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ENZN Enzon Pharmaceuticals

Document and Entity Information

Document and Entity Information - shares3 Months Ended
Mar. 31, 2021Apr. 23, 2021
Document and Entity Information
Document Type10-Q
Amendment Flagfalse
Document Period End DateMar. 31,
2021
Document Fiscal Year Focus2021
Document Fiscal Period FocusQ1
Entity Registrant NameENZON PHARMACEUTICALS, INC.
Entity Central Index Key0000727510
Current Fiscal Year End Date--12-31
Entity Current Reporting StatusYes
Entity Filer CategoryNon-accelerated Filer
Trading SymbolENZN
Entity Common Stock, Shares Outstanding74,214,603
Entity Shell Companyfalse
Entity Emerging Growth Companyfalse
Entity Small Businesstrue
Entity Interactive Data CurrentYes

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Current assets:
Cash and cash equivalents $ 48,187 $ 48,142
Royalty and milestone receivable65 31
Other current assets40 59
Total current assets48,292 48,232
Total assets48,292 48,232
Current liabilities:
Accounts payable329 302
Accrued expenses and other current liabilities132 110
Total current liabilities461 412
Commitments and contingencies
Stockholders' equity:
Preferred stock - $0.01 par value, authorized 2,960,000 shares; no shares issued and outstanding at March 31, 2021 and December 31, 20200 0
Common stock - $0.01 par value, authorized 170,000,000 shares; issued and outstanding 74,214,603 shares at March 31, 2021 and December 31, 2020742 742
Additional paid-in capital77,500 78,006
Accumulated deficit(71,377)(71,388)
Total stockholders' equity6,865 7,360
Total liabilities, mezzanine equity and stockholders' equity48,292 48,232
Series C Preferred Stock
Mezzanine equity:
Series C preferred stock - $0.01 par value, 40,000 shares authorized, issued and outstanding (liquidation value $1,024 and $1,012 per share) at March 31, 2021 and December 31, 202040,966 40,460
Stockholders' equity:
Total stockholders' equity $ 40,966 $ 40,460

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)Mar. 31, 2021Dec. 31, 2020
MEZZANINE EQUITY
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized2,960,000 2,960,000
Preferred stock, shares issued0 0
Preferred stock, shares outstanding0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized170,000,000 170,000,000
Common stock, shares issued74,214,603 74,214,603
Common stock, shares outstanding74,214,603 74,214,603
Series C Preferred Stock
MEZZANINE EQUITY
Preferred Shares, par value $ 0.01 $ 0.01
Preferred Shares, shares authorized40,000 40,000
Preferred Shares, shares issued40,000 40,000
Preferred Shares, shares outstanding40,000 40,000
Preferred Shares, liquidation value $ 1,024 $ 1,012

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Revenues:
Royalties and milestones, net $ 381 $ 2
Total revenues381 2
Operating expenses:
General and administrative370 242
Total operating expenses370 242
Operating income (loss)11 (240)
Other income2 0
Income (loss) before income tax expense13 (240)
Income tax expense2 2
Net income (loss)11 (242)
Dividends on Series C preferred stock(506)0
Net loss available to common shareholders $ (495) $ (242)
Loss per common share
Basic and diluted loss per share $ (0.01) $ (0.01)
Weighted Average Number of Shares Outstanding, Basic and Diluted74,215 44,215

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY - USD ($)Series C Preferred StockCommon StockAdditional Paid-in CapitalAccumulated DeficitTotal
Balance at Dec. 31, 2019 $ 442,000 $ 75,690,000 $ (70,077,000) $ 6,055,000
Balance (in shares) at Dec. 31, 201944,215
Net loss $ 0 $ 0 0 (242,000)(242,000)
Balance at Mar. 31, 2020 $ 442,000 75,690,000 (70,319,000)5,813,000
Balance (in shares) at Mar. 31, 202044,215
Balance at Dec. 31, 2020 $ 40,460,000 $ 742,000 78,006,000 (71,388,000)7,360,000
Balance (in shares) at Dec. 31, 202040 74,215
Net loss $ 0 $ 0 0 11,000 11,000
Preferred stock dividend accumulation(506,000)(506,000)(506,000)
Balance at Mar. 31, 2021 $ 40,966,000 $ 742,000 $ 77,500,000 $ (71,377,000) $ 6,865,000
Balance (in shares) at Mar. 31, 202140 74,215

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Cash flows from operating activities:
Net income (loss) $ 11 $ (242)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Changes in operating assets and liabilities34 (60)
Net cash provided by (used in) operating activities45 (302)
Net increase (decrease) in cash45 (302)
Cash beginning of period48,142 5,446
Cash end of period $ 48,187 $ 5,144

Description of Business

Description of Business3 Months Ended
Mar. 31, 2021
Description of Business
Description of Business(1) Description of Business
Enzon Pharmaceuticals, Inc. (together with its subsidiaries, the “Company,” “Enzon,” “we” or “us”) is positioned as a public company acquisition vehicle, where it can become an acquisition platform and more fully utilize its net operating loss carryforwards (“NOLs”) and enhance stockholder value.
In September 2020, the Company initiated a rights offering for its common and preferred stock (see below and Note 12 to our Condensed Consolidated Financial Statements), which closed in October 2020, and it realized $43.6 million in gross proceeds. This has enabled the Company to embark on its plan to realize the value of its approximately $103 million net operating loss carryforwards (“NOLs”) by acquiring potentially profitable businesses or assets. To protect the NOLs, in August 2020, the Company’s Board of Directors adopted a Section 382 rights plan (see Note 11 to our Condensed Consolidated Financial Statements).
Historically, the Company had received royalty revenues from licensing arrangements with other companies primarily related to sales of certain drug products that utilized Enzon's proprietary technology. In recent years, the Company has had no clinical operations and limited corporate operations. Enzon has a marketing agreement relating to the drug Vicineum, which, if approved, will, potentially, generate milestone and royalty payments to it in the future. Enzon cannot assure you that it will earn material future royalties or milestones.
The Company has a marketing agreement with Micromet AG, now part of Amgen, Inc. (the “Micromet Agreement”), pursuant to which the Company may be entitled to a share of certain milestone and royalty payments if Vicineum, a drug being developed by Sesen Bio, Inc. (“Sesen”), is approved for the treatment of non-muscle invasive bladder cancer. In a press release dated February 16, 2021, Sesen announced that the U.S. Food and Drug Administration (the “FDA”) has accepted for filing Sesen’s Biologic License Application (“BLA”) for Vicineum. The FDA further granted Priority Review, with a target Prescription Drug User Fee Act (“PDUFA”) date for a decision on the BLA of August 18, 2021. Accordingly, the Company earned a milestone of $409,430 in the first quarter of 2021. The amount of $344,638 was received during that quarter and the balance of $64,792 was recorded as a receivable as of March 31, 2021. In a filing with the U. S. Securities and Exchange Commission (“SEC”) in March 2021, Sesen noted that it had received notice from the European Medicines Agency (“EMA”) that its Marketing Authorization Application (“MMA”) for Vicineum was found to be valid and the review procedure has officially started. Due to the challenges associated with developing and obtaining approval for drug products, and the lack of involvement by the Company in the development and approval process, there is substantial uncertainty as to whether the Company will receive additional milestone or any royalty payments under the Micromet Agreement. The Company will not recognize revenue until all revenue recognition requirements are met.
The Company maintains its principal executive offices at 20 Commerce Drive, Suite 135, Cranford, New Jersey 07016.

Basis of Presentation

Basis of Presentation3 Months Ended
Mar. 31, 2021
Basis of Presentation
Basis of Presentation(2) Basis of Presentation
Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared from the books and records of the Company in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and Rule 10‑01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, these financial statements do not include all of the information and footnotes required for complete annual financial statements. Interim results are not necessarily indicative of the results that may be expected for the full year. Interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2020.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated as part of the consolidation.
Use of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include legal and contractual contingencies and income taxes. Although management bases its estimates on historical experience, relevant current information and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ from these estimates.
Revenue Recognition
Royalty revenues from the Company’s agreements with third parties are recognized when the Company can reasonably determine the amounts earned. In most cases, this will be upon notification from the third-party licensee, which is typically during the quarter following the quarter in which the sales occurred. The Company does not participate in the selling or marketing of products for which it receives royalties. No provision for uncollectible accounts is established upon recognition of revenues.
Contingent payments due under the asset purchase agreement for the sale of the Company’s former specialty pharmaceutical business are recognized as revenue when the milestone has been achieved and collection is assured, such payments are non-refundable and no further effort is required on the part of the Company or the other party to complete the earning process.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized. The effect of a change in tax rates or laws on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date of the rate change. A valuation allowance is established to reduce the deferred tax assets to the amounts that are more likely than not to be realized from operations.
Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions. Interest and penalties, if any, related to unrecognized tax benefits, would be recognized as income tax expense.

Recent Accounting Pronouncement

Recent Accounting Pronouncements3 Months Ended
Mar. 31, 2021
Recent Accounting Pronouncements
Recent Accounting Pronouncements(3) Recent Accounting Pronouncements
Recent Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”) and guidance issued by the SEC did not, or are not believed by management to, have a material effect on the Company’s present or future Condensed Consolidated Financial Statements.

Financial Instruments and Fair

Financial Instruments and Fair Value3 Months Ended
Mar. 31, 2021
Financial Instruments and Fair Value
Financial Instruments and Fair Value(4) Financial Instruments and Fair Value
The carrying values of cash and cash equivalents, royalty receivable, other current assets, accounts payable, accrued expenses and other current liabilities in the Company’s consolidated balance sheets approximated their fair values at March 31, 2021 and 2020 due to their short-term nature. As of March 31, 2021 and December 31, 2020, the Company held cash equivalents aggregating approximately $43.6 million.

Supplemental Cash Flow Informat

Supplemental Cash Flow Information3 Months Ended
Mar. 31, 2021
Supplemental Cash Flow Information
Supplemental Cash Flow Information(5) Supplemental Cash Flow Information
The Company made no income tax payments during the three months ended March 31, 2021 and 2020, respectively. There were no interest payments made during the three months ended March 31, 2021 or 2020.

Income (Loss) Per Common Share

Income (Loss) Per Common Share3 Months Ended
Mar. 31, 2021
Income (Loss) Per Common Share
Income (Loss) Per Common Share(6) Income (Loss) Per Common Share
Basic income (loss) per common share is computed by dividing the net income (loss), less any dividends, accretion or reduction or redemption on our Series C Preferred Stock, by the weighted average number of shares of common stock outstanding during the period. Restricted stock awards and restricted stock units (collectively, “nonvested shares”) are not considered to be outstanding shares until the service or performance vesting period has been completed.
For purposes of calculating diluted earnings per common share, the denominator normally includes both the weighted-average number of shares of common stock outstanding and the number of common stock equivalents if the inclusion of such common stock equivalents is dilutive. Because a loss was incurred in each of the quarters ended March 31, 2021 and 2020, common stock equivalents would be anti-dilutive and, accordingly, were excluded from the calculation of diluted loss per share in each of the periods. Dilutive common stock equivalents potentially include stock options and nonvested shares using the treasury stock method and shares issuable under the employee stock purchase plan. During each of the three-month periods ended March 31, 2021 and 2020, there were no common stock equivalents. Loss per common share information is as follows (in thousands, except per share amounts) for the three months ended March 31, 2021 and 2020:
Three months ended
March 31,
2021
2020
Income (Loss) Per Common Share – Basic and Diluted:
Net income (loss)
$
11
$
(242)
Dividends on Series C preferred stock
$
(506)
$

Net loss available to common shareholders
$
(495)
$
(242)
Weighted-average common shares outstanding
74,215
44,215
Basic and diluted loss per share
$
(0.01)
$
(0.01)
At March 31, 2021 and 2020, options for 25,000 and 41,787 shares, respectively, were outstanding that have been excluded from the calculation of diluted weighted-average number of shares outstanding, as they would be anti-dilutive, since the respective options’ strike price was greater than the market price of the respective shares.

Stock Based Compensation

Stock Based Compensation3 Months Ended
Mar. 31, 2021
Stock Based Compensation
Stock Based Compensation(7) Stock Based Compensation
Stock Options and Restricted Stock Units (RSUs or Nonvested Shares)
During the quarter ended March 31, 2021 no options were granted and the Company incurred no stock-based compensation expense. No RSUs were granted during the three months ended, or outstanding as of, March 31, 2021.
There were no options granted during the three months ended March 31, 2020 and no RSUs were granted during, or outstanding as of, the three months ended March 31, 2020. The Company uses historical data to estimate forfeiture rates.
Activity related to stock options and nonvested shares during the three months ended March 31, 2021 and related balances outstanding as of that date are reflected below:
Stock Options
Outstanding at January 1, 2021
25,000
Granted

Exercised and vested

Expired and forfeited

Outstanding at March 31, 2021
25,000
Options vested and expected to vest at March 31, 2021
25,000
Options exercisable at March 31, 2021
25,000

Income Taxes

Income Taxes3 Months Ended
Mar. 31, 2021
Income Taxes
Income Taxes(8) Income Taxes
During each of the three-month periods ended March 31, 2021 and 2020, the Company recorded approximately $2,000 of income tax expense for New Jersey state income tax.
ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For the period ended December 31, 2020, the Company believed that it was more likely than not that future taxable income would not exist to utilize some or all of its deferred tax assets. However, although there can be no certainty of such, if the Company’s acquisition strategy is successful and future taxable income is projected, among other things, the valuation allowance will be reevaluated. Accordingly, it recorded a valuation allowance in the amount of its total deferred tax assets for the period ended December 31, 2020. In 2021, the Company projects a taxable loss before utilization of NOLs. Due to the valuation allowance placed on its deferred tax assets, the deferred tax expense resulting from the usage and/or expiration of deferred tax assets was offset by a corresponding deferred tax benefit from a reduction in valuation allowance, and the Company recorded no deferred tax expense as of March 31, 2021. The Company intends to acquire profitable businesses, entities or revenue streams that will generate sufficient income so that it can utilize its approximately $103 million NOLs. To date, no actionable acquisition candidates have been identified and, while the Company expects that, ultimately, it will be successful in realizing the value of its NOLs, the Company cannot provide assurance that it will be able to do so.
Management of the Company will continue to assess the need for this valuation allowance and will make adjustments when or if appropriate.
At March 31, 2021, the Company had federal NOLs of approximately $103 million, of which approximately $100.6 million will expire in the years 2025 through 2036, and New Jersey state NOLs of approximately $25.8 million that expire in the years 2031 through 2041. Under the Tax Cuts and Jobs Act, net operating losses generated in tax years beginning after December 31, 2017 have an unlimited carryforward period, and the amount of net operating loss allowed to be utilized each year is limited to 80% of taxable income. The Coronavirus Aid, Relief and Economic Security Act, which was signed into law on March 27, 2020, suspended the 80% limitation for taxable years 2018 through 2020 and provided for a five-year carryback period for net operating losses for those years. Net operating losses generated in 2017 and earlier continue to be carried forward for 20 years and have no 80% limitation on utilization.

Commitments and Contingent Liab

Commitments and Contingent Liabilities3 Months Ended
Mar. 31, 2021
Commitments and Contingent Liabilities
Commitments and Contingent Liabilities(9) Commitments and Contingent Liabilities
In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) was reported in Wuhan, China. On March 11, 2020, the World Health Organization characterized the global spread of COVID-19 as a pandemic. In an effort to slow the spread of the virus, the United States and many other countries around the world imposed restrictions on non-essential work activities, travel and mass gatherings. Although these restrictions have been eased in some areas, it is not known whether these lockdowns and other restrictions will be reintroduced, especially in light of the uncertainty regarding cases in the United States, when they will end or the ultimate impact these unprecedented actions will have on the Company’s financial condition and prospects. At the present time, the Company’s business activities have been largely unaffected by COVID-19 restrictions as the Company’s workforce is comprised solely of independent contractors who are able to perform their duties remotely. However, these restrictions may impact the third parties who are responsible for obtaining final approval of and manufacturing product candidates for which the Company shares the right to receive licensing fees, milestone payments and royalty revenues. If those third parties are required to curtail their business activities for a significant time, or if global supply chain disruptions impact their ability to procure needed resources, raw materials or components, the Company’s right to receive licensing fees, milestone payments or royalties could be materially and adversely affected. Additionally, the development timeline for product candidates being developed by third parties that are pending FDA or other regulatory approval could be delayed if the agency is required to shift resources to the review and approval of candidates for treatment of COVID-19. In addition, the effects of the COVID-19 pandemic, including the current global challenges, may negatively impact the Company’s search for a business acquisition or investment, as well as negatively impacting the business and/or results of operations of any target business which the Company acquires or in which it invests.
The Company has been involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material effect on the Company’s consolidated financial position, results of operations, or liquidity.

Accounts Payable

Accounts Payable3 Months Ended
Mar. 31, 2021
Accounts Payable
Accounts Payable(10) Accounts Payable
Due to returns, rebates and other adjustments, at various times, Merck has notified the Company of its expected repayment of previously paid royalties. As of December 31, 2020, according to Merck, the Company had a net liability to Merck (net of a 25% royalty interest that the Company had previously sold) aggregating approximately $302,000. This was based on Merck’s assertions regarding the net result of overpayments, rebates and returns related to prior periods sales of PegIntron. Merck expected to be repaid for such overpayments through reductions of future royalties earned by the Company. During the three months ended March 31, 2021, Merck notified the Company of an additional amount they believe is owed to them approximating $27,000. Accordingly, at March 31, 2021, the Company recorded a net payable to Merck of approximately $329,000 due to such royalty overpayment claims by Merck. The Company believes that it will receive no additional royalties from Merck.

Section 382 Rights Plan

Section 382 Rights Plan3 Months Ended
Mar. 31, 2021
Section 382 Rights Plan
Section 382 Rights Plan(11) Section 382 Rights Plan
On August 14, 2020, in an effort to protect stockholder value by attempting to protect against a possible limitation on the Company’s ability to use its NOLs, the Company’s Board of Directors adopted a Section 382 rights plan and declared a dividend distribution of one right for each outstanding share of the Company’s common stock to stockholders of record at the close of business on August 24, 2020. Accordingly, holders of the Company’s common stock own one preferred stock purchase right for each share of common stock owned by such holder. The rights are not immediately exercisable and will become exercisable only upon the occurrence of certain events as set forth in the Section 382 rights plan. If the rights become exercisable, each right would initially represent the right to purchase from the Company one one-thousandth of a share of the Company’s Series A-1 Junior Participating Preferred Stock, par value $0.01 per share, for a purchase price of $1.20 per right. If issued, each fractional share of Series A-1 Junior Participating Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of the Company’s common stock. However, prior to exercise, a right does not give its holder any rights as a stockholder of the Company, including any dividend, voting or liquidation rights. The rights will expire on the earliest of (i) the close of business on August 13, 2021 (unless that date is advanced or extended by the Board), (ii) the time at which the rights are redeemed or exchanged under the Section 382 rights plan, (iii) the close of business on the day of repeal of Section 382 of the Internal Revenue Code or any successor statute or (iv) the close of business on the first day of a taxable year of the Company to which the Company’s Board of Directors determines that no NOLs may be carried forward. The Company is seeking stockholder ratification of the Section 382 rights plan at the Company’s 2021 annual meeting scheduled for June 2, 2021.

Rights Offering

Rights Offering3 Months Ended
Mar. 31, 2021
Rights Offering
Rights Offering(12) Rights Offering
In September 2020, the Company’s Board of Directors approved a Rights Offering (the “Rights Offering”), by which the Company distributed, at no charge to all holders of its common stock on September 23, 2020 (the “Record Date”), transferable subscription rights to purchase units (“Units”) at a subscription price per Unit of $1,090. In the Rights Offering, each stockholder on the Record Date received one subscription right for every share of common stock owned on the Record Date. For every 1,105 subscription rights held, a stockholder was entitled to purchase one Unit at the subscription price. Each Unit consisted of one share of newly designated Series C Preferred Stock, par value $0.01 per share, and 750 shares of the Company’s common stock. The subscription period for the Rights Offering ended on October 9, 2020.
As a result of the sale of all 40,000 Units available for purchase in the Rights Offering, the Company received approximately $43.6 million of gross proceeds and had 40,000 shares of Series C Preferred Stock outstanding and an aggregate of 74,214,603 shares of common stock outstanding following the Rights Offering.
Pursuant to the Rights Offering, Icahn Capital LP, together with its affiliates, subscribed for 5,971 Units (its pro-rata share of the Rights Offering) representing the purchase of 4,478,250 shares of the Company’s common stock and 5,971 shares of Series C Preferred Stock. Icahn Capital LP also purchased all Units that remained unsubscribed for at the expiration of the Rights Offering to the extent that other holders elected not to exercise all of their respective subscription rights, which totaled 33,306 Units representing the purchase of 24,979,500 shares of common stock and 33,306 shares of Series C Preferred Stock. Following the completion of the Rights Offering, Icahn Capital LP, together with its affiliates, owned approximately 48% of the Company’s outstanding common stock and approximately 98% of the Company’s outstanding Series C Preferred Stock.

Series C Preferred Stock

Series C Preferred Stock3 Months Ended
Mar. 31, 2021
Series C Preferred Stock
Series C Preferred Stock(13) Series C Preferred Stock
In October 2020, the Company issued 40,000 shares of Series C Preferred Stock for an aggregate purchase price of $40.0 million.
On December 31st of each year, the Company’s Board of Directors may, at its sole discretion, cause a dividend with respect to the Series C Preferred Stock to be paid in cash to the holders in an amount equal to 3% of the liquidation preference as in effect at such time (initially $1,000 per share). If the dividend is not so paid in cash, the liquidation preference will be adjusted and increased annually by an amount equal to 5% of the liquidation preference per share as in effect at such time, that is not paid in cash to the holders on such date. The Company’s Board of Directors did not declare a dividend as of December 31, 2020 or subsequently. Accordingly, dividends on the Series C Preferred Stock were accrued at 5% at December 31, 2020, aggregating approximately $460,000. Accordingly, as of December 31, 2020, the cumulative liquidation value of the Series C Preferred Stock was approximately $40,460,000 ($1,012 per share).
As of March 31, 2021, pursuant to the terms of the Series C Preferred Stock, the Company’s Board of Directors had not declared a cash dividend on the Series C Preferred Stock as dividends on such stock are only declared and paid once a year on or about December 31st of each year. As of March 31, 2021, the Board had not yet determined whether to declare a cash dividend at the end of 2021. Since a determination has not been made, the Company has recorded a 5% increase (computed on a pro rata basis) to the liquidation preference of approximately $12 per share of Series C Preferred Stock, aggregating approximately $506,000, for a cumulative liquidation value of approximately $40,966,000 ($1,024 per share) as of March 31, 2021. Unless and until an amount in cash is paid to the holders of the Series C Preferred Stock in an amount equal to the difference between the initial liquidation value ($1,000 per share) and the then-current liquidation value, no dividends may be paid to holders of the Company’s common stock.
The Company may not repurchase or redeem the Series C Preferred Stock prior to November 1, 2022. Since the redemption of the Series C Preferred Stock is contingently or optionally redeemable, the Series C Preferred Stock has been classified in mezzanine equity on the Consolidated Balance Sheets.

Basis of Presentation (Policies

Basis of Presentation (Policies)3 Months Ended
Mar. 31, 2021
Basis of Presentation
Interim Financial StatementsInterim Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared from the books and records of the Company in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and Rule 10‑01 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, these financial statements do not include all of the information and footnotes required for complete annual financial statements. Interim results are not necessarily indicative of the results that may be expected for the full year. Interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2020.
Principles of ConsolidationPrinciples of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated as part of the consolidation.
Use of EstimatesUse of Estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include legal and contractual contingencies and income taxes. Although management bases its estimates on historical experience, relevant current information and various other assumptions that are believed to be reasonable under the circumstances, actual results could differ from these estimates.
Revenue RecognitionRevenue Recognition
Royalty revenues from the Company’s agreements with third parties are recognized when the Company can reasonably determine the amounts earned. In most cases, this will be upon notification from the third-party licensee, which is typically during the quarter following the quarter in which the sales occurred. The Company does not participate in the selling or marketing of products for which it receives royalties. No provision for uncollectible accounts is established upon recognition of revenues.
Contingent payments due under the asset purchase agreement for the sale of the Company’s former specialty pharmaceutical business are recognized as revenue when the milestone has been achieved and collection is assured, such payments are non-refundable and no further effort is required on the part of the Company or the other party to complete the earning process.
Income TaxesIncome Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized. The effect of a change in tax rates or laws on deferred tax assets and liabilities is recognized in operations in the period that includes the enactment date of the rate change. A valuation allowance is established to reduce the deferred tax assets to the amounts that are more likely than not to be realized from operations.
Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions. Interest and penalties, if any, related to unrecognized tax benefits, would be recognized as income tax expense.

Income (Loss) Per Common Share

Income (Loss) Per Common Share (Tables)3 Months Ended
Mar. 31, 2021
Income (Loss) Per Common Share
Schedule of loss per common share information, basic and dilutedThree months ended
March 31,
2021
2020
Income (Loss) Per Common Share – Basic and Diluted:
Net income (loss)
$
11
$
(242)
Dividends on Series C preferred stock
$
(506)
$

Net loss available to common shareholders
$
(495)
$
(242)
Weighted-average common shares outstanding
74,215
44,215
Basic and diluted loss per share
$
(0.01)
$
(0.01)

Stock Based Compensation (Table

Stock Based Compensation (Tables)3 Months Ended
Mar. 31, 2021
Stock Based Compensation
Schedule of share-based compensation stock options activityActivity related to stock options and nonvested shares during the three months ended March 31, 2021 and related balances outstanding as of that date are reflected below:
Stock Options
Outstanding at January 1, 2021
25,000
Granted

Exercised and vested

Expired and forfeited

Outstanding at March 31, 2021
25,000
Options vested and expected to vest at March 31, 2021
25,000
Options exercisable at March 31, 2021
25,000

Description of Business (Detail

Description of Business (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Oct. 31, 2020
Description of Business [Line Items]
Amount of operating loss carry forward $ 103,000 $ 103,000
Milestone Revenue409,430
Milestones Received344,638
Milestones receivable64,792
Rights Offering
Description of Business [Line Items]
Rights Offering and realized in gross proceeds $ 43,600

Basis of Presentation (Details)

Basis of Presentation (Details) $ in Thousands3 Months Ended
Mar. 31, 2021USD ($)
Basis of Presentation
Provision for uncollectible accounts $ 0
Liability for uncertain tax positions $ 0

Financial Instruments and Fai_2

Financial Instruments and Fair Value (Details) $ in MillionsMar. 31, 2021USD ($)
Financial Instruments and Fair Value
Cash Equivalents, at Carrying Value $ 43.6

Supplemental Cash Flow Inform_2

Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Supplemental Cash Flow Information
Interest Paid, Net $ 0 $ 0

Income (Loss) Per Common Shar_2

Income (Loss) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Income (Loss) Per Common Share - Basic and Diluted:
Net income (loss) $ 11 $ (242)
Dividends on Series C preferred stock(506)0
Net loss available to common shareholders $ (495) $ (242)
Weighted-average common shares outstanding74,215 44,215
Basic and diluted loss per share $ (0.01) $ (0.01)
Antidilutive securities25,000 41,787

Stock Based Compensation (Detai

Stock Based Compensation (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Stock Based Compensation
Nonvested shares outstanding0 0
Nonvested shares granted0 0
Stock-based compensation expense $ 0
Outstanding at January 1, 202125,000
Granted0 0
Exercised and vested0
Expired and forfeited0
Outstanding at March 31, 202125,000
Options vested and expected to vest at March 31, 202125,000
Options exercisable at March 31, 202125,000

Income Taxes (Details)

Income Taxes (Details) $ in Thousands3 Months Ended
Mar. 31, 2021USD ($)Mar. 31, 2020USD ($)Oct. 31, 2020USD ($)
Income Taxes [Line Items]
Liability for uncertain tax positions $ 0
Income Tax Expense (Benefit) $ 2 $ 2
Operating Loss Carryforwards, Limitation on Annual Utilization80
Operating Loss Carryforwards $ 103,000 $ 103,000
Net Operating Loss Carry-Forwards Limitation On Annual Utilization $ 103,000
Operating Loss Carryforwards, Year20 years
Tax Credit Carryforward, Limitations on Usenet operating losses generated in tax years beginning after December 31, 2017 have an unlimited carryforward period, and the amount of net operating loss allowed to be utilized each year is limited to 80% of taxable income.
New jersey State [Member]
Income Taxes [Line Items]
Income Tax Expense (Benefit) $ 2,000 $ 2,000
NJ State [Member]
Income Taxes [Line Items]
Operating Loss Carryforwards25,800
Domestic Tax Authority [Member]
Income Taxes [Line Items]
Operating Loss Carryforwards $ 100,600

Accounts Payable (Details)

Accounts Payable (Details) - Merck [Member] - USD ($)Mar. 31, 2021Dec. 31, 2020
Accounts Payable [Line Items]
Net of royalty interest, percentage25.00%
Accrued royalties $ 302,000
Accrued royalties, current $ 27,000
Due to related parties, total $ 329,000

Section 382 Rights Plan (Detail

Section 382 Rights Plan (Details)Aug. 14, 2020Vote$ / sharessharesMar. 31, 2021$ / sharesDec. 31, 2020$ / shares
Preferred stock, par value (in dollars per share) | $ / shares $ 0.01 $ 0.01
Section 382 Rights Plan
Rights per share distributed as dividend | shares1
Number of preferred stock purchase right for each common stockholder | shares1
Section 382 Rights Plan | Series A-1 Junior Participating Preferred Stock
Number of preferred stock eligible for each warrant become exercisable | shares1
Preferred stock, par value (in dollars per share) | $ / shares $ 0.01
Purchase price per right | $ / shares $ 1.20
Number of votes for fractional share | Vote1

Rights Offering (Details)

Rights Offering (Details) - USD ($)Oct. 09, 2020Sep. 30, 2020Mar. 31, 2021Dec. 31, 2020
Class of Warrant or Right [Line Items]
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Number of preferred shares outstanding0 0
Common stock, shares outstanding74,214,603 74,214,603
Series C Preferred Stock
Class of Warrant or Right [Line Items]
Liquidation preference per share of preferred stock $ 12 $ 1,012
Rights Offering
Class of Warrant or Right [Line Items]
Subscription price per unit of a right $ 1,090
Number of preferred stock eligible for each warrant become exercisable1
Number of subscription rights to be held for purchase of a unit1,105
Number of units entitled for 1,105 subscription rights held1
Rights Offering | Series C Preferred Stock
Class of Warrant or Right [Line Items]
Preferred stock, par value (in dollars per share) $ 0.01
Number of common shares for unit750
Percentage of dividend on liquidation preference to be paid in cash3.00%
Liquidation preference per share of preferred stock1,024 $ 1,000
Annual increase in percentage of the liquidation preference per share, if dividend not paid in cash5.00%
Rights Offering | Icahn Capital LP
Class of Warrant or Right [Line Items]
Subscription price per unit of a right $ 5,971
Rights Offering | Icahn Capital LP | Series C Preferred Stock
Class of Warrant or Right [Line Items]
Number of common shares for unit33,306
Number of units sold that remains unsubscribed24,979,500
Number of units sold33,306
Number of preferred shares outstanding4,478,250
Common stock, shares outstanding5,971
Affiliates own48.00%
Maximum percentage of common outstanding98.00%
Rights Offering | Investment Agreement | Icahn Capital LP | Series C Preferred Stock
Class of Warrant or Right [Line Items]
Number of units sold40,000
Number of preferred shares outstanding40,000
Common stock, shares outstanding74,214,603
Issued and gross proceeds $ 43.6

Series C Preferred Stock - Addi

Series C Preferred Stock - Additional Information (Details) - Series C Preferred Stock - USD ($)1 Months Ended3 Months Ended12 Months Ended
Dec. 31, 2020Oct. 31, 2020Mar. 31, 2021Dec. 31, 2020
Stock Issued During Period, Shares, New Issues40,000
Stock Issued During Period, Value, New Issues $ 40,000,000
Preferred Stock, Liquidation Preference Percent5.00%5.00%
Preferred Stock, Liquidation Preference, Value $ 506,000
Preferred Stock Cumulative Liquidation Value $ 40,460,000 $ 40,966,000 $ 40,460,000
Preferred Stock, Liquidation Preference Per Share $ 1,012 $ 12 $ 1,012
Rights Offering
Preferred Stock, Liquidation Preference, Value $ 460,000,000 $ 460,000,000
Percentage of Dividend on Liquidation Preference3.00%
Preferred Stock, Liquidation Preference Per Share $ 1,000 1,024 $ 1,000
Annual Increase in Percentage of the Liquidation Preference Per Share, If Dividend Not Paid in Cash5.00%
Preferred stock initial liquidation value $ 1,000
Preferred stock dividends on liquidation value $ 0