Enzon Pharmaceuticals

Source: Healthcare Digital

Date :22/11/2007 06:39:19

Chief Financial Officer Craig Tooman explains how Enzon has transformed itself from a sleeping giant to an exciting company with the dynamism and excitement of a startup.

Written by Emmet Cole and Produced by James McCann

New Jersey-based Enzon Pharmaceuticals is a 25-year old startup. The Enzon name is associated with a track record of creating proven and successful proprietary products, but it has undergone a transformation in recent years, giving the company a dynamic edge in a competitive market – and annual revenues approaching $200 million.

“Enzon is really like a big startup company. It has all the history and all the heritage. It has the foundation of a great technology platform. And yet it also has a completely new sense of enthusiasm for innovation,” says Craig Tooman, Enzon CFO, who arrived at the company with CEO Jeffrey Buchalter in 2004.

Buchalter and Tooman had been together on the forefront of pharmaceutical innovation at two stops before Enzon, first at Pharmacia Corporation, and then at ILEX Oncology, Inc. When the pair first arrived at Enzon, they saw that it was a shell of what it could be. Disorganized and debt-ridden, Enzon was a corporation living off past achievements –heavily reliant on its PEGylation product and with very little product pipeline, says Tooman.

“Through our strategic planning with the board we decided to start reinvesting in the company. That hadn’t been happening, but we needed to take that step to rebuild the pipeline,” he says.

Recharged, streamlined and bursting with innovation, Enzon is now back on the forefront of the fight against cancer, researching new oncology products and moving beyond its historical dependency on PEGylation.

PEGylation

Since the company’s inception in 1981, Enzon’s biggest selling product – and the basis of its reputation – has been PEGylation; an innovative technology that has brought improved treatments for diseases like Hepatitis C and leukemia.

Molecules like proteins, peptides, antibodies and oligonucleotides are often saddled with limitations that hinder their pharmaceutical effectiveness. By providing a protective barrier around the molecules to allow them to survive in the body longer, PEGylation technology can then help overcome their natural limitations, and assist in the creation of better therapeutic compounds.

Currently, five products on the market utilize Enzon’s PEGylation technology. Two – ADAGEN (the first FDA-approved PEGylated protein, introduced in 1991) and ONCASPAR – are marketed by Enzon.

Enzon also receives royalties from three other products, netting the company $71 million in 2006 alone. PEGylation enabled pharmaceutical giant Schering-Plough to turn PEG-Intron into an $800 million dollar drug for Hepatitis C.

Beyond Reputation

The new executive team could draw on the reputation of PEGylation technology when they arrived at Enzon, but did not want the company to settle for royalties alone.

“You have to differentiate your company from the competition. We’re not looking for ‘me too’ drugs that offer a small advantage,” says Tooman, noting the trend among pharmaceutical companies to patent small improvements on pre-existing technologies.

The company had more pressing reasons to look beyond a royalty-based income. Enzon was floundering in debt, relying too heavily on third parties and stuck in neutral in an industry that leaves such companies behind.

“What’s unusual about Enzon is we have four marketed products, which I think is atypical for a company our size,” Tooman says, highlighting the fact that Enzon has 400 employees. “We had manufacturing and we had royalties and our own sales force. We had all the pieces, but they weren’t well integrated.”

The new management team refinanced the debt, shed some mismatched programs, and attracted some new talent in research and development –and the company is reaping the benefits, especially in the research and development of new drugs.

The company now boasts a refocused sales force, an exciting product pipeline, and a modern 56,000 square-foot manufacturing facility near Indianapolis, Indiana that streamlines in-house operations and provides state-of-the-art drug manufacturing.

Enzon’s future lies in the development of new oncology drugs. Oncology was Buchalter and Tooman’s background at their previous companies. Now the fight against cancer is reenergizing Enzon’s business.

“It’s become more and more challenging to have drugs approved by the FDA without good differentiation from a clinical standpoint, so we’re investing in areas where we really think we can be differentiated and be innovative,” says Tooman.

“We’re working on an enhanced combination of PEGylation solutions across many technology fronts, but especially in relation to cancer,” Tooman says. “If you look at what we used to do a decade ago versus what we’re doing now, we’re now customizing the PEGylation chemistry for individual drugs, as opposed to one size fits all,” says Tooman.

Future

Although “very little-known”, Enzon is a company that has completed its “repair phase” and is now ready for a sustained move forward, explains Tooman. “In essence it’s a little company that can do many of the things that a big company can do, just a little more quickly and nimbly,” he says.

In 2006, the company had $186 million in revenues, $110 million of which came from its own products and less than half from royalties – a transformation that looks set to continue long into the future.