Exhibit 10.26

                        RESTRICTED STOCK AWARD AGREEMENT

            THIS AGREEMENT, made as of this 5th day of December, 2003, by and
between Enzon Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and
Uli Grau ("Executive").

            WITNESSETH, THAT:

            WHEREAS, The Company wishes to grant a restricted stock award to
Executive;

            NOW, THEREFORE, In consideration of the premises and mutual
covenants herein contained, the parties hereto hereby agree as follows:

            1. Award

            The Company, effective as of the date of this Agreement, hereby
grants to Executive a restricted stock award of 40,000 shares (the "Shares") of
common stock of the Company (the "Common Stock") subject to the terms and
conditions set forth herein and to the terms of the Employment Agreement between
the Company and Executive, dated as of December 5, 2003, (the "Employment
Agreement") which are specifically referenced herein. Capitalized terms used but
not defined herein shall have the meanings ascribed to such terms in the
Employment Agreement.

            2. Vesting

            Subject to the terms and conditions of this Agreement, the
Executive's Shares shall vest according to the following schedule:

            Date                     Number of Shares that Vest on such Date
            ----                     ---------------------------------------

            December 5, 2006                         12,000
            December 5, 2007                         12,000
            December 5, 2008                         16,000

            3. Restriction on Transfer

            Until any group of Shares vests pursuant to Sections 2 or 4 hereof,
none of such Shares may be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of or encumbered, and no attempt to transfer such Shares,
whether voluntary or involuntary, by operation of law or otherwise, shall vest
the transferee with any interest or right in or with respect to such Shares.

            4. Early Vesting; Forfeiture

            (a) In the event the Company terminates Executive's employment as
the Company's Chief Scientific Officer without Cause pursuant to Section
9(a)(iv) of the Employment Agreement or Executive terminates such employment for
Good Reason pursuant to Section 9(c) of the Employment Agreement, all of the
Shares granted to Executive pursuant to Section 1 hereof shall vest immediately
upon termination;

            (b) In the event the Company terminates Executive's employment as
the Company's Chief Scientific Officer for Cause pursuant to Section 9(a)(iii)
of the Employment Agreement, Executive will forfeit all unvested Shares granted
to Executive pursuant to Section 1 hereof.

            (c) In the event Executive's employment as the Company's Chief
Scientific Officer is terminated as a result of Executive's death, all unvested
Shares granted to Executive pursuant to Section 1 hereof shall vest immediately
upon Executive's death.

            (d) Upon termination of Executive's employment as the Company's
Chief Scientific Officer


                                       55
<PAGE>

on account of Executive's disability pursuant to Section 9(a)(ii) of the
Employment Agreement, all unvested Shares granted to Executive pursuant to
Section 1 hereof shall vest immediately upon such termination.

            (e) In the event Executive voluntarily terminates his employment as
the Company's Chief Scientific Officer, other than for Good Reason pursuant to
Section 9(c) of the Employment Agreement, Executive will forfeit all unvested
Shares granted to Executive pursuant to Section 1 hereof.

            (f) Notwithstanding anything to the contrary in this Agreement or
the Employment Agreement, the Compensation Committee of the Board of Directors
of the Company (the "Committee") or the Board of Directors of the Company (the
"Board"), in its sole discretion, may waive any of the forfeiture requirements
in this Section 4 or may accelerate the vesting of all or a portion of the
Shares as the Committee or the Board so determines.

            5. Issuance and Custody of Certificate

            (a) The Company shall cause to be issued one or more stock
certificates, registered in the name of Executive, evidencing the Shares. Each
such certificate shall bear the following legends:

            "The shares of common stock represented by this certificate are
subject to forfeiture, and the transferability of this certificate and the
shares of stock represented hereby are subject to the restrictions, terms and
conditions (including restrictions against transfer) contained in a Restricted
Stock Award Agreement entered into between Enzon Pharmaceuticals, Inc. (formerly
known as Enzon, Inc.) and the registered owner of such shares dated December 5,
2003. A Copy of the Restricted Stock Award Agreement is on file in the office of
Enzon Pharmaceuticals, Inc."

            (b) Contemporaneous with the execution hereof, Executive shall cause
stock powers relating to the Shares executed by Executive to be delivered to the
Company.

            (c) Each certificate issued pursuant to Section 5(a) hereof,
together with the stock powers relating to the Shares, shall be deposited by the
Company with the Secretary of the Company or a custodian designated by the
Secretary. The Secretary or such custodian shall issue a receipt to Executive
evidencing the certificate or certificates held which are registered in the name
of Executive.

            (d) After any Shares subject to this Agreement vest pursuant to
Sections 2 or 4(b) hereof, the Company shall promptly cause a certificate or
certificates evidencing such vested Shares, (together with the stock powers
relating to the Shares) to be released and delivered to Executive or Executive's
legal representatives, beneficiaries or heirs.

            (e) Prior to issuance of the Shares, the Company shall have caused
such issuance to be registered under the Securities Act of 1933, as amended.

            6. Distributions and Adjustments

            (a) In the event of a merger, consolidation, reorganization,
recapitalization, stock dividend or other event, including a Change in Control
as defined in the Employment Agreement, the number and character of the Shares
shall be adjusted at the same time and to the same extent as other shares of
Common Stock are adjusted as a result of any such event. If all or any portion
of the Shares vest in Executive subsequent to any such change in the number or
character of the shares of Common Stock, Executive shall then receive upon such
vesting the number and type of securities or other consideration which
Participant would have received if the Shares had vested prior to the event
changing the number or character of outstanding shares of Common Stock.

            (b) Any additional shares of Common Stock, any other securities of
the Company and any other property (except for cash dividends) distributed with
respect to the Shares prior to the date the Shares vest


                                       56
<PAGE>

shall be subject to the same restrictions, terms and conditions as the Shares.
Any cash dividends payable with respect to the Shares shall be distributed to
Executive at the same time cash dividends are distributed to stockholders of the
Company generally.

            (c) Any additional shares of Common Stock, any securities and any
other property (except for cash dividends) distributed with respect to the
Shares prior to the date such Shares vest shall be promptly deposited with the
Secretary or the custodian designated by the Secretary to be held in custody in
accordance with Section 5(c) hereof for Executive's benefit and shall be
distributed to Executive as provided in Section 6(b) when the Shares vest.

            7. Taxes

            (a) The issuance of the Shares to Executive pursuant to this
Agreement involves complex and substantial tax considerations, including,
without limitation, consideration of the advisability of Executive making an
election under Section 83(b) of the Internal Revenue Code. The Executive is
urged to consult his own tax advisor with respect to the transactions described
in this Agreement. The Company makes no warranties or representations whatsoever
to the Executive regarding the tax consequences of the grant to the Executive of
the Shares or this Agreement. Executive acknowledges that the making of any
Section 83(b) election shall be his personal responsibility.

            (b) In order to provide the Company with the opportunity to claim
the benefit of any income tax deduction which may be available to it in
connection with this restricted stock award, and in order to comply with all
applicable federal or state tax laws or regulations, the Company may take such
action as it deems appropriate to insure that, if necessary, all applicable
federal or state income and social security taxes, which are the sole and
absolute responsibility of Executive, are withheld or collected from Executive.

            (c) Executive may elect to satisfy his federal and state income tax
withholding obligations arising from the receipt of, or the lapse of
restrictions relating to, the Shares by (i) delivering cash, check (bank check,
certified check or personal check) or money order payable to the order of the
Company, (ii) having the Company withhold a portion of the Shares otherwise to
be delivered having a fair market value based on the last reported sale price of
a share of Common Stock on the Nasdaq Stock Market (or if the Shares no longer
trade on the Nasdaq Stock Market, the closing or last reported price on the
principal exchange or system on which they trade) (the "Fair Market Value")
equal to the amount of such taxes, or (iii) delivering to the Company Common
Stock having a Fair Market Value equal to the amount of such taxes. The Company
will not deliver any fractional Share but will pay, in lieu thereof, the Fair
Market Value of such fractional Share. The Participant's election must be made
on or before the date that the amount of tax to be withheld is determined.
Otherwise, the Company shall be entitled to withhold taxes due in such manner as
the Company determines in its discretion.

            8. Miscellaneous

            (a) Executive shall be entitled at all times to all of the rights of
a stockholder with respect to the Shares, including without limitation the right
to vote and tender such Shares and to receive dividends and other distributions
as provided in and subject to the provisions of Section 6.

            (b) Executive hereby acknowledges receipt of a copy of the
Employment Agreement. The Employment Agreement is also available for inspection
during business hours at the principal office of the Company.

            (c) This Agreement shall not confer on Executive any right with
respect to continuance of employment by the Company.

            (d) This Agreement shall inure to the benefit of, and be binding
upon, the Company, its successors and assigns, and upon Executive, his
administrator, executor, personal representative, successors and


                                       57
<PAGE>

heirs.

            (e) Except as provided in Section 4(f), no change to or modification
of this Agreement shall be valid unless it is in writing and signed by the
Company and Executive.

            IN WITNESS WHEREOF, The parties hereto have caused this Agreement to
be executed on the day and year first above written.

                                       ENZON PHARMACEUTICALS, INC.


                                       By: /s/ Arthur Higgins
                                           -------------------------------------
                                           President and Chief Executive Officer


                                       By: /s/ Ulrich Grau, Ph.D
                                           -------------------------------------


                                       58