Enzon is also entitled to receive an additional one-time milestone payment of $15 million in 2012 should certain royalty recognition levels be met for Peg-Intron. A portion of the proceeds will be used for retirement in full of Enzon’s outstanding 4.5% convertible notes due 2008. Enzon will retain a 75% interest in the Peg-Intron royalty, as well as 100% of other current royalties and any new royalties the company receives.
To date, Enzon says it has already reduced the outstanding amount of its 2008 convertible debt to $81.9 million through a series of successful open market repurchases at a discount to par.
“This transaction now fully removes any risk associated with repayment of the 2008 convertible note, and allows Enzon to continue to focus on its goal of building an innovative oncology company,” said Jeffrey Buchalter, chairman and CEO of Enzon.
Peg-Intron is a Peg-enhanced version of Schering-Plough’s alpha interferon product, Intron A, which is used both as a monotherapy and in combination with Rebetol (ribavirin) capsules for the treatment of chronic hepatitis C.