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:6/25/2016)... ... June 25, 2016 , ... Dr. Calvin ... injury. Recently, he has implemented orthobiologic procedures as a method for treating his ... of the first doctors to perform the treatment. Orthobiologics are substances that orthopaedic ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... Those who ... with these feelings, many turn to unhealthy avenues, such as drug or alcohol abuse, ... Marne, Michigan, has released tools for healthy coping following a traumatic event. , Trauma ...
(Date:6/24/2016)... ... , ... Global law firm Greenberg Traurig, P.A. announced that 20 Florida attorneys ... peers for this recognition are considered among the top 2 percent of lawyers practicing ... members of this year’s Legal Elite Hall of Fame: Miami Shareholders Mark D. ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... People across ... in Genome magazine’s Code Talker Award, an essay contest in which patients and their ... award to be presented at the 2016 National Society of Genetic Counselors (NSGC) Annual ...
(Date:6/24/2016)... ... June 24, 2016 , ... Strategic Capital Partners, ... economy by obtaining investment capital for emerging technology companies. SCP has delivered ... already resulted in more than a million dollars of capital investment for five ...
Breaking Medicine News(10 mins):
(Date:6/26/2016)... , June 27, 2016  VMS Rehab Systems, ... Board will take whatever measures required to build a ... stock which is currently listed on the OTC Markets-pink ... Company Chairman and CEO, "We are seeing an anomaly ... to understand, not only by the Company, but shareholders ...
(Date:6/24/2016)... , June 24, 2016  Global Blood ... biopharmaceutical company developing novel therapeutics for the treatment ... today announced the closing of its previously announced ... stock, at the public offering price of $18.75 ... offering were offered by GBT. GBT estimates net ...
(Date:6/24/2016)... June 24, 2016 The Academy of Managed ... recommendations that would allow biopharmaceutical companies to more ... that make formulary and coverage decisions, a move that ... new medicines. The recommendations address restrictions in ... on the drug label, a prohibition that hinders decision ...
Breaking Medicine Technology: