10-K: Enzon Pharmaceuticals Reports 2025 Loss Amid Viskase Merger

Enzon Pharmaceuticals, Inc. reported a net loss of $3.4 million for 2025, driven by merger-related expenses, as it progresses with its acquisition by Viskase Companies, Inc.

Summary

• Enzon Pharmaceuticals, Inc. (Enzon) is operating as a public company acquisition vehicle, with limited historical operations and no clinical activities for over ten years.
• The company entered into an Agreement and Plan of Merger with Viskase Companies, Inc. (Viskase) on June 20, 2025, amended on October 24, 2025.
• Upon merger completion, Enzon will change its name to Viskase Holdings, Inc., and Viskase will become a wholly-owned subsidiary.
• Pre-closing Enzon stockholders are anticipated to hold 45% of the combined company's common stock, while Viskase stockholders will hold 55%.
• Carl C. Icahn and his affiliates are expected to beneficially own approximately 93.32% of the outstanding shares of the combined company post-merger.
• Stockholders approved a 1-for-100 Reverse Stock Split and the Merger Proposal on February 11, 2026.
• A Series C Exchange Offer, allowing holders of Series C Preferred Stock to exchange for common stock, commenced on January 30, 2026, and is set to expire on March 9, 2026.
• Enzon reported a net loss of $3.409 million for the year ended December 31, 2025, compared to a net income of $0.778 million in 2024.
• Operating loss significantly increased to $5.311 million in 2025 from $1.327 million in 2024, primarily due to $3.955 million in transaction expenses related to the merger.
• Royalty and milestone revenues were $0 in 2025, down from $26,000 in 2024, as previous licenses were canceled and patents expired.
• Interest and dividend income decreased by 22% to $1.921 million in 2025 from $2.452 million in 2024, due to lower interest rates and smaller cash balances.
• The liquidation preference of Series C Preferred Stock increased by 5% (approximately $2.124 million or $53.10 per share) in 2025, as cash dividends were prohibited by the merger agreement.
• The company maintains a full valuation allowance on its deferred tax assets of approximately $29.7 million as of December 31, 2025.
• Enzon's common stock was delisted from OTCQX to OTCQB on August 12, 2025, due to its bid price falling below $0.10 per share for 30 consecutive days.
• The company has no employees, with its executive officer providing services on a consulting basis.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing with cautious optimism. While the merger with Viskase is progressing with key approvals, the significant net loss, zero revenue, and the target company's recent underperformance introduce considerable uncertainty and risk for the combined entity.

Positives

• Stockholders approved the Reverse Stock Split Proposal and the Merger Proposal on February 11, 2026, indicating progress towards the Viskase merger.
• The company expects to have sufficient cash on hand to fund operations through at least March 2027 if the merger is not consummated, providing short-term liquidity.
• Management believes that the utilization of Enzon's Net Operating Loss carryforwards (NOLs) should not be subject to an annual limitation under Section 382 of the Code due to the merger, although this is not assured.

Negatives

• Enzon reported a net loss of $3.409 million in 2025, a significant decline from a net income of $0.778 million in 2024.
• Royalty and milestone revenues dropped to $0 in 2025 from $26,000 in 2024, indicating a complete cessation of historical revenue streams.
• Transaction expenses related to the Viskase merger amounted to $3.955 million in 2025, contributing significantly to the operating loss.
• Interest and dividend income decreased by 22% in 2025, reflecting lower interest rates and reduced cash balances.
• The company's common stock was delisted from the OTCQX to the OTCQB market due to a sustained low bid price, indicating reduced market standing and liquidity.
• The Series C Preferred Stock liquidation preference increased by 5% in 2025 due to the prohibition of cash dividends under the merger agreement, increasing future obligations.
• Viskase's operating performance and financial condition have recently deteriorated due to underperformance, personnel changes, and paused capital investment in a product line, which could negatively impact the combined company.

Risks

• The interests of significant stockholders, particularly Carl C. Icahn and his affiliates (expected to own ~93.32% of the combined company), may conflict with the interests of other stockholders.
• Pre-closing Enzon stockholders (excluding Icahn affiliates) will experience significant dilution of ownership and voting interests in the combined company.
• There is no assurance that the anticipated benefits of the merger with Viskase will be realized, especially given Viskase's recent operational and financial deterioration.
• The ability to fully utilize Enzon's net operating loss carryforwards (NOLs) and other tax attributes post-merger is not assured and could be limited by Section 382 of the Internal Revenue Code, potentially leading to higher cash tax obligations.
• The merger is subject to several closing conditions, including the completion of the Series C exchange offer and Enzon having at least $40 million in cash at closing, which, if not satisfied, could lead to termination.
• The Merger Agreement limits Enzon's ability to pursue alternative transactions, potentially restricting better opportunities.
• Significant non-recurring costs have been incurred for the merger, and additional costs are expected, which could adversely impact financial results if the merger is not consummated.
• If the merger is not completed, Enzon will have only limited revenue from interest income on existing cash, with no anticipated material royalty revenues, posing a risk to its ongoing business and profitability.
• The price of Enzon's Common Stock has historically been volatile and may decline significantly, especially given the small public float and limited trading activity on the OTCQB market.
• There is no established public trading market for the Series C Preferred Stock, and holders may be unable to resell shares or only at an unfavorable price.

Future Outlook

The company's future is primarily tied to the successful consummation of the merger with Viskase Companies, Inc., which is expected to result in Enzon Pharmaceuticals, Inc. changing its name to Viskase Holdings, Inc. The combined entity's operations will largely be driven by Viskase's business. The company anticipates incurring further transaction costs before the merger closes and expects to adopt a new Section 382 Rights Agreement post-merger to protect its NOLs. If the merger is not completed, Enzon expects only limited revenue from interest income and does not anticipate generating material royalties from its existing patents or acquiring new revenue sources.

Management Comments

• Management believes that the Merger, pursuant to the terms of the Merger Agreement, should not limit Enzon's NOL carryforwards and other tax attributes under Section 382, though there is no assurance the IRS will agree.
• Management will continue to assess the need for the valuation allowance on deferred tax assets and will make adjustments when appropriate.
• Management acknowledges that the estimates and assumptions underlying projections of future taxable income are subject to risks and uncertainties, and actual results could differ substantially.

Industry Context

StockSavvy.ai notes that Enzon Pharmaceuticals has transitioned from a pharmaceutical company with royalty-generating assets to a public company acquisition vehicle. This strategic shift is a common maneuver for companies with limited ongoing operations and significant tax assets (like NOLs) to provide a public listing and capital structure for a private entity. The merger with Viskase, a company whose operating performance has recently deteriorated, introduces a new set of industry-specific challenges related to Viskase's business, moving Enzon away from its historical pharmaceutical context into a new, unspecified industry.

Comparison to Industry Standards

• StockSavvy.ai notes that Enzon's current financial performance, characterized by zero royalty revenue and significant operating losses driven by merger expenses, is not comparable to a typical operating company within the pharmaceutical or any other industry. Its status as an 'acquisition vehicle' means its financial metrics are primarily reflective of its cash management and merger-related activities, rather than operational performance against industry peers.
• The decline in interest and dividend income, while a negative trend, is influenced by broader market interest rates and the company's specific cash balance, rather than being a direct comparison to industry-specific investment returns.
• The delisting from OTCQX to OTCQB due to a low bid price is indicative of a micro-cap company with limited market interest, a common characteristic for shell companies or those undergoing significant restructuring, and not directly comparable to established industry players.

Corporate Governance

Related Party Transactions

• Icahn Enterprises Holdings L.P. (IEH) and certain affiliates beneficially own approximately 48.6% of outstanding Common Stock and 98.2% of outstanding Series C Preferred Stock. They also own 93.97% of Viskase's common stock.
• IEH Parties entered into a Support Agreement, agreeing to deliver written consents to approve the Merger and the Reverse Stock Split, and to exchange their Series C Preferred Stock for Common Stock prior to the merger.
• Following the merger, Mr. Icahn and his related entities are expected to beneficially own approximately 93.32% of the outstanding shares of the Combined Company, exerting significant influence over management and strategic direction.

Stakeholder Impact

• Shareholders (excluding Icahn affiliates) will experience significant dilution of their ownership and voting interests in the combined company.
• Holders of Series C Preferred Stock who do not participate in the Series C Exchange Offer will not have the right to exchange their shares for common stock after the offer expires and will remain subject to the preferred stock's terms, including potential redemption for cash.
• Employees: The company currently has no employees, so there is no direct impact on employees from the current operations or merger, other than the executive officer who provides services on a consulting basis.
• Customers and Suppliers: The merger with Viskase will shift the company's operational focus, potentially impacting Viskase's existing customers and suppliers, though details are not provided in this filing.
• Creditors: The company's cash position and the potential for future tax obligations (if NOLs are limited) could impact creditors, but the filing indicates sufficient liquidity for current operations.

Next Steps

• The Series C Exchange Offer will expire on March 9, 2026, unless extended or terminated.
• The Reverse Stock Split will be effected prior to the completion of the Merger.
• The closing of the transactions contemplated by the Merger Agreement is subject to the satisfaction or waiver of remaining conditions.
• The Section 382 Rights Agreement will terminate immediately prior to the date on which the Merger is consummated.
• If the Merger is completed, Enzon Pharmaceuticals, Inc. will change its name to Viskase Holdings, Inc.
• Following the merger, Enzon is required to re-apply to the OTCQB for continued quotation of its common stock.

Key Dates

Recommendation

A seasoned investor would likely recommend a 'hold' for Enzon Pharmaceuticals at this stage. While the approval of the merger and reverse stock split signals progress towards a transformative event, the company's current financial state (zero revenue, net loss) and the reported deterioration in Viskase's performance introduce significant uncertainty. The high concentration of ownership by Carl Icahn and affiliates also means limited influence for other shareholders. The stock's future value is almost entirely dependent on the successful integration and future performance of Viskase, which carries its own set of risks. Investors should await further clarity on the combined entity's operational outlook and financial projections before making a definitive 'buy' or 'sell' decision.

Keywords

Merger, Acquisition, Viskase, Enzon Pharmaceuticals, 10-K, SEC Filing, Net Operating Loss, NOLs, Reverse Stock Split, Series C Preferred Stock, OTC Markets, Corporate Governance, Financial Results, Carl Icahn, Public Company Acquisition Vehicle