317 Billion in Business Revenue, $100 Billion in Wages
7. Ambulatory Services of America, Inc. Completes Purchase of Majority Interest in Rosa of Georgia, LLC
8. Food and Drug Law Institute Sponsors Major Conference on Nanotechnology Law, Regulation and Policy
9. New Survey Reveals Majority of Women of Child-Bearing Age Unaware Folic Acid Should Be Consumed Before Pregnancy
10. Selflessness, core of all major world religions, has neuropsychological connection
11. Rotary Action Group Helps Launch Major Public-Private HIV Prevention Initiative in Kenya
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:9/22/2017)... ... September 22, 2017 , ... TopConsumerReviews.com ... by Native Remedies that helps promote pancreatic health and regulate blood sugar ... some prescription-based approaches can have negative side effects, and with the changes in ...
(Date:9/22/2017)... , ... September 22, 2017 , ... “Letters From Home”: ... people, even the lost, have value to God. “Letters From Home” is the creation ... a member of the President’s Cabinet of Jerry Savelle Ministries International, who has traveled ...
(Date:9/21/2017)... ... September 21, 2017 , ... 38-Year-Old Plastic Surgeon Gill at Aesthetic Surgery ... is pleased to announce that Plastic Surgeon Kiranjeet Gill has been awarded as one ... is an annual award that was started in 2003 to salute young achievers in ...
(Date:9/21/2017)... ... September 21, 2017 , ... ... of a new member survey conducted by the International Society of Hair ... from 2014 to 2016 rose 60 percent, with 635,189 procedures performed in 2016. ...
(Date:9/21/2017)... ... September 21, 2017 , ... The New England Center for Children® ... the election of Yie-Hsin Hung to the Board of Directors. , “The New ... Directors. Ms. Hung is an invaluable addition to our team,” said Vincent Strully, Jr., ...
Breaking Medicine News(10 mins):
(Date:9/5/2017)... -- Oramed Pharmaceuticals Inc. (NASDAQ: ORMP ) ... focused on the development of oral drug delivery systems, ... with the U.S. Food and Drug Administration (FDA) regarding ... At the meeting, the FDA ... of ORMD-0801, would be a Biologics License Application (BLA).  ...
(Date:9/1/2017)... WHIPPANY, N.J. , Sept. 1, 2017  Bayer will ... at the European Society for Medical Oncology (ESMO) 2017 Congress, ... studies presented will include new preclinical and clinical data on ... from two earlier pipeline projects. ... of the best minds in cancer research at ESMO," said ...
(Date:8/29/2017)... RANDOLPH, N.J. , Aug. 29, 2017 ... inventory management, security, and regulatory compliance for veterinary practices ... today announced a new partnership that makes TITAN,s expertise ... legal compliance available to Cubex,s clients nationally. ... healthcare provider buying and handling controlled substances is at ...
Breaking Medicine Technology: