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ENZON STOCK PRICE PEGGED TO TECHNOLOGY POTENTIAL, CLINICAL DEVELOPMENTS

Executive Summary

A two-point April advance increased Enzon's market valuation by one-third, further helping the stock out of its post-October doldrums. After trading as high as 12-3/4 and as low as 2-7/16 during the past 12 months, Enzon stock finished April at $ 8 a share. The issue began 1988 at 4-3/4. In January, Enzon filed its first NDA, announcing at the time plans for three additional filings over the next one to three years. Currently pending at FDA is an application for polyethylene glycol-modified adenosine deaminase (PEG-ADA), an orphan product for treatment of severe combined immunodeficiency disease in children. Enzon products in the clinic include: a PEG formulation of L-asparaginase, for treatment of acute lymphocytic leukemia; PEG-L-asparaginase/methotrexate, for treatment of refractory breast and lung cancer; PEG-superoxide dismutase, for reperfusion following kidney transplantation; and PEG-uricase, for treatment of hyperuricemia. Kodak has marketing rights to the last two products, along with an 18.7% equity position in Enzon. By using polyethylene glycol to modify the surface structure of proteins, the firm maintains it can alter where proteins go in the body. Benefits include longer protein half lives and lower potential for immune response. Developed at Rutgers University, the PEG technology is licensed to Enzon. As further evidence of PEG's potential as a commercially viable technology, Cetus recently announced plans to begin initial clinical study of the PEG version of interleukin-2 ("The Pink Sheet" April 25, T&G-2). Meanwhile, Cetus says it will file a Product License Application for its Proleukin IL-2 product sometime this year. The patent status of the Cetus product was made murky by the issuing of a patent to Ajinomoto in mid-April. Cetus was off two points in April (closing at 12). Another company that caught the "Street's" attention in April was drug design firm Agouron (up 3-1/4 to 13-1/4), which announced a joint development/equity investment agreement with Lilly ("The Pink Sheet" April 25, T&G-3). Lilly is paying $ 3.5 mil. in exchange for 250,000 shares of the La Jolla, Calif.-based firm, and Agouron will use its IDASCA three-dimensional drug design system to develop new drugs in conjunction with Lilly. Overall, among the 57 issues tracked by the "F-D-C" Monthly Index of O-T-C stocks, 20 advanced, 32 declined and five remained unchanged in April. The Index Composite's 2.9% advance showed the relative strength the pharmaceutical-related O-T-C issues -- the S&P 400 was up 1.4% to 304.48 while the Dow Jones rose 2.2% to finish the month at 2032.33. The Wholesaler Component continues to show strength in 1988, having posted gains in each of the year's first four months. Carrying the Component to its 5.7% April advance were the two most heavily weighted issues, Alco Health Services (up 2-3/8 to 20-3/8) and Owens-Minor (up 1-1/8 to 18-3/8). The other four wholesaler issues -- Bindley Western, Durr-Fillauer, Krelitz and Moore Medical -- lost ground in April. Index is published monthly on basis of weighted average from NASDAQ closing bid prices for 57 stocks: 32 Pharmaceuticals, one of which is traded on AMEX (K-V), 15 Diversifieds, two of which are traded on AMEX (P. Leiner & Natl. Patent), 4 Drug Chains and 6 Drug & Medical Supply Whslrs., one of which is traded on AMEX (Moore Medical) and one traded on NYSE (Owens, Minor). Chart omitted.

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