Enzon Pharmaceuticals Inc (NASDAQ:ENZN)

CAPS Rating: 2 out of 5

A biopharmaceutical company dedicated to the development and commercialization of therapeutics to treat patients with cancer and adjacent diseases.

Recs

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Player Avatar zzlangerhans (99.78) Submitted: 9/26/2011 7:46:55 PM : Outperform Start Price: $5.30 ENZN Score: -62.52

After all the work I've done on CAPS rebutting ridiculous pump jobs from Seeking Alpha writers and Zacks, it seems only fitting to drop a green thumb on a stock that had a negative SA article and a downgrade to sell from Zacks in the last 24 hours. Don't get me wrong, I'm not recommending a real investment in Enzon. But with 359M in cash and 135M in debt against a market cap of 360M, one could do a lot worse in terms of the balance sheet. Gradually eroding sales of PEG-Intron, the royalties of which comprise the bulk of Enzon's revenue, have proven to be a heavy drag on the share price over the last few months. But a recent 50% cut in the workforce should reduce the 6-9M quarterly burn and a phase II trial of Pegylated irinotecan PEG-SN38 in metastatic breast ca is nearing full enrollment. The development of mRNA antagonists has been mired in phase I for years and it is questionable whether it even continues at all. The final element is heavy investment by Carl Icahn and an ongoing share buyback program, which does not seem consistent with a company attempting to reduce its size and conserve cash. This is more of a wild card, since I can't predict how this might affect the share price.

In short, this is definitely not a stock to fall in love with. But the balance sheet looks good right now and there is a potentially significant catalyst in the not-so-distant future. And if Seeking Alpha and Zacks pumps often signify that a stock is topping, one can only theorize the opposite in the rare situation where both weigh in negative.

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