<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A
                                (AMENDMENT NO. 1)

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2005

                                       or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934


                    For the Transition Period from ___ to ___

                         Commission file number 0-12957

                           Enzon Pharmaceuticals, Inc.

              Exact name of registrant as specified in its charter

<TABLE>
<CAPTION>

                      DELAWARE                                            22-2372868
          <S>                                                <C>
          (State or other jurisdiction of                    (I.R.S. Employer Identification No.)
           incorporation or organization)

     685 Route 202/206, Bridgewater, New Jersey                              08807
      (Address of principal executive offices)                            (Zip Code)

</TABLE>

                                 (908) 541-8600
              (Registrant's telephone number, including area code)

                                 Not Applicable
      (Former name, former address and former fiscal year, if changed since
                                  last report)

                                   ----------

         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|


         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). |X| No |_|

Shares of Common Stock outstanding as of May 4, 2005:  43,858,705.


<PAGE>


                                EXPLANATORY NOTE

         This quarterly report on Form 10-Q/A amends and restates our original
quarterly report on Form 10-Q for the period ended March 31, 2005 as of the date
of filing the original Form 10-Q on May 10, 2005. We are amending and restating
our original quarterly report on Form 10-Q in its entirety with respect to our
accounting for the application of hedge accounting for a zero cost protective
collar arrangement under Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities", as amended (SFAS
No. 133) and certain changes identified in the Accounting for technology license
agreements. The protective collar arrangement was entered into during August
2003 to reduce the exposure associated with changes in the fair value of the 1.5
million shares of common stock of NPS Pharmaceuticals, Inc. ("NPS") we received
in connection with a June 2003 merger termination agreement.

         This amended quarterly report on Form 10-Q/A for the period ended March
31, 2005 reflects corrections and restatements of the following financial
statements: (a) condensed consolidated balance sheet as of March 31, 2005 (b)
condensed consolidated statements of operations for the period ended March 31,
2005 and (c) condensed consolidated statements of cash flows for the fiscal
period ended March 31, 2005.

         We are also filing under separate documents amended quarterly reports
on Form 10-Q/A for the quarter and fiscal year-to-date periods ended September
30, 2004 and December 31, 2004. For a more detailed description of corrections
and restatements made to the financial statements, see Note 2, "Restatement and
Reclassifications of Condensed Consolidated Financial Statements", to the
accompanying notes to the condensed consolidated financial statements.

         In addition to the changes discussed above, we have also made other
changes, including but not limited to the following to reflect the changes
discussed herein: (a) other income for the fiscal period ended March 31, 2005
under "Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations" to reflect the changes discussed herein; (b) unrealized
loss on securities that arose during the fiscal period and our total
comprehensive loss for the fiscal period ended March 31, 2005 in Note 4,
"Comprehensive Income", to the accompanying notes to the condensed consolidated
financial statements; (c) unrealized gain previously recognized in other income
and recorded in accumulated other comprehensive income for the fiscal period
ended March 31, 2005 with respect to the sale and repurchase of shares of NPS in
Note 13, "Derivative Instruments", to the accompanying notes to the condensed
consolidated financial statements (d) total gross deferred tax assets as of
March 31, 2005 and income tax provision for the fiscal period ended March 31,
2005 in Note 11, "Income Taxes", to the accompanying notes to the condensed
consolidated financial statements; (e) net loss and net loss per common share
for the fiscal period ended March 31, 2005 in Note 5, 11, "Earnings Per Common
Share", to the accompanying notes to the condensed consolidated financial
statements; and (f) pro forma net loss and net loss per common share for the
fiscal periods ended March 31, 2005 in Note 6, "Stock-Based Compensation", to
the accompanying notes to the condensed consolidated financial statements.

         This amended and restated quarterly report on Form 10-Q/A is as of
the end of our fiscal period March 31, 2005 as required by Form 10-Q or as of
the date of filing the original Form 10-Q. It does not update any of the
statements contained therein for subsequent events or forward looking
statements. This quarterly report on Form 10-Q/A contains forward looking
statements, which were made at the time the original quarterly report on Form
10-Q was filed on May 10, 2005 and must be considered in light of any subsequent
events and subsequent statements including forward looking statements in any
written statement subsequent to the filing of the original quarterly report on
Form 10-Q, including statements made in filings on current reports on Form 8-K.


                                       2
<PAGE>


PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                     MARCH 31, 2005    JUNE 30, 2004
                                                                                     --------------    -------------
                                                                                       (Restated)
                                                                                        (Note 2)
<S>                                                                                     <C>              <C>
ASSETS

Current assets:
  Cash and cash equivalents                                                             $  41,158        $  77,532
  Short-term investments                                                                  102,986           27,119
  Investment in equity securities                                                           9,465           23,625
  Accounts receivable, net                                                                 21,304           25,977
  Inventories                                                                              16,651           11,215
  Deferred tax and other current assets                                                    17,760           11,994
                                                                                        ---------        ---------
       Total current assets                                                               209,324          177,462
                                                                                        ---------        ---------
Other assets:
  Property and equipment, net                                                              33,518           34,859
  Marketable securities                                                                    65,893           81,582
  Investments in equity securities                                                          6,383           14,281
  Amortizable intangible assets, net                                                      180,617          194,067
  Goodwill                                                                                150,985          150,985
  Deferred tax and other assets                                                            69,908           69,174
                                                                                        ---------        ---------
                                                                                          507,304          544,948
                                                                                        ---------        ---------
Total assets                                                                            $ 716,628        $ 722,410
                                                                                        =========        =========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                                                      $  10,821        $   8,663
  Accrued expenses                                                                         18,206           23,001
                                                                                        ---------        ---------
       Total current liabilities                                                           29,027           31,664
                                                                                        ---------        ---------

Other liabilities                                                                             899            1,655
Notes payable                                                                             400,000          400,000
                                                                                        ---------        ---------
                                                                                          400,899          401,655
                                                                                        ---------        ---------
Commitments and contingencies
Stockholders' equity:
  Preferred stock-$.01 par value, authorized 3,000,000 shares; no shares
    issued and outstanding at March 31, 2005 and at June 30, 2004                              --               --
  Common stock-$.01 par value, authorized 90,000,000 shares; issued and
   outstanding 43,858,705 shares at March 31, 2005
    and 43,750,934 shares at June 30, 2004                                                    439              438
  Additional paid-in capital                                                              323,354          322,486
  Accumulated other comprehensive loss                                                     (6,281)          (7,330)
  Deferred compensation                                                                    (3,804)          (3,571)
  Accumulated deficit                                                                     (27,006)         (22,932)
                                                                                        ---------        ---------
       Total stockholders' equity                                                         286,702          289,091
                                                                                        ---------        ---------
Total liabilities and stockholders' equity                                              $ 716,628        $ 722,410
                                                                                        =========        =========

</TABLE>

* Condensed from audited consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


                                       3
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                        THREE MONTHS ENDED        NINE MONTHS ENDED
                                                                             MARCH 31,                 MARCH 31,
                                                                   -------------------------   ------------------------
                                                                      2005           2004          2005         2004
                                                                   ----------     ----------    ----------   ----------
                                                                   (Restated)                   (Restated)
                                                                    (Note 2)                     (Note 2)
<S>                                                                 <C>           <C>           <C>           <C>
Revenues:
    Product sales, net                                                $21,224       $27,993       $75,712       $80,665
    Manufacturing revenue                                               4,359         5,035        12,335         8,826
    Royalties                                                          13,179        11,103        33,373        36,461
    Contract revenue                                                      451           248         1,163           769
                                                                    ---------     ---------     ---------     ---------
              Total revenues                                           39,213        44,379       122,583       126,721
                                                                    ---------     ---------     ---------     ---------

Costs and expenses:
    Cost of product sales and manufacturing revenue                     9,024        12,458        32,306        35,195
    Research and development                                           12,665        10,772        31,390        24,711
    Selling, general and administrative                                13,658        12,500        39,630        35,187
    Amortization of acquired intangible assets                          3,339         3,358        10,091        10,074
    Acquired in-process research and development                            -        12,000             -        12,000
                                                                    ---------     ---------     ---------     ---------
             Total costs and expenses                                  38,686        51,088       113,417       117,167
                                                                    ---------     ---------     ---------     ---------

Operating (loss) income                                                   527        (6,709)        9,166         9,554
                                                                    ---------     ---------     ---------     ---------
Other income (expense):
    Investment income, net                                              1,116        11,564         2,859        12,744
    Interest expense                                                   (4,957)       (4,957)      (14,871)      (14,871)
    Other, net                                                         (1,572)        4,797        (3,523)       (2,048)
                                                                    ---------     ---------     ---------     ---------
                                                                       (5,413)       11,404       (15,535)       (4,175)
                                                                    ---------     ---------     ---------     ---------

(Loss) income before tax benefit                                       (4,886)        4,695        (6,369)        5,379
Income tax benefit                                                     (1,761)       (3,408)       (2,295)       (3,557)
                                                                    ---------     ---------     ---------     ---------
Net (loss) income                                                     ($3,125)       $8,103       ($4,074)       $8,936
                                                                    =========     =========     =========     =========

Basic (loss) earnings per common share                                 ($0.07)        $0.19        ($0.09)        $0.21
                                                                    =========     =========     =========     =========
Diluted (loss) earnings per common share                               ($0.07)        $0.18        ($0.09)        $0.20
                                                                    =========     =========     =========     =========
Weighted average number of common shares outstanding -
    basic                                                              43,490        43,368        43,481        43,322
                                                                    =========     =========     =========     =========

Weighted average number of common shares and dilutive
    potential common shares outstanding                                43,490        43,817        43,481        43,657
                                                                    =========     =========     =========     =========

</TABLE>


The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


                                       4
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                              NINE MONTHS ENDED
                                                                                   MARCH 31,
                                                                          ---------------------------
                                                                             2005             2004
                                                                          -----------      ----------
                                                                           (Restated)
                                                                            (Note 2)
<S>                                                                       <C>              <C>
Cash flows from operating activities:
      Net (loss) income                                                     ($4,074)       $   8,936
      Adjustments to reconcile net (loss) income to net cash
           provided by operating activities:
              Depreciation and amortization                                  17,007           16,487
              Non-cash expense for restricted stock grants                      429            1,132
              Loss (gain) on sale of investments                              3,541          (10,977)
              Non-cash loss (gain) related to equity collar
                  arrangement                                                   804            2,275
              Amortization of debt issue costs                                1,371            1,371
              Amortization of bond premium/discount                           2,049              409
              Deferred income taxes                                          (2,689)          (5,722)
              Changes in operating assets and liabilities                    (5,619)          (5,453)
                                                                          ---------        ---------

                    Net cash provided by operating activities                12,819            8,458
                                                                          ---------        ---------

Cash flows from investing activities:
      Purchase of property and equipment                                     (2,210)          (4,640)
      Proceeds from sale of equity investment                                15,335           17,375
      Proceeds from sale of marketable securities                            74,000           49,744
      Purchase of marketable securities                                    (136,525)         (44,450)
                                                                          ---------        ---------
                    Net cash (used in) provided by investing activities     (49,400)          18,029
                                                                          ---------        ---------
Cash flows from financing activities:
      Proceeds from exercise of common stock options                            207              431
                                                                          ---------        ---------

                    Net cash provided by financing activities                   207              431
                                                                          ---------        ---------

Net (decrease) increase in cash and cash equivalents                        (36,374)          26,918

Cash and cash equivalents at beginning of period                             77,532           44,452
                                                                          ---------        ---------

Cash and cash equivalents at end of period                                  $41,158          $71,370
                                                                          =========        =========

</TABLE>

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


                                       5
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


(1) ORGANIZATION AND BASIS OF PRESENTATION

         The unaudited condensed consolidated financial statements have been
prepared from the books and records of Enzon Pharmaceuticals, Inc. and its
subsidiaries ("Enzon" or the "Company") in accordance with United States
generally accepted accounting principles ("GAAP") for interim financial
information and Rule 10-01 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required for complete annual financial
statements. The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. In the opinion of management,
all adjustments (consisting only of normal and recurring adjustments) considered
necessary for a fair presentation have been included. See Note 2 for discussion
of restatement. Certain prior year balances have been reclassified to conform to
the current period presentation. Interim results are not necessarily indicative
of the results that may be expected for the year. The interim condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's latest annual report on Form 10-K/A (Amendment No. 2).

(2) RESTATEMENT AND RECLASSIFICATIONS OF CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

         In August and September 2005, the Company concluded that its previously
issued financial statements and other financial information for the quarter and
fiscal year-to-date periods ended September 30, 2004, December 31, 2004 and
March 31, 2005, required restatement with respect to its accounting for a
derivative hedging instrument and certain third party agreements. The Company
has restated the comparable fiscal periods in a previously filed amendment to
the respective Form 10-Q or 10-K due to computational changes in the valuation
of and for the application of hedge accounting for a zero cost protective collar
arrangement under Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Securities," as amended. The
comparable fiscal periods included in the quarterly report on Form 10-Q/A,
reflects the restated amounts.

         The restatement is primarily due to the accounting for the application
of hedge accounting for a zero cost protective collar arrangement under
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended (SFAS No. 133).

         As described in Note 13 "Derivative Instruments", the Company entered
into a zero cost protective collar ("Collar") arrangement in August 2003 to
reduce its exposure to changes in fair value associated with 1.5 million common
shares of NPS Pharmaceutical, Inc. ("NPS"), which the Company received in
connection with the termination of a proposed merger. Pursuant to the terms of
the Merger Termination Agreement, the Company was restricted as to the number of
shares it could sell on a quarterly basis. Under the collar arrangement, the
Company was required to deliver unrestricted freely trading shares of NPS common
stock upon the maturity date of the Collar, as well as maintain 1.5 million of
shares of NPS common stock on account with the financial institution as
collateral during the term of the collar agreement. Therefore, during the period
of November 2003 to October 2004, the Company sold and simultaneously
repurchased 375,000 shares of NPS common stock quarterly in order to remove the
restriction while maintaining the collateralized shares. In August 2005, the
Company determined that the initial sale of NPS common stock in November 2003
resulted in the termination of the existing hedging relationship and that the
Company was unable to meet certain fair value hedging criteria pursuant to SFAS
No. 133 at that time to re-designate the hedging relationship. Accordingly, the
Company terminated its hedge accounting treatment in November 2003, which
resulted in the changes in unrealized gains and losses on the NPS common stock
underlying the derivative hedging instrument previously included in other income
(expense) being recorded in accumulated other comprehensive income (loss) on the
condensed consolidated balance sheet. The accounting change corrects a
misallocation between other income (expense) and accumulated other comprehensive
income (loss) for the quarters and fiscal year-to-date periods ended September
30, 2004, December 31, 2004 and March 31, 2005.

         The Company has also made certain reclassifications between non-current
and current assets and liabilities of a portion of the balance associated with
the Collar and NPS common stock to reflect the timeing of the maturity of the
Collar instrument and related sale of NPS common stock.


                                       6
<PAGE>


                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


         Additionally, the Company determined that certain third party related
agreements were not accounted for correctly during the fiscal quarters ended
September 30, 2004, December 31, 2004 and March 31, 2005. The resulting changes
are a reduction of research and development expense during the fiscal quarters
ended September 30, 2004, December 31, 2004 and March 31, 2005 and an increase
to royalties during the fiscal quarter ended March 31, 2005.

         The following tables show the impact of the restatement on the relevant
captions from the Company's condensed consolidated financial statements as of
and for the periods indicated. These tables contain only the changed balances
and do not represent the complete condensed consolidated balance sheet as of
such period or condensed consolidated statements of operations for the periods
then ended (in thousands, except per share amounts).

                 CHANGES TO CONDENSED CONSOLIDATED BALANCE SHEET

                                 MARCH 31, 2005

<TABLE>
<CAPTION>
                                                    Previously
                                                     Reported       Adjustments     Restated
                                                    ----------      -----------     --------
<S>                                                    <C>             <C>          <C>
Investment in equity securities                       $      -         $  9,465     $  9,465
Accounts receivable, net                                20,831              473       21,304
Deferred tax and other current assets                   17,276              484       17,760
Total current assets                                   198,902           10,422      209,324
Investments in equity securities                        15,848          (9,465)        6,383
Non-current deferred tax and other assets               70,262            (354)       69,908
Total non-current assets                               517,123          (9,819)      507,304
Total assets                                           716,025              603      716,628
Accumulated other comprehensive loss                    (3,010)         (3,271)      (6,281)
Accumulated deficit                                    (30,880)           3,874     (27,006)
Total stockholders' equity                             286,099              603      286,702
Total liabilities and stockholders' equity             716,025              603      716,628

</TABLE>

           CHANGES TO CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                Three Months ended                       Nine Months ended
                                                   March 31, 2005                          March 31, 2005
                                         -----------------------------------   ------------------------------------
                                         Previously                            Previously
                                          Reported    Adjustments   Restated    Reported     Adjustments   Restated
                                         ----------   -----------   --------   -----------   -----------   --------
<S>                                      <C>          <C>          <C>          <C>          <C>          <C>
Royalties                                $  12,705    $     474    $  13,179    $  32,899    $     474    $  33,373
Total revenues                              38,739          474       39,213      122,109          474      122,583
Research and development                    12,942         (277)      12,665       31,874         (484)      31,390
Total costs and expenses                    38,963         (277)      38,686      113,901         (484)     113,417
Operating income (expense)                    (224)         751          527        8,208          958        9,166
Other, net                                  (3,230)       1,658       (1,572)      (5,173)       1,650       (3,523)
Total other income (expense)                (7,071)       1,658       (5,413)     (17,185)       1,650      (15,535)
Income before tax provision (benefit)       (7,295)       2,409       (4,886)      (8,977)       2,608       (6,369)
Income tax benefit                          (2,718)         957       (1,761)      (3,324)       1,029       (2,295)
Net (loss) income                           (4,577)       1,452       (3,125)      (5,653)       1,579       (4,074)
Basic (loss) earnings per common share       (0.11)        0.04        (0.07)       (0.13)        0.04        (0.09)
Diluted (loss) earnings per common           (0.11)        0.04        (0.07)       (0.13)        0.04        (0.09)
share
</TABLE>


                                       7
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


         The restatement did not result in any changes to cash and cash
equivalents as of March 31, 2005 or any changes to the net cash flows from
operations, investing or financing activities in the condensed consolidated
statement of cash flows for the period ended March 31, 2005 although it did
result in certain reclassifications among certain components of net cash flow
from operations.

         As a result of the adjustments discussed above, modifications were
required to previously filed footnotes as follows: Note 4 "Comprehensive
Income", Note 5, "Earnings Per Common Share", Note 6, "Stock-Based
Compensation", Note 11, "Income Taxes" and Note 13, "Derivative Instruments".

(3) MARKETABLE SECURITIES

         The Company classifies its investments in debt and marketable equity
securities, including auction rate securities, as available-for-sale. The
Company classified those investments available for current operations with
maturities of one year or less as current assets. Debt and marketable equity
securities are carried at fair value, with the unrealized gains and losses
(which are deemed to be temporary), net of related tax effect, included in the
determination of other comprehensive income and reported in stockholders'
equity. The fair value of substantially all securities is determined by quoted
market prices.

         At March 31, 2005 and June 30, 2004 the Company held auction rate
securities for which interest or dividend rates are generally re-set for periods
of up to 90 days. The auction rate securities outstanding at March 31, 2005 and
June 30, 2004 were investments in state government bonds and corporate
securities. In the third quarter of 2005, the Company reclassified its auction
rate securities from cash and cash equivalents to either short-term investments
or marketable securities, depending upon the instrument's maturity date. At
March 31, 2005, the Company held auction rate securities with contractual
maturities between 2005 and 2009.

         The cost of the debt securities is adjusted for amortization of
premiums and accretion of discounts to maturity. The amortization, along with
realized gains and losses, is included in investment income. The cost of
securities is based on the specific identification method.

         A decline in the market value of any security below cost that is deemed
to be other-than-temporary results in a reduction in carrying amount to fair
value. The impairment is charged to earnings and a new cost basis for the
security is established. Dividend and interest income are recognized when
earned.


                                       8
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


         The amortized cost, gross unrealized holding gains or losses, and fair
value for the Company's available-for-sale securities by major security type as
of March 31, 2005 were as follows (in thousands):

<TABLE>
<CAPTION>

                                                                Gross             Gross
                                            Amortized        Unrealized         Unrealized
                                              Cost          Holding Gains     Holding Losses      Fair Value*
                                         ----------------  ----------------  ----------------   ----------------
<S>                                             <C>                    <C>          <C>                <C>
U.S. Government Agency Debt                     $ 91,357               $ -            ($689)           $ 90,668
U.S. Corporate Debt                               70,942                12             (768)             70,186
Auction Rate Securities                            8,025                 -                 -              8,025
                                         ----------------  ----------------  ----------------   ----------------

                                                $170,324               $12          ($1,457)           $168,879
                                         ================  ================  ================   ================

</TABLE>

         *  $102,986 is included in short-term investments and $65,893 is
            included in marketable securities.

         The amortized cost, gross unrealized holding gains or losses, and fair
value for the Company's available-for-sale securities by major security type at
June 30, 2004 were as follows (in thousands):

<TABLE>
<CAPTION>

                                                               Gross              Gross
                                           Amortized        Unrealized          Unrealized
                                             Cost          Holding Gains      Holding Losses     Fair Value*
                                        ----------------  ----------------   ----------------  ----------------
<S>                                          <C>                  <C>             <C>             <C>
     U.S. Government Agency Debt             $ 24,017             $ 5               ($351)        $ 23,671
     U.S. Corporate Debt                       71,832               6                (808)          71,030
     Auction Rate Securities                   14,000               -                   -           14,000
                                        ----------------  ----------------   ----------------  ----------------

                                             $109,849             $11             ($1,159)        $108,701
                                        ================  ================   ================  ================

</TABLE>

     *  $27,119 is included in short-term investments and $81,582 is
        included in marketable securities.


                                       9
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


(4) COMPREHENSIVE INCOME

         Statement of Financial Accounting Standards ("SFAS") No. 130,
"Reporting Comprehensive Income", requires unrealized gains and losses on the
Company's available-for-sale securities to be included in other comprehensive
income.

         The following table reconciles net (loss) income to comprehensive
(loss) income (in thousands):

<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                    MARCH 31,                     MARCH 31,
                                                               2005          2004            2005          2004
                                                             ---------     ----------      ----------     ---------
                                                             (Restated)                    (Restated)
                                                              (Note 2)                      (Note 2)
<S>                                                           <C>           <C>             <C>           <C>
Net (loss) income                                             ($3,125)      $  8,103        ($4,074)      $  8,936
Other comprehensive income:
    Unrealized (loss) gain on securities
         that arose during the period, net of tax              (2,998)        (1,687)        (4,831)         2,815

    Reclassification adjustment
        for loss (gain) included in net (loss)
        income, net of tax                                      3,550         (1,200)         5,880         (1,555)
                                                             --------       --------       --------       --------

    Total other comprehensive income (loss)                       552         (2,887)         1,049          1,260
                                                             --------       --------       --------       --------

Comprehensive (loss) income                                   ($2,573)      $  5,216        ($3,025)      $ 10,196
                                                             ========       ========       ========       ========
</TABLE>

(5) EARNINGS PER COMMON SHARE

         Basic earnings per share is computed by dividing the net (loss) income
by the weighted average number of shares of Common Stock issued and outstanding
during the periods. For purposes of calculating diluted earnings per share for
the three and nine months ended March 31, 2005 and 2004, the denominator
includes both the weighted average number of shares of Common Stock outstanding
and the number of potentially dilutive Common Stock equivalents if the inclusion
of such Common Stock equivalents is not anti-dilutive. As of March 31, 2005 and
2004, the Company had 10.1 million and 10.8 million, respectively, of
potentially dilutive Common Stock equivalents that are excluded from the
dilutive earnings per share calculations, as the effect of the inclusion would
be anti-dilutive.

         The following table reconciles the basic and diluted earnings (loss)
per share calculations (in thousands):

<TABLE>
<CAPTION>

                                                                THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                    MARCH 31,                      MARCH 31,
                                                           ----------------------------    --------------------------
                                                              2005              2004         2005           2004
                                                           (Restated)                       (Restated)
<S>                                                         <C>                <C>           <C>            <C>
   Net (loss) income                                        ($3,125)           $8,103        ($4,074)       $8,936
                                                           =========         ========        =======        ======

   Weighted average number of common
      shares outstanding - basic                             43,490            43,368         43,481        43,322
   Effect of dilutive common stock equivalents:
         Stock options                                           --               449             --           335
                                                           --------          --------        -------        ------
   Weighted average number of common shares and
      dilutive potential common shares outstanding           43,490            43,817         43,481        43,657
                                                           ========          ========        =======        ======
</TABLE>



                                       10
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(6) STOCK-BASED COMPENSATION

         As permitted by SFAS No. 123, "Accounting for Stock-Based
Compensation", the Company accounts for stock-based compensation arrangements in
accordance with the provisions of Accounting Principals Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees" and related interpretations.
Compensation expense for stock options issued to employees is based on the
difference between the fair value of the Company's stock and the exercise price
of the option on the date of grant. Stock-based compensation reflected in net
(loss) income is attributed to restricted stock. No stock-based employee
compensation cost is reflected in net (loss) income with respect to stock
options granted to employees as options are granted at exercise prices equal to
the market value of the underlying Common Stock at the date of grant.

         The following table illustrates the effect on net (loss) income and net
(loss) earnings per share if the Company had applied the fair value recognition
provisions of SFAS No. 123 to stock-based compensation (in thousands, except per
share data):

<TABLE>
<CAPTION>

                                                                     THREE MONTHS ENDED           NINE MONTHS ENDED
                                                                          MARCH 31,                   MARCH 31,
                                                                 ------------------------      ------------------------
                                                                    2005          2004            2005         2004
                                                                 ----------    ----------      ----------    ----------
                                                                 (Restated)                    (Restated)
<S>                                                               <C>          <C>               <C>          <C>
 Net (loss) income:
      As reported                                                 ($3,125)     $   8,103         ($4,074)     $   8,936

 Add: Stock-based employee
     compensation expense included in
     reported net (loss) income, net of tax (1)                        35            277             270            718

Deduct: Total stock-based employee
     compensation expense determined
     under fair-value-based method for all
     awards, net of tax (1)                                        (2,303)        (3,040)         (9,073)        (8,588)
                                                                  -------      ---------        --------      ---------

Pro forma net (loss) income                                       ($5,393)     $   5,340        ($12,877)     $   1,066
                                                                  =======      =========        ========      =========

Earnings per common share - basic:
         As reported                                               ($0.07)     $    0.19          ($0.09)     $    0.21
         Pro forma                                                 ($0.12)     $    0.12          ($0.30)     $    0.02
Earnings per common share - diluted:
         As reported                                               ($0.07)     $    0.18          ($0.09)     $    0.20
         Pro forma                                                 ($0.12)     $    0.12          ($0.30)     $    0.02

</TABLE>

     (1)  Information for 2005 and 2004 has been adjusted for income taxes using
          estimated tax rates of 37% and 29%, respectively.

(7) INVENTORIES

            As of March 31, 2005 and June 30, 2004 inventories consisted of the
following (in thousands):

                                         MARCH 31, 2005      JUNE 30, 2004
                                         --------------      -------------

             Raw materials                      $ 4,802            $ 3,143
             Work in process                      2,928              3,716
             Finished goods                       8,921              4,356
                                         --------------      -------------
                                                $16,651            $11,215
                                         ==============      =============



                                       11
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


(8) INTANGIBLE ASSETS

         As of March 31, 2005 and June 30, 2004 intangible assets consisted of
the following (in thousands):

<TABLE>
<CAPTION>

                                                      MARCH 31,       JUNE 30,       ESTIMATED
                                                        2005            2004        USEFUL LIVES
                                                      --------        -------      --------------
          <S>                                         <S>           <C>            <C>
          Product Patented Technology                 $ 64,400      $  64,400          12 years
          Manufacturing Patent                          18,300         18,300          12 years
          NDA Approval                                  31,100         31,100          12 years
          Trade name and Other Product Rights           80,000         80,000          15 years
          Manufacturing Contract                         2,200          2,200           3 years
          Patent                                         1,906          2,092         1-5 years
          Product Acquisition Costs                     26,194         26,194       10-14 years
                                                 -------------    ----------
                                                       224,100       224,286
          Less:  Accumulated Amortization               43,483        30,219
                                                 -------------    ----------
                                                      $180,617      $194,067
                                                 =============    ==========
</TABLE>

         Amortization charged to operations relating to intangible assets
totaled $4.5 million of which $1.1 million is classified in cost of product
sales and manufacturing revenue for each of the three months ended March 31,
2005 and 2004. For each of the nine month periods ended March 31, 2005 and 2004
amortization charged to operations relating to intangible assets totaled $13.4
million, of which $3.4 million is classified in cost of product sales and
manufacturing revenue. Amortization expense for these intangibles for the next
five fiscal years is expected to be approximately $17.9 million per year.

(9) GOODWILL

        On November 22, 2002, the Company acquired the North American rights and
operational assets associated with the development, manufacture, sales and
marketing of ABELCET(R) (amphotericin B lipid complex injection) (the "North
American ABELCET business") from Elan Corporation, plc ("Elan") for $360.0
million plus acquisition costs of approximately $9.3 million. The acquisition is
being accounted for by the purchase method of accounting in accordance with SFAS
No. 141 "Business Combinations". The amount assigned to goodwill in connection
with the acquisition of the North American ABELCET business was recorded at
$151.0 million. In accordance with SFAS No. 142, "Goodwill and Other Intangible
Assets," the Company does not amortize goodwill but rather reviews it at least
annually for impairment. For income tax purposes, the entire amount of goodwill
is deductible and is being amortized over a 15 year period.

(10) CASH FLOW INFORMATION

         The Company considers all highly liquid securities with original
maturities of three months or less to be cash equivalents. For each of the nine
month periods ended March 31, 2005 and 2004, cash payments for interest were
$18.0 million. Income tax payments for the nine months ended March 31, 2005 and
2004, were $590,000 and $3.6 million, respectively.

(11) INCOME TAXES

         The Company recognized a tax benefit for the nine months ended March
31, 2005 at an estimated annual effective tax rate of 37%, which is based on the
projected income tax benefit and taxable loss for the fiscal year ending June
30, 2005. During the three and nine months ended March 31, 2005 the Company
recorded a valuation allowance of $701,000 and $1.4 million, respectively,
related to capital loss carryforwards generated during the periods related to
the sale of a portion of its equity investment in NPS Pharmaceuticals, Inc.
("NPS") and certain investments in debt and equity securities.



                                       12
<PAGE>


                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

         At March 31, 2005, the Company has approximately $71.0 million in net
deferred tax assets because management concluded that it is more likely than not
that the net deferred tax assets will be realized, including the net operating
losses from operating activities and stock option exercises, based on future
operations. As of March 31, 2005, the Company carries a valuation allowance of
$17.9 million with respect to certain capital loss carryforwards, deductible
temporary differences that would result in a capital loss carryforward when
realized, and federal research and development tax credits, as the ultimate
utilization of such losses and credits is not deemed likely. Events, such as a
sustained decline in the Company's product revenues and/or increased expenses,
could result in a revision to the Company's projected future taxable income, and
accordingly, the need for a valuation allowance based upon the ultimate
realizability of its net operating loss carryforwards, research and development
tax credits, and other deferred tax assets. The Company's federal and state
operating loss carryforwards will begin to expire in 2009 and 2006,
respectively, and the federal and state research and development credits will
begin to expire in 2006 and 2021, respectively. The Company will continue to
assess the need for such valuation allowance based on analyses of operating
results and projections of future operating performance of the Company.

         During the three months ended March 31, 2004, the Company recorded a
net tax benefit of approximately $3.4 million related primarily to the reversal
of a deferred tax asset valuation allowance for the write-down in a prior year
of Enzon's investment in Nektar Therapeutics, which was sold during the quarter
ended March 31, 2004. The sale resulted in a gain of approximately $11.0
million. The benefit was also due to the reduction of Enzon's estimated taxable
income and effective tax rate to 29% as compared to 35% used in previous
quarters and a payment during the three months ended March 31, 2004 of $12.0
million to INEX Pharmaceuticals related to acquired in-process research and
development. The tax provision recognized for the nine months ended March 31,
2004 is based on the estimated annual effective tax rate of 29%. In addition,
the tax effect of the gain on the sale of Nektar Convertible Preferred Stock and
the acquired in process research and development charge was recognized during
the three months ended March 31, 2004, the period in which the items occurred.
In addition, during the three and nine months ended March 31, 2004 the Company
recorded $2.0 million tax expense and $832,000 tax benefit, respectively,
relating to the derivative instrument as described in Note 13.

         During the three and nine month period ended March 31, 2004, the
Company received $254,000 for the sale of certain New Jersey state net operating
loss carryforwards and also purchased certain New Jersey state net operating
loss carryforwards for $1.5 million, which were recorded as deferred tax assets.

(12) BUSINESS SEGMENTS

         A single management team that reports to the Chief Executive Officer
comprehensively manages the Company's operations. The Company does not operate
separate lines of business or separate business entities with respect to any of
its approved products or product candidates or contract manufacturing. In
addition, the Company does not conduct any operations outside of the United
States and Canada. The Company does not prepare discrete financial statements
with respect to separate product or contract manufacturing areas. Accordingly,
the Company does not have separately reportable segments as defined by SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information".

(13) DERIVATIVE INSTRUMENTS

         On February 19, 2003, the Company entered into an agreement and plan of
merger with NPS Pharmaceuticals, Inc. ("NPS"). On June 4, 2003, the merger
agreement was terminated. In accordance with the mutual termination agreement
between the two companies, the Company received 1.5 million shares of NPS common
stock. The termination agreement imposes certain restrictions with respect to
the transferability of the underlying shares including limiting the maximum
number of shares that can be transferred each month after the registration
statement relating to the shares is declared effective to 125,000 shares per
month. Considering such restrictions, 1.1 million shares were valued at $26.7
million, which was the fair value of NPS common stock on June 4, 2003 and in
accordance with SFAS No. 115 "Accounting for Certain Investments in Debt and
Equity Securities" ("SFAS No. 115") and the balance of 375,000 shares were
considered as restricted stock as defined under the scope exception provisions
of SFAS No. 115. The restricted stock was valued at $7.8 million by applying a
12% discount on the related fair value based on a valuation performed by an
independent third-party consulting firm. Total consideration received aggregated
$34.6 million. The Company also recorded $7.7 million in costs incurred related
to the proposed merger with NPS (primarily investment banking, legal and
accounting fees). The net gain of approximately $26.9 million was recorded as
other income in the condensed consolidated statement of operations for the year
ended June 30, 2003.


                                       13
<PAGE>

         In August 2003, the Company entered into a Zero Cost Protective Collar
arrangement with a financial institution to reduce the exposure associated with
the 1.5 million shares of common stock of NPS received as part of the merger
termination agreement with NPS. By entering into this equity collar arrangement
and taking into consideration the underlying put and call option strike prices,
the terms are structured so that the Company's investment in NPS stock, when
combined with the value of the Collar, should secure ultimate cash proceeds in
the range of 85%-108% of the negotiated fair value per share of $23.47
(representing a 4.85% discount off of the closing price of NPS common stock on
the day before the collar was executed). The Collar will mature in four separate
three-month intervals from November 2004 through August 2005, at which time the
Company receives proceeds from the sale of the securities. The amount due at
each maturity date is determined based on the market value of NPS' common stock
on such maturity date, as well as the value of the Collar. The contract requires
the Company to maintain a minimum cash balance of $30.0 million and additional
collateral up to $10.0 million (as defined) under certain circumstances with the
financial institution. The strike prices of the put and call options are subject
to certain adjustments in the event the Company receives a dividend from NPS. At
the time of inception, the Collar was designated a derivative hedging instrument
in accordance with SFAS 133 and as such, the Company periodically measures its
fair value and recognizes the derivative as an asset or a liability. The change
in fair value is recorded in other income in the condensed consolidated
statements of operations. At March 31, 2005, the Company had a receivable from
the financial institution of $5.4 million. During the three and nine months
ended March 31, 2005, the Company recorded an unrealized gains of $2.4 million
and $3.7 million, respectively, as a component of other income (expense)
representing the change in fair value of the Collar. During the three and nine
months ended March 31, 2004, the Company recorded an unrealized gain of $2.8
million and unrealized loss of $7.5 million, respectively, as a component of
other income (expense) representing the change in fair value of the Collar
instrument. During the three and nine months ended March 31, 2005, a total of
375,000 shares and 750,000 shares of the Collar matured resulting in a realized
loss of $4.0 million and $7.1 million, respectively, and net cash proceeds to
the Company totaling $7.5 million and $15.0 million. At March 31, 2005, 750,000
shares of the Collar remain active and will mature in to two equal intervals in
May 2005 and August 2005.

         The Company began selling and buying back the underlying NPS common
stock in November 2003, which resulted in the termination of the hedging
relationship. During the period from August 2003 through the date the hedging
relationship was terminated, the NPS common stock had appreciated $5.7 million
in value, of which $2.3 million was recorded in other income in the condensed
consolidated statements of operations and $2.1 million, net of tax, was recorded
as a component of accumulated other comprehensive income in the statement of
stockholders equity. The $2.1 million gain, net of tax, recognized in other
comprehensive income at the point the hedging relationship was terminated was
recognized in operations proportionate to the sale of the underlying NPS common
stock.

         During the nine months ended March 31, 2005, the Company sold and
repurchased 375,000 shares, respectively, of NPS common stock to remove the
transferability restrictions on such shares, resulting in a net realized loss of
$578,000 which is included in other income (expense) in the condensed
consolidated statements of operations. There were no sales and repurchases
during the three months ended March 31, 2005.

         During the three and nine months ended March 31, 2004, the Company sold
and repurchased 375,000 and 750,000 shares, respectively, of NPS common stock to
remove the transferability restrictions on such shares, resulting in a net
realized gain of $2.0 million and $3.2 million, respectively, which is included
in other income (expense) in the condensed consolidated statements of
operations.

         As of March 31, 2005 and June 30, 2004, the Company held 750,000 shares
and 1.5 million shares of NPS common stock are valued, at $9.5 million, and
$31.5 million, respectively, and are included in investments in equity
securities on the accompanying condensed consolidated balance sheet.

(14) NEW ACCOUNTING PRONOUNCEMENTS

       In response to the enactment of the American Job Creation Act of 2004
(the "Jobs Act") on October 22, 2004 the Financial Accounting Standards Board
(FASB) issued FASB Staff Position (FSP) 109-1, Application of FASB Statement No.
109, Accounting for Income Taxes, for the Tax Deduction Provided to U.S. Based
Manufacturers by the American Job Creation Act of 2004.

       FSP No. 109-1 clarifies how to apply SFAS No. 109 to the new law's tax
deduction for income attributable to "domestic production activities." The fully
phased-in deduction is up to nine percent of the lesser of taxable income or
"qualified production activities income." The staff position requires that the
deduction be accounted for as a special deduction in the period earned, not as a
tax-rate reduction. As a result, the Company will recognize a reduction in its
provision for income taxes for domestic production activities in the quarterly
periods in which the Company is eligible for the deduction.

         In November 2004, the FASB issued SFAS No. 151, "Inventory Costs--An
Amendment of ARB No. 43, Chapter 4" ("SFAS No. 151"). SFAS No. 151 amends the
guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the
accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). Among other provisions, the new rule
requires that items such as idle facility expense, excessive spoilage, double
freight, and rehandling costs be recognized as current-period charges regardless
of whether they meet the criterion of "so abnormal" as stated in ARB No. 43.
Additionally, SFAS No. 151 requires that the allocation of fixed production
overheads to the costs of conversion be based on the normal capacity of the
production facilities. SFAS No. 151 is effective for fiscal years beginning
after June 15, 2005 and is required to be adopted by the Company in the first
quarter of fiscal 2006, beginning on July 1, 2005. The Company is currently
evaluating the effect that the adoption of SFAS No. 151 will have on its
consolidated results of operations and financial condition and does not expect
SFAS No. 151 to have a material impact.



                                       14
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


         In December 2004, the FASB issued SFAS No. 123 (revised 2004),
"Share-Based Payment" ("SFAS No. 123R"), which replaces SFAS No. 123,
"Accounting for Stock-Based Compensation," ("SFAS No. 123") and supercedes APB
Opinion No. 25, "Accounting for Stock Issued to Employees." SFAS No. 123R
requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the financial statements based on their fair
values beginning with the first annual reporting period that begins after June
15, 2005, with early adoption encouraged. The pro forma disclosures previously
permitted under SFAS No. 123 no longer will be an alternative to financial
statement recognition. The Company is required to adopt SFAS No. 123R no later
than July 1, 2005. Under SFAS No. 123R, Enzon must determine the appropriate
fair value model to be used for valuing share-based payments, the amortization
method for compensation cost and the transition method to be used at date of
adoption. The transition methods include prospective and retroactive adoption
options. Under the retroactive option, prior periods may be restated either as
of the beginning of the year of adoption or for all periods presented. The
prospective method requires that compensation expense be recorded for all
unvested stock options and restricted stock at the beginning of the first
quarter of adoption of SFAS No. 123R, while the retroactive methods would record
compensation expense for all unvested stock options and restricted stock
beginning with the first period restated. The Company is evaluating the
requirements of SFAS No. 123R and expects that the adoption of SFAS No. 123R
will have a material impact on its consolidated results of operations and
earnings per share. The Company has not yet determined the method of adoption or
the effect of adopting SFAS No. 123R, and has not determined whether the
adoption will result in amounts that are similar to the current pro forma
disclosures under SFAS No. 123.

       In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets--An Amendment of APB Opinion No. 29, Accounting for Nonmonetary
Transactions" ("SFAS No. 153"). SFAS No. 153 eliminates the exception from fair
value measurement for nonmonetary exchanges of similar productive assets in
paragraph 21(b) of APB Opinion No. 29, "Accounting for Nonmonetary
Transactions," and replaces it with an exception for exchanges that do not have
commercial substance. SFAS No. 153 specifies that a nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. SFAS No. 153 is effective for
the fiscal periods beginning after June 15, 2005 and is required to be adopted
by us beginning on July 1, 2005. The Company is currently evaluating the effect
that the adoption of No. 153 will have on its consolidated results of operations
and financial condition but does not expect it to have a material impact.

         In March 2004, the Financial Accounting Standards Board's (FASB)
Emerging Issues Task Force (EITF) released Issue 03-01, "Meaning of Other Than
Temporary Impairment", which addressed other-than-temporary impairment for
certain debt and equity investments. Various disclosure requirements of Issue
03-01 had been finalized previous to issuance and were required as of June 30,
2004. The recognition and measurement requirements of Issue 03-01, and other
disclosure requirements not already implemented, were effective for periods
beginning after June 15, 2004. In September 2004, the FASB staff issued FASB
Staff Position (FSP) EITF 03-1-1, which delayed the effective date for certain
measurement and recognition guidance contained in Issue 03-1. The FSP requires
the application of pre-existing "other-than-temporary" guidance during the
period of delay until a final consensus is reached. The disclosure requirements
set forth in Issue 03-01 were not delayed as a result of the issued FSP. The
Company's management does not anticipate the issuance of the final consensus
will have a material impact on financial condition, the results of operations,
or liquidity.


                                       15
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

(15) INEX AGREEMENT

         In March 2005, the Company terminated the agreements entered into with
Inex Pharmaceuticals, Inc. in January 2004 regarding the development and
commercialization of Inex's proprietary oncology product MARQIBO(R) (vincristine
sulfate liposomes injection). Under the terminated MARQIBO Agreements, the
Company shared the costs of clinical development with Inex and received the
exclusive commercialization rights for MARQIBO for all indications in the United
States, Canada and Mexico. In January 2005, the United States Food and Drug
Administration (the "FDA") provided an action letter detailing MARQIBO as "not
approvable" under the FDA's accelerated approval regulations for relapsed
aggressive non-Hodgkin's lymphoma. The FDA's response also recommended that
additional randomized controlled studies would need to be conducted prior to
re-applying for approval. After a strategic analysis of the FDA's
recommendation, required investment, development timeframe, and associated
development risks, the Company concluded it would be in Enzon's best interest to
redirect this investment to pursue other opportunities. In connection with the
termination, Enzon paid Inex a final payment of $5.0 million in satisfaction of
all of the Company's financial obligations under the MARQIBO Agreements,
including development expenses and milestone payments. The payment was charged
to research and development in the Company's Condensed Consolidated Statement of
Operations.

(16) SUBSEQUENT EVENTS

         Effective April 21, 2005, the Company's executive vice president,
finance and chief financial officer (the "CFO") resigned, for personal reasons.
In connection with the CFO's resignation, the Company entered into a Separation
Agreement effective as of April 21, 2005.

         Pursuant to the Separation Agreement, the CFO will receive a cash
payment equal to his annual base salary, the pro rata amount of his annual
target bonus (which is 50% of his base salary) for fiscal year 2005, and his
annual target bonus for fiscal year 2006. In addition, the period of time he has
to exercise certain of his options is extended to 18 months; the vesting of some
of his options and restricted stock was accelerated; and he will be reimbursed
for his medical insurance premiums for up to 36 months. The Company will record
a severance charge in the quarter ending June 30, 2005.

         Based upon increasingly competitive conditions in the intravenous
antifungal market and the recent discontinuance of certain development projects
in the Company's research and development pipeline, Enzon is realigning its cost
structure through a restructuring. The Company expects to incur charges of $1.5
million to $2.5 million during the quarter ending June 30, 2005. These costs,
all of which involve future cash expenditures, are comprised primarily of
employee termination benefits.




                                       16
<PAGE>

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

LIQUIDITY AND CAPITAL RESOURCES

         Total cash reserves, which include cash, cash equivalents, short-term
investments and marketable securities, were $210.0 million as of March 31, 2005,
as compared to $186.2 million as of June 30, 2004. The increase is primarily due
to net cash provided by operating activities and proceeds from the liquidation
of a portion of the shares of NPS Pharmaceuticals, Inc. common stock that we
own. We invest our excess cash primarily in United States government-backed
securities and investment-grade corporate debt securities and auction rate
securities.

         During the nine months ended March 31, 2005, net cash provided by
operating activities was $12.8 million, compared to $8.5 million for the nine
months ended March 31, 2004. Net cash provided by operations was principally due
to non-cash charges included in our net loss of $4.0 million for the nine months
ended March 31, 2005. Non-cash charges totaled $25.2 million and were primarily
attributable to depreciation and amortization of $17.0 million, losses on sales
of investments of $3.5 million, $429,000 for restricted stock grants,
amortization of bond premium/discount of $2.0 million, a loss on our equity
collar arrangement related to our investment in NPS common stock of $0.8
million, and amortization of debt issue costs of $1.4 million. Non-cash charges
were partially offset by $8.3 million in changes in deferred income taxes and
operating assets and liabilities.

         Cash used in investing activities totaled $49.4 million for the nine
months ended March 31, 2005 compared to cash provided by investing activities of
$18.0 million for the nine months ended March 31, 2004. Cash used in investing
activities during the nine months ended March 31, 2005, consisted of $2.2 of
capital expenditures and investments in marketable securities of $136.5 million,
offset by $74.0 million in proceeds from the sale of marketable securities and
$15.3 million in proceeds from the liquidation of a portion of our investment in
NPS common stock.

         As of March 31, 2005, we had $400.0 million of convertible subordinated
notes outstanding. The notes bear interest at an annual rate of 4.5%. Interest
is payable on January 1 and July 1 of each year. Accrued interest on the notes
was $4.5 million as of March 31, 2005. The holders may convert all or a portion
of the notes into common stock at any time on or before July 1, 2008. The notes
are convertible into our common stock at a conversion price of $70.98 per share,
subject to adjustment in certain events. The notes are subordinated to all
existing and future senior indebtedness. We may redeem any or all of the notes
at specified redemption prices, plus accrued and unpaid interest to the day
preceding the redemption date. As of March 31, 2005 the redemption price of the
notes is 102.571% of the principal amount. The notes will mature on July 1, 2008
unless converted earlier, redeemed at our option or redeemed at the option of
the note holder upon a fundamental change, as described in the indenture for the
notes. Neither we nor any of our subsidiaries are subject to any financial
covenants under the indenture. In addition, neither we nor any of our
subsidiaries are restricted under the indenture from paying dividends, incurring
debt, or issuing or repurchasing our securities.

         In August 2003, we entered into a zero cost protective collar
arrangement with a financial institution to reduce the exposure associated with
1.5 million shares of NPS common stock, which we received as part of a merger
termination agreement with NPS. During the nine months ended March 31, 2005 we
received proceeds of $15.0 million related to the maturation of two portions of
the derivative. The remainder of the collar will mature on two separate maturity
dates in May 2005 and August 2005, at which time we will receive the proceeds
from the sale of the securities which we estimate after taking into account the
effect of the collar will be in the range of $15.0 million to $19.0 million. The
amount due at each maturity date will be determined based on the market value of
NPS common stock on such maturity date. The contract requires us to maintain a
minimum cash balance of $30.0 million and additional collateral of up to $10.0
million, as defined under certain circumstances with the financial institution.
The derivative is subject to certain adjustments in the event we receive a
dividend from NPS.

         Our current sources of liquidity are our cash and cash equivalents,
interest earned on such cash and cash equivalents, short-term investments,
marketable securities, sales of ADAGEN(R), ONCASPAR(R), DEPOCYT(R) and
ABELCET(R), royalties earned, which are primarily related to sales of
PEG-INTRON(R), and contract manufacturing revenue. In addition, we intend to
sell our remaining position in NPS as discussed above. Based upon our currently
planned research and development activities and related costs and our current
sources of liquidity, we anticipate our current cash reserves and expected cash
flow from operations will be sufficient to meet our capital, debt service and
operational requirements for the foreseeable future.


                                       17
<PAGE>

         While we believe that our cash, cash equivalents and investments will
be adequate to satisfy our capital needs for the foreseeable future, we may seek
additional financing, such as through future offerings of equity or debt
securities or agreements with collaborators with respect to the development and
commercialization of products, to fund future operations and potential
acquisitions. We cannot assure you, however, that we will be able to obtain
additional funds on acceptable terms, if at all.

OFF-BALANCE SHEET ARRANGEMENTS

         As part of our ongoing business, we do not participate in transactions
that generate relationships with unconsolidated entities or financial
partnerships, such as entities often referred to as structured finance or
special purpose entities ("SPE"), which would have been established for the
purpose of facilitating off-balance sheet arrangements or other contractually
narrow limited purposes. As of March 31, 2005, we were not involved in any SPE
transactions.

CONTRACTUAL OBLIGATIONS

         Our major outstanding contractual obligations relate to our operating
leases, inventory purchase commitments, convertible debt, and license agreements
with collaborative partners.

         In March 2005, we terminated the agreements we entered into with Inex
Pharmaceuticals, Inc. in January 2004 regarding the development and
commercialization of Inex's proprietary oncology product MARQIBO(R) (vincristine
sulfate liposomes injection). Under the terminated MARQIBO Agreements, we shared
the costs of clinical development with Inex and received the exclusive
commercialization rights for MARQIBO for all indications in the United States,
Canada and Mexico. In January 2005, the United States Food and Drug
Administration (the "FDA") provided an action letter detailing MARQIBO as "not
approvable" under the FDA's accelerated approval regulations for relapsed
aggressive non-Hodgkin's lymphoma. The FDA's response also recommended that
additional randomized controlled studies would need to be conducted prior to
re-applying for approval. After a strategic analysis of the FDA's
recommendation, required investment, development timeframe, and associated
development risks, we concluded it would be in the Company's best interest to
redirect this investment to pursue other opportunities. In connection with the
termination, we paid Inex a final payment of $5.0 million in satisfaction of all
of our financial obligations under the MARQIBO Agreements, including development
expenses and milestone payments. The payment was charged to research and
development in our Condensed Consolidated Statement of Operations.

         Since June 30, 2004, there have been no other material changes with
respect to our contractual obligations as disclosed under Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Contractual Obligations in our annual report on Form 10-K/A, (Amendment No. 2)
for the year ended June 30, 2004.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2005 AND 2004

         Revenues. Total revenues for the three months ended March 31, 2005 were
$39.2 million, as compared to $44.4 million for the three months ended March 31,
2004. The components of revenues are product sales, manufacturing revenue,
royalties we earn on the sale of our products by others and contract revenue.

         Net product sales decreased by 24% to $21.2 million for the three
months ended March 31, 2005, as compared to $28.0 million for the three months
ended March 31, 2004. The decrease in sales was due to decreased sales of
ABELCET. Sales of ABELCET in North America decreased by $8.5 million to $9.1
million for the three months ended March 31, 2005, as compared to $17.6 million
for the three months ended March 31, 2004 due to increased competition in the
intravenous antifungal market. Sales of DEPOCYT increased by $483,000 to $1.8
million for the three months ended March 31, 2005 as compared to $1.4 million
for the three months ended March 31, 2004. DEPOCYT's growth over the prior year
was primarily attributable to increased sales and marketing efforts, as well as
a higher weighted average price. Sales of ONCASPAR increased by $652,000 to $5.5
million for the three months ended March 31, 2005 from $4.9 million for the
three months ended March 31, 2004. The increase in sales of ONCASPAR over the
prior year was primarily driven by a higher weighted average price. Sales of
ADAGEN increased by $644,000 for the three months ended March 31, 2005 to $4.8
million as compared to $4.1 million for the three months ended March 31, 2004
due to the timing of shipments. Historically, quarterly sales of ADAGEN
experience volatility because of the small number of patients on therapy.


                                       18
<PAGE>

         Manufacturing revenue for the three months ended March 31, 2005
decreased by $676,000 to $4.4 million, as compared to $5.0 million for the
comparable period of the prior year, due to reduced orders from our contract
manufacturing customers. Manufacturing revenue is related to the manufacture and
sale of ABELCET for the international market and other manufacturing revenue.

         Royalties for the three months ended March 31, 2005, increased by $2.1
million to $13.2 million as compared to $11.1 million for the three months ended
March 31, 2004. Royalties are principally comprised of royalties from sales of
PEG-INTRON, which is marketed by Schering-Plough Corporation. The increase in
royalties over the prior year was primarily due to the launch of PEG-INTRON
combination therapy in Japan in December 2004. Currently, PEG-INTRON combination
therapy is the only pegylated interferon-based combination therapy approved in
Japan.

         Due to the December 2004 launch of PEG-INTRON in Japan, we believe
royalties from sales of PEG-INTRON may continue to increase over prior year
levels in the near term. In markets outside of Japan, PEG-INTRON combination
therapy competes directly with another pegylated interferon-based combination
therapy in a highly competitive market. Further, Schering-Plough has reported
that the overall hepatitis C market has been contracting. We cannot assure you
that these contracting and competitive market conditions will not offset the
positive impact of PEG-INTRON in Japan or that any particular sales levels of
PEG-INTRON will be achieved or maintained.

         We expect North American sales of ABELCET may continue to be negatively
impacted by the increasingly competitive conditions in the intravenous
antifungal market, namely from the introduction of newer agents from Pfizer,
Merck, and Fujisawa, as well as increased pricing pressure in the market for
lipid formulations of amphotericin B. We cannot assure you that any particular
sales levels of ABELCET, ADAGEN, DEPOCYT, and ONCASPAR will be achieved or
maintained.

         Contract revenues for the three months ended March 31, 2005 were
$451,000 as compared to $248,000 for the three months ended March 31, 2004. The
increase was principally due to revenue related to an agreement with Pharmagene
plc to apply our PEGylation technology to engineer a long-acting version of
Pharmagene's drug candidate, PGN0052.

         During the three months ended March 31, 2005, we had export sales and
royalties on export sales of $12.4 million, of which $8.9 million were in
Europe. Export sales and royalties recognized on export sales for the three
months ended March 31, 2004 were $9.2 million, of which $7.5 million were in
Europe.

         Cost of product sales and manufacturing revenue. Cost of product sales
and manufacturing revenue, as a percentage of net product sales and
manufacturing revenue, improved to 35% for the three months ended March 31, 2005
as compared to 38% for the same period last year. The decrease was due to
reduced ABELCET costs, as well as improved margins for ADAGEN, ONCASPAR, and
DEPOCYT. For each of the three month periods ended March 31, 2005 and March 31,
2004, we have included $1.1 million in cost of product sales and manufacturing
revenue, which related to the amortization of intangible assets acquired in
connection with the ABELCET acquisition during November 2002.

         Research and development. Research and development expenses consist
primarily of salaries and benefits; patent filing fees; contractor and
consulting fees, principally related to clinical and regulatory projects; costs
related to research and development partnerships or licenses; drug supplies for
clinical and preclinical activities; as well as other research supplies and
allocated facilities charges.

         For the three months ended March 31, 2005, research and development
expenses increased by $1.9 million to $12.7 million as compared to $10.8 million
for the three months ended March 31, 2004. The increase in research and
development expenses was primarily due to increased costs related to MARQIBO of
$3.3 million, which included the impact of a $5.0 million payment made to Inex
Pharmaceuticals Corporation in March 2005 related to the termination of our
partnership for the development and commercialization of MARQIBO. The increased
research and development costs related to MARQIBO were partially offset by
reduced expenditures of approximately $1.4 million, which were primarily due to
the discontinuation of certain research and development programs, including our
clinical development program for Pegamotecan, which was discontinued in February
2005.


                                       19
<PAGE>

         Selling, general and administrative. Selling expenses consist primarily
of salaries and benefits for our sales and marketing personnel, as well as other
commercial expenses and marketing programs to support our sales force. General
and administrative expenses consist primarily of salaries and benefits; outside
professional services for accounting, audit, tax, legal, and investor
activities; and allocations of facilities costs.

         For the three months ended March 31, 2005 selling, general and
administrative expenses increased by $1.2 million to $13.7 million, as compared
to $12.5 million for the three months ended March 31, 2004. The increase was
primarily attributable to increased sales and marketing costs of approximately
$792,000 and increased general and administrative costs of approximately
$366,000. The increase in sales and marketing costs was comprised of a $1.2
million increase in costs related to our oncology sales operations, a $441,000
increase in costs related to MARQIBO, and an $808,000 decrease in costs related
to our hospital-based sales operations. The increase in general and
administrative costs was primarily attributable to an increase of $242,000 in
legal and accounting fees and a net increase of $124,000 in other costs.

         Based on the increasingly competitive conditions in the intravenous
antifungal market, as previously discussed, as well as the discontinuation of
certain research and development projects, in April 2005 we reported that we are
realigning our cost structure through a restructuring. As a result of the
restructuring, we expect to incur charges of $1.5 million to $2.5 million during
the quarter ending June 30, 2005. These costs all involve cash expenditures and
are comprised primarily of employee termination benefits.

         Amortization. Amortization expense is related to intangible assets
acquired in connection with the ABELCET acquisition in November 2002.
Amortization expense remained unchanged at $3.4 million for each of the three
month periods ended March 31, 2005 and 2004. A portion of amortization expense
is classified in cost of product sales and manufacturing revenue, as discussed
above. Amortization of intangible assets is calculated on a straight-line basis
over the estimated lives of the assets, which range from 3 to 15 years.

         Acquired in-process research and development. Acquired in-process
research and development for the three months ended March 31, 2004 of $12.0
million was due to an up-front payment to Inex related to the execution of a
strategic partnership and related agreements entered into with Inex related to
MARQIBO (a development-stage product). As previously discussed, this partnership
was terminated in March 2005.

         Other income (expense) for the three months ended March 31, 2005 was an
expense of $5.4 million, as compared to income of $11.4 million for the three
months ended March 31, 2004. Other income (expense) includes: net investment
income, interest expense, and other, net.

         Net investment income decreased by $10.5 million to $1.1 million for
the three months ended March 31, 2005 compared with $11.6 million for the three
months ended March 31, 2004. The decrease was principally due to the prior
year's sale of 880,075 shares of Nektar Therapeutics common stock, which
resulted in a net gain of approximately $11.0 million in the three months ended
March 31, 2004.

         Interest expense was $5.0 million for each of the three months ended
March 31, 2005 and 2004. Interest expense is related to $400.0 million in 4.5%
convertible subordinated notes, which were outstanding for each of the three
month periods ended March 31, 2005 and 2004.

         Other, net is primarily related to the 1.5 million shares of NPS common
stock we received under a June 2003 merger termination agreement and a financial
instrument we formed to reduce our exposure to the change in fair value
associated with such shares, specifically a zero cost protective collar
arrangement (the "Collar.") For the three months ended March 31, 2005, other,
net was an expense of $1.6 million, as compared to income of $4.8 million for
the three months ended March 31, 2004. During the three months ended March 31,
2005, we recognized (i)a realized loss of $4.0 million related to the maturation
of a portion of the Collar and the sale of the underlying share (ii) an
unrealized gain of $2.4 million related to change in the fair value of the
Collar. For a more detailed description of our Merger Termination Agreement with
NPS and the Collar see Note 13 to the Notes to the accompanying Consolidated
Financial Statements - Derivative Instruments.

         Other income (expense) was $4.8 million for the three months ended
March 31, 2003. During the three months ended March 31, 2004, we recognized (i)
a realized gain of $2.0 million related to the sale and repurchase of 375,000
shares of NPS common stock, and (ii) an unrealized gain of $2.8 million related
to change in the fair value of the Collar.

         Income taxes. During the three months ended March 31, 2005, we
recognized a tax benefit of approximately $1.8 million, as compared to a tax
benefit of $3.4 million for the three months ended March 31, 2004. We recognized
a tax benefit for the three months ended March 31, 2005 at an estimated annual
effective tax rate of 37%, which is based on the projected income tax benefit
and taxable loss for the fiscal year ending June 30, 2005.


                                       20
<PAGE>

         During the three months ended March 31, 2004, the Company recorded a
net tax benefit of approximately $3.4 million related primarily to the reversal
of a deferred tax asset valuation allowance for the write-down in a prior year
of Enzon's equity investment in Nektar Therapeutics, which was sold during the
quarter ended March 31, 2004. The sale resulted in a gain of approximately $11.0
million. The benefit was also due to the reduction of Enzon's estimated taxable
income and effective tax rate to 29% as compared to 35% used in previous
quarters and a payment during the three months ended March 31, 2004 of $12.0
million to Inex Pharmaceuticals related to acquired in-process research and
development.

NINE MONTHS ENDED MARCH 31, 2005 AND 2004

         Revenues. Total revenues for the nine months ended March 31, 2005 were
$122.6 million, as compared to $126.7 million for the nine months ended March
31, 2004. The components of revenues are product sales, manufacturing revenue,
royalties we earn on the sale of our products by others and contract revenues.

         Net product sales decreased by 6% to $75.7 million for the nine months
ended March 31, 2005, as compared to $80.7 million for the nine months ended
March 31, 2004. The decrease in sales was due to decreased sales of ABELCET(R).
Sales of ABELCET in North America decreased by $10.7 million to $39.9 million
for the nine months ended March 31, 2005, as compared to $50.6 million for the
nine months ended March 31, 2004 due to weaker demand for the product as a
result of increased competition in the intravenous antifungal market. Sales of
DEPOCYT increased by $1.8 million to $5.8 million for the nine months ended
March 31, 2005 as compared to $4.0 million for the nine months ended March 31,
2004. DEPOCYT'S growth over the prior year was primarily attributable to
increased sales and marketing efforts and to a lesser extent a higher weighted
average price. Sales of ONCASPAR increased by $2.0 million to $15.3 million for
the nine months ended March 31, 2005, as compared to $13.3 million for the nine
months ended March 31, 2004. The increase in sales of ONCASPAR over the prior
year was due to a higher weighted average price as well as increased sales and
marketing efforts. Sales of ADAGEN increased by $1.9 million to $14.7 million
for the nine months ended March 31, 2005 as compared to $12.8 million for the
nine months ended March 31, 2004 due to an increase in the number of patients
receiving ADAGEN therapy and the timing of shipments.

         Manufacturing revenue for the nine months ended March 31, 2005
increased by $3.5 million to $12.3 million, as compared to $8.8 million for the
comparable period of the prior year due to the timing of orders from our
contract manufacturing customers. Manufacturing revenue is related to the
manufacture and sale of ABELCET for the international market and other
manufacturing revenue.

         Royalties for the nine months ended March 31, 2005, decreased to $33.4
million as compared to $36.5 million for the nine months ended March 31, 2004.
The decrease was primarily due to decreased sales of PEG-INTRON by
Schering-Plough, our marketing partner, due to competitive pressure from another
pegylated alpha interferon product and contracting market conditions. The
competitive and contracting market conditions were partially offset by the
launch of PEG-INTRON combination therapy in Japan in December 2004.

         Contract revenues for the nine months ended March 31, 2005 increased by
$394,000 to $1.2 million as compared to $769,000 for the nine months ended March
31, 2004 principally due to revenue related to an agreement we entered into with
Pharmagene to apply our PEGylation technology to engineer a long-acting version
of Pharmagene's drug candidate, PGN0052.

         During the nine months ended March 31, 2005, we had export sales and
royalties on export sales of $34.9 million, of which $26.0 million were in
Europe. Export sales and royalties recognized on export sales for the prior year
were $28.0 million, of which $23.4 million were in Europe.

         Cost of product sales and manufacturing revenue. Cost of product sales
and manufacturing revenue, as a percentage of net sales and manufacturing
revenue, decreased to 37% for the nine months ended March 31, 2005 compared to
39% for the nine months ended March 31, 2004 due to lower ABELCET costs. For
each of the nine month periods ended March 31, 2005 and March 31, 2004, we have
included $3.4 million in cost of product sales and manufacturing revenue, which
related to the amortization of intangible assets acquired in connection with the
ABELCET acquisition during November 2002.

         Research and development. Research and development expenses increased
by $6.7 million to $31.4 million for the nine months ended March 31, 2005, as
compared to $24.7 million for the nine months ended March 31, 2004. The increase
in research and development expenses was primarily due to $6.2 million in costs
related to MARQIBO, which included the impact of a $5.0 million payment made to
Inex in March 2005 related to the termination of our partnership, and an
increase of $2.0 million in employee compensation expenses. These increases were
partially offset by a $1.0 million decrease in costs due to the discontinuation
of research and development programs, including our clinical development program
for Pegamotecan, which was discontinued in February 2005.


                                       21
<PAGE>

         Selling, general and administrative. Selling, general and
administrative expenses increased by $4.4 million to $39.6 million for the nine
months ended March 31, 2005, as compared to $35.2 million for the nine months
ended March 31, 2004. The increase was primarily attributable to a $4.5 million
increase in sales and marketing costs, which was comprised of a $3.4 million
increase in costs related to our oncology sales operations, a $1.3 million
increase in costs related to MARQIBO, and a $300,000 decrease in costs related
to our hospital-based sales operations.

         Amortization. Amortization expense remained unchanged at $10.1 million
for the nine months ended March 31, 2005 and 2004. Amortization expense for both
periods relates to intangible assets acquired in connection with the ABELCET
acquisition during November 2002. A portion of amortization is classified in
cost of product sales and manufacturing revenue. Amortization of intangible
assets is calculated on a straight-line basis over the estimated lives of the
assets, which range from 3 to 15 years.

         Acquired in-process research and development. Acquired in-process
research and development was $12.0 million for the nine months ended March 31,
2004 due to an up-front payment, which we made in January 2004 for the execution
of an agreement with Inex for the development and commercialization of MARQIBO.
As previously discussed, this partnership was terminated in March 2005.

         Other income (expense). Other income (expense) for the nine months
ended March 31, 2005 was an expense of $15.5 million, as compared to an expense
of $4.2 million for the nine months ended March 31, 2004. Other income (expense)
includes: net investment income, interest expense, and other, net.

         Net investment income for the nine months ended March 31, 2005
decreased to $2.9 million from $12.7 million for the nine months ended March 31,
2004. The decrease was principally due to the prior year's sale of 880,075
shares of Nektar Therapeutics common stock, which resulted in a net gain of
approximately $11.0 million recorded in the nine months ended March 31, 2004.
This decrease was offset in part by a $1.2 million increase in interest income
for the nine months ended March 31, 2005, as compared to the nine months ended
March 31, 2004.

         Interest expense was $14.9 million for each of the nine months ended
March 31, 2005 and 2004. Interest expense is related to $400.0 million in 4.5%
convertible subordinated notes, which were outstanding for both periods.

         Other, net is primarily related to the 1.5 million shares of NPS common
stock we received under a June 2003 merger termination agreement and a financial
instrument we formed to reduce our exposure to the change in fair value
associated with such shares, specifically a zero cost protective collar
arrangement (the "Collar.") For the nine months ended March 31, 2005, other, net
was an expense of $3.5 million, as compared to other income of $2.0 million for
the nine months ended March 31, 2004. During the nine months ended March 31,
2005, we recognized (i) a realized loss of $578,000 related to the sale and
repurchase of 375,000 shares of NPS common stock and (ii) an unrealized gain of
$3.7 million related to change in the fair value of the Collar and (iii) a
realized loss of $7.1 million related to the maturation of a portion of the
Collar and the sale of the underlying shares. There was $0.5 million of other
miscellaneous non-operating income for the nine months ended March 31, 2005. For
a more detailed description of our Merger Termination Agreement with NPS and the
Collar see Note 13 to the Notes to the accompanying condensed consolidated
financial statements - Derivative Instruments.

         During the nine months ended March 31, 2004, we recognized (i) a
realized gain of $3.2 million related to the sale and repurchase of 375,000
shares of NPS common stock, (ii) an unrealized loss of $7.5 million related to
change in the fair value of the Collar, and (iii) a realized gain of $2.3
million related to the maturation of a portion of the Collar and the sale of the
underlying shares.

         Income taxes. During the nine months ended March 31, 2005 we recognized
a tax benefit of $2.3 million compared to a tax benefit of $3.6 million, for the
nine months ended March 31, 2004. We recognized a tax benefit for the nine
months ended March 31, 2005 at an estimated annual effective tax rate of 37%,
which is based on the projected income tax benefit and taxable loss for the
fiscal year ending June 30, 2005.

         During the nine months ended March 31, 2004, the Company recorded a net
tax benefit of approximately $3.6 million related primarily to the reversal of a
deferred tax asset valuation allowance for the write-down in a prior year of
Enzon's equity investment in Nektar Therapeutics, which was sold during the nine
months ended March 31, 2004. The sale resulted in a gain of approximately $11.0
million. In addition, during the nine months ended March 31, 2004 the Company
recorded $832,000 tax benefit relating to the derivative instrument as described
in note 13. The benefit was also due to the reduction of Enzon's estimated
taxable income and effective tax rate to 29% as compared to 35% used in previous
quarters and a payment during the three months ended March 31, 2004 of $12.0
million to INEX Pharmaceuticals related to acquired in-process research and
development.

                                       22
<PAGE>

CRITICAL ACCOUNTING POLICIES

         In December 2001, the U.S. Securities and Exchange Commission ("SEC")
requested that all registrants discuss their most "critical accounting policies"
in Management's Discussion and Analysis of Financial Condition and Results of
Operations. The SEC indicated that a "critical accounting policy" is one which
is both important to the portrayal of a company's financial condition and
results of operations and requires management's most difficult, subjective or
complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain.

         Our consolidated financial statements are presented in accordance with
accounting principles that are generally accepted in the United States. All
professional accounting standards effective as of March 31, 2005 have been taken
into consideration in preparing the consolidated financial statements. The
preparation of the consolidated financial statements requires estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues,
expenses and related disclosures including those related to contingent assets
and liabilities. Some of those estimates are subjective and complex, and,
consequently, actual results could differ from those estimates. The following
accounting policies have been highlighted as significant because changes to
certain judgments and assumptions inherent in these policies could affect our
consolidated financial statements.

         Revenue from product sales and manufacturing revenue is recognized upon
passage of title and risk of loss to customers. This is generally at the time
products are shipped to customers. Provisions for discounts or chargebacks,
rebates and sales incentives to customers, and returns and other adjustments are
provided for in the period the related sales are recorded. Historical data is
readily available and reliable, and is used for estimating the amount of the
reduction in gross sales.

         The majority of our net product sales are to wholesale distributors who
resell the products to the end customers. We provide chargeback payments to
these distributors based on their sales to members of buying groups at prices
determined under a contract between Enzon and the member. Administrative fees
are paid to buying groups based on the total amount of purchases by their
members. Chargeback amounts are based upon the volume of purchases multiplied by
the difference between the wholesaler acquisition cost and the contract price
for a product. We estimate the amount of the chargeback that will be paid using
historical trends, adjusted for current changes, and record the amounts as a
reduction to accounts receivable and a reduction of gross sales when we record
the sale of the product. The settlement of the chargebacks generally occurs
within three months after the sale to the wholesaler. We regularly analyze the
historical chargeback trends and make adjustments to recorded reserves for
changes in trends.

         In addition, state agencies, which administer various programs, such as
the U.S. Medicaid and Medicare program, also receive rebates. Medicaid rebates
and administrative fees are recorded as a liability and a reduction of gross
sales when we record the sale of the product. Medicaid rebates are typically
paid within six to nine months after sale. In determining the appropriate
accrual amount we consider our historical Medicaid rebate and administration fee
payments by product as a percentage of our historical sales as well as any
significant changes in sales trend. Current Medicaid rebate laws and
interpretations, and the percentage of our products that are sold to Medicaid
patients are also evaluated. Factors that complicate the rebate calculations are
the timing of the average manufacturer pricing computation, the estimated lag
time between sale and payment of a rebate and the level of reimbursement by
state agencies.


                                       23
<PAGE>

         The following is a summary of reductions of gross sales accrued as of
March 31, 2005 and June 30, 2004 (the end of our last fiscal year):

<TABLE>
<CAPTION>

                                                          March 31, 2005          June 30, 2004
                                                         ---------------         --------------
     <S>                                                 <C>                     <C>
     Accounts Receivable Reductions
          Chargebacks                                         $6,812                 $7,802
          Cash Discounts                                         183                    414
          Other (including returns)                            1,407                  1,323
                                                         ---------------         --------------
                Total                                         $8,402                 $9,539
                                                         ---------------         --------------
     Accrued Liabilities
           Medicaid Rebates                                   $2,299                 $2,011
           Administrative Fees                                   425                    640
                                                         ---------------         --------------
                Total                                         $2,724                 $2,651
                                                         ---------------         --------------
</TABLE>


         There were no revisions to the estimates for gross to net sales
adjustments that would be material to income from operations for the three and
nine months ended March 31, 2005 and 2004.

         Royalties under our license agreements with third parties are
recognized when earned through the sale of the product by the licensee net of
any estimated future credits, chargebacks, sales discount rebates and refunds.

         Contract revenues are recorded as the earnings process is completed.
Non-refundable milestone payments that represent the completion of a separate
earnings process are recognized as revenue when earned, upon the occurrence of
contract-specified events and when the milestone has substance. Non-refundable
payments received upon entering into licenses and other collaborative agreements
where we have continuing involvement are recorded as deferred revenue and
recognized ratably over the estimated service period.

         Under the asset and liability method of Statement of Financial
Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes", deferred
tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between financial statement carrying
amounts of existing assets and liabilities and their respective tax bases.
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 recovered or settled. A valuation allowance on
net deferred tax assets is provided for when it is more likely than not that
some portion or all of the deferred tax assets will not be realized. We have
significant net deferred tax assets, primarily related to net operating loss and
other carryforwards. Events, such as a sustained decline in the Company's
product revenues and/or increased expenses could result in a revision to the
Company's projected future taxable income, and accordingly, the need for a
valuation allowance based upon the ultimate realizability of its net operating
loss carryforwards, research and development tax credits and other deferred tax
assets. The Company's federal and state operating loss carryforwards will begin
to expire in 2009 and 2006, respectively, and the federal and state research and
development credits will begin to expire in 2006 and 2021, respectively. The
Company will continue to assess the need for such valuation allowance based on
analyses of operating results and projections of future operating performance of
the Company.

         We assess the carrying value of our cost method investments in
accordance with SFAS No. 115 "Accounting for Certain Investments in Debt and
Equity" and SEC Staff Accounting Bulletin ("SAB") No. 59 "Accounting for
Non-current Marketable Equity Securities". An impairment write-down is recorded
when a decline in the value of an investment is determined to be
other-than-temporary. These determinations involve a significant degree of
judgment and are subject to change as facts and circumstances change.

         In accordance with the provisions of SFAS No. 142 "Goodwill and other
Intangible Assets", goodwill and intangible assets determined to have an
indefinite useful life acquired in a purchase business combination are not
subject to amortization, are tested at least annually for impairment, and are
tested for impairment more frequently if events and circumstances indicate that
the asset might be impaired. We completed our annual goodwill impairment test on
May 31, 2004, which indicated that goodwill was not impaired. An impairment loss
is recognized to the extent that the carrying amount exceeds the asset's fair
value. Because the Company is in one reporting unit, this determination is made
at the Company level and consists of two steps. First, we determine the fair
value of our reporting unit and compare it to its carrying amount. Second, if
the carrying amount of its reporting unit exceeds our fair value, an impairment
loss is recognized for any excess of the carrying amount of the reporting unit's
goodwill over the implied fair value of that goodwill. The implied fair value of
goodwill is determined by allocating the fair value of the reporting unit in a
manner similar to a purchase price allocation, in accordance with SFAS No. 141,
"Business Combinations". The residual fair value after this allocation is the
implied fair value of our goodwill. Recoverability of amortizable intangible
assets is determined by comparing the carrying amount of the asset to the future
undiscounted net cash flow to be generated by the asset. The evaluations involve
amounts that are based on management's best estimate and judgment. Actual
results may differ from these estimates. If recorded values are less than the
fair values, no impairment is indicated. SFAS No. 142 also requires that
intangible assets with estimated useful lives be amortized over their respective
estimated useful lives.


                                       24
<PAGE>

         We apply the intrinsic value-based method of accounting prescribed by
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees", and related interpretations, in accounting for our fixed plan
stock options. As such, compensation expense would be recorded on the date of
grant of options to employees and members of the Board of Directors only if the
current market price of the underlying stock exceeded the exercise price. SFAS
No. 123, "Accounting for Stock-Based Compensation", established accounting for
stock-based employee compensation plans. As allowed by SFAS No. 123, we have
elected to continue to apply the intrinsic value-based method of accounting
described above, and have adopted the disclosure requirements of SFAS No. 123,
as amended in December 2004.

         When the exercise price of employee or director stock options is less
than the fair value of the underlying stock on the grant date, we record
deferred compensation for the difference and amortize this amount to expense
over the vesting period of the options. Options or stock awards issued to
non-employees and consultants are recorded at their fair value as determined in
accordance with SFAS No. 123 and EITF No. 96-18, "Accounting for Equity
Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services", and recognized over the related
vesting period.



                                       25
<PAGE>

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS (CAUTIONARY STATEMENTS UNDER
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995)

         Management's Discussion and Analysis of Financial Condition and Results
of Operations contains "forward-looking statements" within the meaning of the
Securities Litigation Reform Act of 1995. Forward-looking statements relate to
expectations or forecasts of future events. These statements use words such as
"anticipate," "believe," "could," "estimate," "expect," "forecast," "project,"
"intend," "plan," "potential," "will," and other words and terms of similar
meaning in connection with a discussion of potential future events or
circumstances or future operating or financial performance. You can also
identify forward-looking statements by the fact that they do not relate strictly
to historical or current facts.

         Specific examples of such forward looking statements include statements
in this report relating to the potential impact on our revenues of
Schering-Plough's launch of PEG-INTRON in Japan, the potential impact on our
ability to sustain or grow our ABELCET revenues in light of continuing
competitive and pricing pressure in the intravenous antifungal market, the
future sales performance of our other products, the potential impact of the
manufacturing and stability problems with ONCASPAR we continue to experience,
the performance of our protective collar arrangement relating to the shares of
NPS common stock we hold, the continued sufficiency of our capital resources and
our ability to access the capital markets in the future. This is not necessarily
inclusive of all examples of forward looking statements that are or may be
contained in this report.

         Any or all forward-looking statements contained in this discussion may
turn out to be wrong. Actual results may vary materially, and there are no
guarantees about our financial and operating performance or the performance of
our stock. All statements are made as of the date of signing of this report and
we do not assume any obligation to update any forward-looking statement.

         Many factors could cause actual results to differ from the results or
developments discussed or predicted in the forward looking statements made in
this report. These factors include inaccurate assumptions and a broad variety of
other risks and uncertainties, including some that are known and some that are
not. Although it is not possible to predict or identify all such factors, many
of them are described under the caption "Risk Factors" in the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
section of our Annual Report on Form 10-K/A for the fiscal year ended June 30,
2004, which we filed with the SEC and which is incorporated herein by reference.
Readers of this report are advised to read such Risk Factors in connection with
this report. The following information supplements and updates such Risk
Factors:

         o   Although Schering-Plough has received approval for PEG-INTRON in
             Japan in combination with REBETOL for the treatment of hepatitis C,
             there can be no assurance that Schering-Plough will successfully
             market PEG-INTRON in Japan. It is anticipated that a competing
             pegylated interferon-based combination therapy will receive
             marketing approval in Japan for hepatitis C in the next one to two
             years. Even if Schering-Plough is successful in launching
             PEG-INTRON in Japan, it is likely that the future launch of a
             competing pegylated interferon-based combination therapy will have
             a negative impact on PEG-INTRON's Japanese market share and sales.

         o   We have been experiencing pricing pressure with respect to ABELCET.
             In particular, Fujisawa Healthcare Inc. and Gilead Sciences, Inc.,
             which jointly market a competing liposomal amphotericin B product
             have aggressively lowered the price of their product in certain
             regions and for certain customers in the U.S. This has resulted in
             the shrinkage or loss of certain of our customer accounts. Further,
             ABELCET sales may also continue to be negatively impacted by newer
             agents from Pfizer, Merck and Fujisawa. We are developing
             strategies to address these competitive threats, but there can be
             no assurance as to when or whether we will be successful in
             stopping or reversing this trend.

         o   We have received a notice from Bristol-Myers Squibb Company ("BMS")
             terminating our amphotericin B supply agreement with BMS effective
             March 1, 2006. We currently have an alternative source of supply of
             amphotericin B and are seeking to qualify at least one additional
             source of supply. The termination by BMS may give rise to future
             increased costs for the acquisition of amphotericin B as well as
             increased capital expenditures related to readying a new supplier's
             facilities for cGMP production and regulatory approval of ABELCET
             incorporating the alternative amphotericin B. Although there can be
             no assurance as to the timing of these increased costs and
             additional capital expenditures, we anticipate that these may be
             incurred beginning in calendar 2007.


                                       26
<PAGE>

         o   Manufacturing and stability problems required us to implement a
             voluntary recall for one ONCASPAR batch in March 2005. To date, we
             have been unable to identify the cause of the manufacturing and
             stability problems related to the batches of ONCASPAR that we
             voluntarily recalled in March 2005, September 2004, and July 2004
             and preliminary indicators do not rule out that an additional batch
             of ONCASPAR may also be affected by manufacturing and stability
             problems, which we may also voluntarily recall in the near term. We
             cannot assure you that future product recalls will not materially
             adversely affect our business, our financial conditions, results of
             operations or our reputation and relationships with our customers.



                                       27
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The following discussion about our exposure to market risk of financial
instruments contains forward-looking statements. Actual results may differ
materially from those described.

         Our holdings of financial instruments are comprised of debt securities
and time deposits. All such instruments are classified as securities
available-for-sale. In August 2003, we entered into a Zero Cost Protective
Collar arrangement with a financial institution to reduce the exposure
associated with the 1.5 million shares of common stock of NPS we received as
part of the merger termination agreement with NPS. The terms of the collar
arrangement are structured so that our investment in NPS stock, when combined
with the value of the collar, should secure ultimate cash proceeds in the range
of 85% - 108% of the negotiated fair value per share of $23.47 (representing a
4.85% discount off the closing price of NPS common stock on the day before the
collar was executed) (See Note 12 to our unaudited condensed consolidated
financial statements). We do not invest in portfolio equity securities or
commodities or use financial derivatives for trading purposes. Our debt security
portfolio represents funds held temporarily pending use in our business and
operations. We manage these funds accordingly. We seek reasonable assuredness of
the safety of principal and market liquidity by investing in rated fixed income
securities while at the same time seeking to achieve a favorable rate of return.
Our market risk exposure consists principally of exposure to changes in interest
rates. Our holdings are also exposed to the risks of changes in the credit
quality of issuers. We typically invest the majority of our investments in the
shorter-end of the maturity spectrum, and at March 31, 2005 all of our holdings
were in instruments maturing in four years or less.

         The table below presents the principal amounts and related weighted
average interest rates by year of maturity for our investment portfolio as of
March 31, 2005 (in thousands):

<TABLE>
<CAPTION>

                                2006         2007          2008         2009        TOTAL        FAIR VALUE
                              --------     -------       -------      -------      --------      ----------
<S>                           <C>          <C>           <C>          <C>          <C>            <C>
   Fixed Rate                 $103,454     $37,259       $18,586      $11,025      $170,324       $168,879
   Average Inte  Rate               92%       2.14%         2.54%        2.82%         1.49%             -
   Variable Rate                     -           -             -            -             -              -
   Average Interest Rate             -           -             -            -             -              -
                              --------     -------       -------      -------      --------       --------
                              $103,454     $37,259       $18,586      $11,025      $170,324       $168,879
                              ========     =======       =======      =======      ========       ========
</TABLE>

         Our 4.5% convertible subordinated notes in the principal amount of
$400.0 million due July 1, 2008 have fixed interest rates. The fair value of the
notes was approximately $360.0 million at March 31, 2005. The fair value of
fixed interest rate convertible notes is affected by changes in interest rates
and by changes in the price of our common stock.

         As discussed in Liquidity and Capital Resources, in August 2003, we
entered into a zero cost protective collar arrangement (the "Collar") with a
financial institution to reduce the exposure to the changes in the fair value
associated with the 1.5 million shares of common stock of NPS we received as
part of the merger termination agreement with NPS. The Collar is considered a
derivative instrument and as such, we carry the Collar at fair value as an asset
or liability on the consolidated balance sheet and changes in fair value are
recorded as a charge or credit to operations in the period of change. The value
of the Collar instrument is subject to market conditions that cause variability
associated with its intrinsic value and time valves. The fair value of the
Collar at March 31, 2005 was an asset of $5.4 million.


                                       28
<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

         The following has been amended to reflect the restatement of the
Company's financial statements as discussed in (i) the Explanatory Note to this
Quarterly Report on Form 10-Q/A and (ii) Note 2 to the Condensed Consolidated
Financial Statements for the quarterly period ended March 31, 2005, which appear
under Item 1 of this Quarterly Report on Form 10-Q/A.

         In connection with the preparation of our previously filed Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2005, our
management, including our Chief Executive Officer and Controller (Acting
Principal Accounting Officer), evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended ("the Exchange
Act")). Based on that evaluation, our Chief Executive Officer and Controller
(Acting Principal Accounting Officer) concluded that, as of March 31, 2005, our
disclosure controls and procedures were effective in timely alerting them to the
material information relating to us required to be included in our periodic
filings with the U.S. Securities and Exchange Commission ("SEC").

         Subsequent to the period covered by this report, we reevaluated our use
of hedge accounting for a derivative hedging instrument under Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities, as amended (SFAS No. 133). We identified certain
computational changes in the valuation of the Collar and, therefore did not
properly account for the Collar. In conjunction with our reevaluation, we
determined that we would need to amend and restate certain previously issued
financial statements, including those pertaining to the quarterly period ended
March 31, 2005, with respect to our accounting for the derivative hedging
instrument. Accordingly, on August 16, 2005 and September 1, 2005 we filed a
current report on Form 8-K with the SEC detailing our determination. Due to our
need to amend and restate our financial statements for the quarterly period
ended March 31, 2005, our management, including our Chief Executive Officer and
Chief Financial Officer, now believe that our disclosure controls and procedures
were not effective as of March 31, 2005.

         There have been no changes in our internal control over financial
reporting during the quarterly period covered by this report that have
materially affected or are reasonably likely to materially affect our internal
control over financial reporting. However, since March 31, 2005, in conjunction
with the audit of our consolidated financial statements for the year ended June
30, 2005 three material weaknesses in our disclosure controls and procedures
were identified as of June 30, 2005 and are summarized as follows:

o    Our policies and procedures did not provide for adequate management
     oversight and review of the accounting implications of the terms and
     conditions of certain third-party agreements. This internal control
     deficiency would have resulted in a material understatement of revenue and
     overstatement of research and development expense within our consolidated
     statement of operations for the year ended June 30, 2005.

o    Our policies and procedures failed to ensure the correct application of
     SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities,
     as it pertains to the valuation of a derivative instrument and the
     application of hedge accounting for that instrument. This internal control
     deficiency resulted in a material misstatement of certain balance sheet
     accounts, including other comprehensive income, and statement of operations
     amounts, including other income (expense) and income taxes and was
     associated with our decision to restate certain historical periods
     as discussed above and reported in our current reports on Form 8-K filed
     with the SEC on August 16, 2005 and September 1, 2005.

         We are currently finalizing our remediation plan to enhance our
accounting department and policies and procedures to address the material
weaknesses in our internal control over financial reporting that existed as of
June 30, 2005. Our remedial action plan will include:

o    revising our policies and procedures to provide for an increased level of
     management oversight and review with respect to accounting for agreements
     with third-parties;


                                       29
<PAGE>

o        improving training, education, accounting reviews, and if necessary,
         hiring of additional accounting and financial personnel to ensure that
         all relevant financial personnel have the appropriate level of
         technical expertise to effectively interpret and apply accounting
         standards.






                                       30
<PAGE>

PART II OTHER INFORMATION


ITEM 6.  EXHIBITS

(a) Exhibits required by Item 601 of Regulation S-K.

        EXHIBIT
        NUMBER       DESCRIPTION
        --------     -----------
         3.1         Certificate of Incorporation, as amended (previously filed
                     as an exhibit to the Company's Annual Report on Form 10-K
                     for the year ended June 30, 2002 and incorporated herein by
                     reference thereto)
         3.2         Amendment to Certificate of Incorporation (previously filed
                     as an exhibit to the Company's Current Report on Form 8-K
                     filed on December 10, 2002 and incorporated herein by
                     reference thereto)
         3.3         By laws, as amended (previously filed as an exhibit to the
                     Company's Current Report on Form 8-K filed with the
                     Commission on May 22, 2002 and incorporated herein by
                     reference thereto)
         4.1         Indenture dated as of June 26, 2001, between the Company
                     and Wilmington Trust Company, as trustee, including the
                     form of 4 1/2% Convertible Subordinated Notes due 2008
                     attached as exhibit A thereto (previously filed as an
                     exhibit to the Company's Registration Statement on Form S-3
                     (File No. 333-67509) filed with the Commission and
                     incorporated herein by reference thereto)
         4.2         Rights Agreement dated May 17, 2002 between the Company and
                     Continental Stock Transfer Trust Company, as rights agent
                     (previously filed as an exhibit to the Company's Form 8-A
                     (File No. 000-12957) filed with the Commission on May 22,
                     2002 and incorporated herein by reference thereto)
         4.3         First Amendment to Rights Agreement, dated as of February
                     19, 2003 (previously filed as an exhibit to the Company's
                     Form 8-A12 G/A (File No. 000-12957) filed with the
                     Commission on February 20, 2003 and incorporated herein by
                     reference thereto)
         10.2        Employment Agreement with Craig A. Tooman dated January 5,
                     2005 (previously filed as an exhibit to the Company's
                     Quarterly Report on Form 10-Q for the quarter ended
                     December 31, 2004 and incorporated herein by reference
                     thereto)
         10.6        Form of Restricted Stock Unit Award Agreement for Executive
                     Officers
         31.1        Certification of Principal Executive Officer pursuant to
                     Section 302 of the Sarbanes-Oxley Act of 2002 *
         31.2        Certification of Principal Accounting Officer pursuant to
                     Section 302 of the Sarbanes-Oxley Act.*
         32.1        Certification of Principal Executive Officer pursuant to
                     Section 906 of the Sarbanes-Oxley Act of 2002 *
         32.2        Certification of Principal Accounting Officer pursuant to
                     Section 906 of the Sarbanes-Oxley Act.*

         *           Filed herewith.



                                       31
<PAGE>


SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                       ENZON PHARMACEUTICALS, INC.
                                              (Registrant)

September 28, 2005                     By: /s/Jeffrey H. Buchalter
                                           ---------------------------
                                           Jeffrey H. Buchalter
                                           Chairman, President and
                                           Chief Executive Officer
                                           (Principal Executive Officer)



September 28, 2005                     By: /s/Craig A. Tooman
                                           -------------------
                                           Craig A. Tooman
                                           Executive Vice President Finance and
                                           Chief Financial Officer
                                           (Principal Financial Officer)



                                       32