Enzon Pharmaceuticals (ENZN) 8-K Enzon Completes Sale of Specialty Pharmaceutical Business

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following Unaudited Pro Forma Condensed Consolidated Balance Sheet and the Unaudited Pro Forma Condensed Consolidated Statements of Operations are derived from the historical consolidated financial statements of Enzon Pharmaceuticals, Inc. and give effect to (i) the sale (the "Asset Sale") of Enzon's specialty pharmaceuticals business ("Specialty Pharmaceuticals") to Klee Pharmaceuticals, Inc. and Defiante Farmacêutica, S.A. (together, the "Purchasing Parties") pursuant to the Asset Purchase Agreement (the "Asset Purchase Agreement"), dated as of November 9, 2009, by and between the Purchasing Parties and Sigma-Tau Finanziaria S.p.A. (solely with respect to certain sections of the Asset Purchase Agreement), on the one hand, and Enzon, on the other hand, (ii) the receipt of the net proceeds from the Asset Sale and (iii) the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements. The following unaudited pro forma condensed consolidated financial statements reflect Enzon’s continued ownership of its royalties and the research and development operations.

Pro forma financial information is intended to provide investors with information about the continuing impact of a transaction by showing how a specific transaction might have affected historical financial statements, illustrating the scope of the change in the historical financial position and results of operations. The adjustments made to historical information give effect to events that are directly attributable to the Asset Sale, factually supportable, and expected to have a continuing impact.

The unaudited pro forma condensed consolidated financial statements consist of:

· Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2009;

· Unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine months ended September 30, 2009 and September 30, 2008; and

· Unaudited Pro Forma Condensed Consolidated Statements of Operations for the years ended December 31, 2008, December 31, 2007 and December 31, 2006.

The unaudited pro forma condensed consolidated financial statements have been prepared giving effect to the Asset Sale as if it occurred as of September 30, 2009 for the Unaudited Pro Forma Condensed Consolidated Balance Sheet and as of January 1, 2006 for the Unaudited Pro Forma Condensed Consolidated Statements of Operations.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical audited consolidated financial statements and notes thereto included in Enzon’s Form 10-K for the year ended December 31, 2008 and Form 10-Q for the nine months ended September 30, 2009, as filed with the Securities and Exchange Commission, which are incorporated herein by reference.

The unaudited pro forma condensed consolidated financial statements are prepared in accordance with Article 11 of Regulation S-X. The pro forma adjustments are described in the accompanying notes and are based upon information and assumptions available at the time of the filing of this Current Report of Form 8-K proxy statement.

Enzon did not account for Specialty Pharmaceuticals as, and it was not operated as, a separate, stand-alone entity, subsidiary or division for the periods presented. The unaudited pro forma condensed consolidated financial statements do not purport to represent, and are not necessarily indicative of, what Enzon's actual financial position and results of operations would have been had the Asset Sale occurred on the dates indicated. In addition, these unaudited pro forma condensed consolidated financial statements should not be considered to be fully indicative of Enzon's future financial performance. For example, actions that management may undertake to reduce overhead expenses in light of the Asset Sale are not reflected.

1

UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED BALANCE SHEET

September 30, 2009

(In thousands)

			Pro Forma Adjustments
	As Reported		Sale of Specialty Pharmaceuticals		Other Adjustments			Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	48,614	$	—	$	300,000	(a)	$	348,614
Short-term investments		61,899		—		—			61,899
Accounts receivable, net		15,199		14,918		—			281
Inventories		17,061		17,061		—			—
Other current assets		7,626		3,119		—			4,507
Total current assets		150,399		35,098		300,000			415,301
Property and equipment, net		40,623		12,173		—			28,450
Marketable securities		90,791		—		—			90,791
Amortizable intangible assets, net		52,514		52,514		—			—
Other assets		3,348		90		—			3,258
Total assets	$	337,675	$	99,875	$	300,000		$	537,800
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,007	$	4,408	$	—		$	1,599
Accrued expenses		23,733		10,114		—			13,619
Total current liabilities		29,740		14,522		—			15,218
Notes payable		250,050		—		—			250,050
Other liabilities		4,482		—		—			4,482
Total liabilities		284,272		14,522		—			269,750
Stockholders’ equity		53,403		85,353		300,000	(b)		268,050
Total liabilities and stockholders’ equity	$	337,675	$	99,875	$	300,000		$	537,800

2

UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2009

(In thousands, except per-share data)

				Pro Forma Adjustments
	As Reported			Sale of Specialty Pharmaceuticals			Other Adjustments			Pro Forma
Product sales, net	$	88,250		$	88,250		$	—		$	—
Royalties		41,146			1,931			—			39,215
Contract manufacturing		11,037			11,037			—			—
Contract research and development		—			—			5,202	(d)		5,202
Total revenues		140,433			101,218			5,202			44,417
Costs and expenses:
Cost of product sales and contract manufacturing		37,357			37,357			—			—
Research and development		53,783			19,450			5,202	(d)		39,535
Selling, general and administrative		46,197			36,183			17,340	(c)		27,354
Amortization of acquired intangible assets		500			500			—			—
Restructuring charge		1,610			916			—			694
Total costs and expenses		139,447			94,406			22,542			67,583
Operating income (loss)		986			6,812			(17,340	)		(23,166	)
Other expense		(438	)		—			—			(438	)
Income (loss) before income tax		548			6,812			(17,340	)		(23,604	)
Income tax benefit		(699	)		(243	)		—	(e)		(456	)
Net income (loss)	$	1,247		$	7,055		$	(17,340	)	$	(23,148	)
Earnings (loss) per common share:
Basic	$	0.03								$	(0.51	)
Diluted	$	0.03	*							$	(0.51	)
Weighted average shares outstanding:
Basic		45,116									45,116
Diluted		45,523	*								45,116

*  Inclusion of convertible notes in the computation of diluted earnings per share would be antidilutive.

3

UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED STATEMENT OF OPERATIONS

For the Nine Months Ended September 30, 2008

(In thousands, except per-share data)

				Pro Forma Adjustments
	As Reported			Sale of Specialty Pharmaceuticals		Other Adjustments			Pro Forma
Product sales, net	$	85,547		$	85,547	$	—		$	—
Royalties		44,346			1,837		—			42,509
Contract manufacturing		18,634			18,634		—			—
Contract research and development		—			—		2,577	(d)		2,577
Total revenues		148,527			106,018		2,577			45,086
Costs and expenses:
Cost of product sales and contract manufacturing		48,018			48,018		—			—
Research and development		42,489			11,678		2,577	(d)		33,388
Selling, general and administrative		52,121			40,437		18,364	(c)		30,048
Amortization of acquired intangible assets		500			500		—			—
Restructuring charge		2,392			2,392		—			—
Total costs and expenses		145,520			103,025		20,941			63,436
Operating income (loss)		3,007			2,993		(18,364	)		(18,350	)
Net other expense		(4,798	)		—		—			(4,798	)
Loss before income tax		(1,791	)		2,993		(18,364	)		(23,148	)
Income tax		458			239		—	(e)		219
Net loss	$	(2,249	)	$	2,754	$	(18,364	)	$	(23,367	)
Loss per common share:
Basic	$	(0.05	)						$	(0.53	)
Diluted	$	(0.05	)						$	(0.53	)
Weighted average shares outstanding:
Basic		44,328								44,328
Diluted		44,328								44,328

4

UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED STATEMENT OF OPERATIONS

For the Fiscal Year Ended December 31, 2008

(In thousands, except per-share data)

				Pro Forma Adjustments
	As Reported			Sale of Specialty Pharmaceuticals		Other Adjustments			Pro Forma
Product sales, net	$	113,789		$	113,789	$	—		$	—
Royalties		59,578			2,609		—			56,969
Contract manufacturing		23,571			23,571		—			—
Contract research and development		—			—		4,078	(d)		4,078
Total revenues		196,938			139,969		4,078			61,047
Costs and expenses:
Cost of product sales and contract manufacturing		61,702			61,702		—			—
Research and development		58,089			14,605		4,078	(d)		47,562
Selling, general and administrative		71,310			54,644		23,703	(c)		40,369
Amortization of acquired intangible assets		667			667		—			—
Restructuring charge		2,117			2,117		—			—
Total costs and expenses		193,885			133,735		27,781			87,931
Operating income (loss)		3,053			6,234		(23,703	)		(26,884	)
Net other expense		(5,464	)		—		—			(5,464	)
Loss before income tax		(2,411	)		6,234		(23,703	)		(32,348	)
Income tax		304			49		—	(e)		255
Net loss	$	(2,715	)	$	6,185	$	(23,703	)	$	(32,603	)
Loss per common share:
Basic	$	(0.06	)						$	(0.73	)
Diluted	$	(0.06	)						$	(0.73	)
Weighted average shares outstanding:
Basic		44,398								44,398
Diluted		44,398								44,398

5

UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED STATEMENT OF OPERATIONS

For the Fiscal Year Ended December 31, 2007

(In thousands, except per-share data)

				Pro Forma Adjustments
	As Reported			Sale of Specialty Pharmaceuticals			Other Adjustments			Pro Forma
Product sales, net	$	100,686		$	100,686		$	—		$	—
Royalties		67,305			2,144			—			65,161
Contract manufacturing		17,610			17,610			—			—
Contract research and development		—			—			3,995	(d)		3,995
Total revenues		185,601			120,440			3,995			69,156
Costs and expenses:
Cost of product sales and contract manufacturing		54,978			54,978			—			—
Research and development		54,624			9,102			3,995	(d)		49,517
Selling, general and administrative		65,723			55,536			23,237	(c)		33,424
Amortization of acquired intangible assets		707			707			—			—
Restructuring charge		7,741			7,741			—			—
Gain on sale of royalty interest		(88,666	)		—			—			(88,666	)
Total costs, expenses and gain		95,107			128,064			27,232			(5,725	)
Operating income		90,494			(7,624	)		(23,237	)		74,881
Net other expense		(5,508	)		—			—			(5,508	)
Income before income tax		84,986			(7,624	)		(23,237	)		69,373
Income tax		1,933			408			—	(e)		1,525
Net income	$	83,053		$	(8,032	)	$	(23,237	)	$	67,848
Earnings per common share:
Basic	$	1.89								$	1.54
Diluted	$	1.29								$	1.08
Weighted average shares outstanding:
Basic		43,927									43,927
Diluted		72,927									72,927

6

UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED STATEMENT OF OPERATIONS

For the Fiscal Year Ended December 31, 2006

(In thousands, except per-share data)

			Pro Forma Adjustments
	As Reported		Sale of Specialty Pharmaceuticals			Other Adjustments			Pro Forma
Product sales, net	$	101,024	$	101,024		$	—		$	—
Royalties		70,562		2,645			—			67,917
Contract manufacturing		14,067		14,067			—			—
Contract research and development		—		—			3,329	(d)		3,329
Total revenues		185,653		117,736			3,329			71,246
Costs and expenses:
Cost of product sales and contract manufacturing		50,121		50,121			—			—
Research and development		42,907		7,322			3,329	(d)		38,914
Selling, general and administrative		70,382		60,362			18,983	(c)		29,003
Amortization of acquired intangible assets		743		743			—			—
Acquired in-process research and development		11,000		—			—			11,000
Total costs and expenses		175,153		118,548			22,312			78,917
Operating income (loss)		10,500		(812	)		(18,983	)		(7,671	)
Net other income		11,567		—			—			11,567
Income before income tax (benefit)		22,067		(812	)		(18,983	)		3,896
Income tax (benefit)		758		175			—	(e)		583
Net income	$	21,309	$	(987	)	$	(18,983	)	$	3,313
Earnings per common share:
Basic	$	0.49							$	0.08
Diluted	$	0.46							$	0.08	*
Weighted average shares outstanding:
Basic		43,600								43,600
Diluted		61,379								43,600	*

*  Inclusion of convertible notes in the computation of diluted earnings per share would be antidilutive.

7

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

Pro forma information is intended to reflect the impact of the Asset Sale on Enzon’s historical financial position and results of operations through adjustments that are directly attributable to the Asset Sale, that are factually supportable and that are expected to have continuing impact. In order to accomplish this, Enzon eliminated the historical results of Specialty Pharmaceuticals from Enzon's historical financials. This represents the assets and liabilities that will be conveyed to the Purchasing Parties as a result of the Asset Sale. It also represents the results of operations of Enzon’s products and contract manufacturing segments as well as the research and development activities conducted by Enzon in support of Enzon's four U.S. Food and Drug Administration approved products: Oncaspar for the treatment of patients with acute lymphoblastic leukemia; Adagen for the treatment of severe combined immunodeficiency disease; Abelcet, an antifungal agent, and DepoCyt for treatment of lymphomatous meningitis (the "Products"). The Products were sold to the Purchasing Parties as part of the Asset Sale. Enzon further adjusted for (i) continuing research and development activities to be performed by Enzon on a contract basis and (ii) allocated general and administrative expenses.

These unaudited pro forma condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the pro forma results of operations and financial position.

In the preparation of the pro forma balance sheet as of September 30, 2009, the assumption was made that the assets were sold and liabilities were assumed by the Purchasing Parties pursuant to the Asset Purchase Agreement on September 30, 2009. The assumption made for purposes of the statements of operations was that the Asset Sale took place on January 1, 2006.

(a)	Reflects estimated proceeds to be received at the closing of sale of Specialty Pharmaceuticals. The sale price is $300.0 million. Transaction-related costs and expenses amounting to an estimated $7.5 million – $8.5 million will be offset against the proceeds in calculating the accounting gain. The unaudited condensed consolidated pro forma statements of operations do not reflect these expenses as they are nonrecurring in nature; however, these expenses will be reflected in Enzon's financial statements when the Asset Sale is consummated. Additionally, there is the potential for a working capital adjustment. Pursuant to the Asset Purchase Agreement, if the working capital balance at the time of closing exceeds the target amount of working capital as set forth in the Asset Purchase Agreement, then the purchase price will be adjusted upward in an amount equal to the excess, and if the working capital balance at the time of closing is less than the target amount, then the purchase price will be adjusted downward in an amount equal to the deficiency.
(b)	The excess of the net proceeds from the sale (the $300.0 million purchase price less transaction costs) over the net book value of the net assets being sold will be the overall measure of the gain to Enzon. The sale is expected to be accounted for in two parts: a sale of net assets of the discontinued operations and a sale of Enzon's in-process research and development related to ongoing development work on the Oncaspar and Adagen sourcing programs. The purchase price will be allocated between the net assets and the in-process research and development. At the closing of the Asset Sale, any excess of purchase price received by Enzon, less transaction expenses, over the book value of the assets sold will be recognized as a gain for financial accounting purposes. In subsequent reporting periods, Specialty Pharmaceuticals for current and prior periods, including the gain on the sale of the assets, will be presented as a discontinued operation for financial reporting purposes. The portion of the purchase price allocated to in-process research and development will be recognized in earnings from continuing operations as earned in future periods along with related milestone payments payable pursuant to the Asset Purchase Agreement, if any. While the final allocation of the sales price to the various components of the Asset Sale will not be completed until after the closing date, it is estimated that the amount that may be allocated to in-process research and development could approximate $40.0 million.
	The pro forma disclosures do not take into account the allocation of the sales price nor the timing of earnings recognition. Furthermore, no income taxes are assumed to be payable on the Asset Sale due to the underlying tax basis of the assets being sold and the availability of net operating loss carryforwards. The Asset Sale is expected to be subject to nominal amounts of Federal alternative minimum tax and state income tax.

8

NOTES TO UNAUDITED PRO FORMA CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(c)	The adjustment adds back the allocated corporate general and administrative expense that was included in the operating results of Specialty Pharmaceuticals. These expenses will continue to be recorded as an expense of the retained Enzon business in whole or in part. The actual effect on Enzon’s corporate overhead resulting from the Asset Sale cannot be objectively measured. The unaudited pro forma condensed consolidated financial statements do not reflect actions that may have been taken by management subsequent to the Asset Sale to reduce costs nor do they reflect the cost structure that will exist in the future.
(d)	As part of a transition services agreement with the Purchasing Parties, Enzon will continue to provide research and development services to Defiante Farmacêutica, S.A. Costs to be incurred will be reimbursed to Enzon and Enzon will receive a mark-up on those costs at percentages provided for in the transition services agreement. The amount of the mark-up cannot be reasonably estimated at this time. The duration of this contract research and development effort is anticipated to be between one and three years.
(e)	No income tax provisions have been made due either to current period operating losses or the utilization of deferred tax assets to offset taxes that would otherwise accrue to operating income.

The pro forma adjustments to the statements of operations do not include the following revenues, expenses and events:

· milestone payments related to research and development efforts that may be received in the event of achievement of certain regulatory approvals;

· royalty payments that Enzon would be entitled to receive upon the achievement of Product sales revenues through 2014 in excess of baseline sales levels as outlined in the Asset Purchase Agreement;

· expense related to the vesting of unvested and unrecognized stock options and nonvested shares upon the closing of the Asset Sale (the estimated amount of the accelerated vesting is approximately $1.5 million);

· expense related to the possible vesting of unvested and unrecognized stock options and nonvested shares held by Enzon’s executive officers under circumstances to be agreed upon by Enzon and such executive officers (the estimated amount of the possible accelerated vesting for such executive officers is approximately $4.6 million); and

· potential uses of net proceeds from the Asset Sale, including repurchase of $0 to $250 million of Enzon's 4% Convertible Senior Notes due 2013.

9