<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 September 30, 2003

                                       OR

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

                         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 Incorporation or           (I.R.S. Employer Identification No.)
                Organization)

</TABLE>

         685 Route 202/206, Bridgewater, New Jersey                  08807
         ------------------------------------------                  -----
         (Address of Principal Executive Offices)                 (Zip Code)

                                 (908) 541-8600
                                 --------------
              (Registrant's Telephone Number, Including Area Code)


         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).
         Yes   |X|      No  |_|

         As of November 12, 2003, there were 43,520,896 shares of Common Stock,
par value $.01 per share, outstanding.

<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 September 30, 2003 as of the
date of filing the original Form 10-Q on November 14, 2003. We are amending and
restating our original quarterly report on Form 10-Q in its entirety with
respect to computational changes in the valuation 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 (SFAS No. 133). 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
September 30, 2003 reflects corrections and restatements of the following
financial statements: (a) condensed consolidated balance sheet as of September
30, 2003; (b) condensed consolidated statement of operations for the period
ended September 30, 2003; and (c) condensed consolidated statement of cash flows
for the period ended September 30, 2003.

         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 December
31, 2003 and March 31, 2004 and an amended annual report on Form 10-K/A
(Amendment No. 2) for the quarter and year ended June 30, 2004. For a more
detailed description of corrections and restatements made to the financial
statements, see Note 2, "Restatement 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: (a) other income for the
fiscal period ended September 30, 2003 under "Item 2 Management's Discussion and
Analysis of Financial Condition and Results of Operations" to reflect the
changes discussed herein; (b) non-current other liabilities; (c) total gross
deferred tax assets, net deferred tax assets and income tax provision for the
fiscal period ended September 30, 2003 in Note 12, "Income Taxes", to the
accompanying notes to the condensed consolidated financial statements; (d)
unrealized income (loss) recognized in other income for the fiscal periods ended
September 30, 2003 with respect to the valuation of a derivative instrument in
Note 14, "Derivative Instrument", to the accompanying notes to the condensed
consolidated financial statements; (e) net income (loss) and net income (loss)
per common share for the fiscal period ended September 30, 2003 in Note 5,
"Earnings Per Common Share", to the accompanying notes to the condensed
consolidated financial statements; and (f) pro forma net income (loss) and net
income (loss) per common share for the fiscal period ended September 30, 2003 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 September 30, 2003 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 November 14, 2003 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 per share amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                   September 30,   June 30,
                                                                      2003          2003*
                                                                   ----------     ---------
                                                                   (Restated)
                                                                    (Note 2)
<S>                                                                <C>            <C>
ASSETS
Current assets:
  Cash and cash equivalents                                        $  63,042      $  66,752
  Short-term investments                                              24,834         25,047
  Accounts receivable, net                                            26,732         33,173
  Inventories                                                         11,812         11,786
  Deferred tax and other current assets                               18,007         16,089
                                                                   ---------      ---------
       Total current assets                                          144,427        152,847
                                                                   ---------      ---------

Property and equipment                                                45,538         43,896
  Less accumulated depreciation and amortization                      12,286         11,303
                                                                   ---------      ---------
                                                                      33,252         32,593
                                                                   ---------      ---------
Other assets:
  Marketable securities                                               67,685         61,452
  Investments in equity securities and convertible note               62,935         56,364
  Amortizable intangible assets, net                                 207,498        211,975
  Goodwill                                                           150,985        150,985
  Deferred tax and other assets                                       61,342         62,350
                                                                   ---------      ---------
                                                                     550,445        543,126
                                                                   ---------      ---------
Total assets                                                       $ 728,124      $ 728,566
                                                                   =========      =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                 $   8,124      $  12,809
  Accrued expenses                                                    17,182         21,536
                                                                   ---------      ---------
     Total current liabilities                                        25,306         34,345
                                                                   ---------      ---------

Notes payable                                                        400,000        400,000
Other liabilities                                                      8,667          2,637
                                                                   ---------      ---------
                                                                     408,667        402,637
                                                                   ---------      ---------
Commitments and contingencies
Stockholders' equity:
  Preferred stock-$.01 par value, authorized 3,000,000 shares; no
   shares issued and outstanding at September 30, 2003 and at
   June 30, 2003                                                          --             --
  Common stock-$.01 par value, authorized 90,000,000 shares;
   issued and outstanding 43,690,896 shares at September
   30, 2003 and 43,518,359 shares at June 30, 2003                       437            435
  Additional paid-in capital                                         323,938        322,488
  Accumulated other comprehensive income (loss)                        1,469           (159)
  Deferred compensation                                               (5,689)        (4,040)
  Accumulated deficit                                                (26,004)       (27,140)
                                                                   ---------      ---------
Total stockholders' equity                                           294,151        291,584
                                                                   ---------      ---------
Total liabilities and stockholders' equity                         $ 728,124      $ 728,566
                                                                   =========      =========

</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
                                                                        September 30,
                                                                    ---------------------
                                                                      2003         2002
                                                                    --------     --------
                                                                   (Restated)
                                                                    (Note 2)
<S>                                                                 <C>          <C>
Revenues:
    Product sales, net                                              $ 24,961     $  6,566
    Manufacturing revenue                                              1,604            -
    Royalties                                                         13,811       18,417
    Contract revenue                                                     268           84
                                                                    --------     --------
              Total revenues                                          40,644       25,067
                                                                    --------     --------
Costs and expenses:
    Cost of sales and manufacturing revenue                           10,912        2,514
    Research and development                                           6,551        4,062
    Selling, general and administrative                               11,209        3,908
    Amortization of acquired intangible assets                         3,358           35
                                                                    --------     --------
             Total costs and expenses                                 32,030       10,519
                                                                    --------     --------
Operating income                                                       8,614       14,548
                                                                    --------     --------
Other income (expense):
    Interest and dividend income                                         474        3,454
    Interest expense                                                  (4,957)      (4,957)
    Other, net                                                        (2,513)           -
                                                                    --------     --------
                                                                      (6,996)      (1,503)
                                                                    --------     --------

Income before tax provision                                            1,618       13,045
Income tax provision                                                     482          261
                                                                    --------     --------
Net income                                                          $  1,136     $ 12,784
                                                                    ========     ========

Basic earnings per common share                                     $   0.03     $   0.30
                                                                    ========     ========
Diluted earnings per common share                                   $   0.03     $   0.29
                                                                    ========     ========
Weighted average number of common shares outstanding - basic          43,290       42,980
                                                                    ========     ========

Weighted average number of common shares and dilutive
    potential common shares outstanding                               43,629       43,681
                                                                    ========     ========

</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>

                                                                             Three Months Ended
                                                                                September 30,
                                                                            ----------------------
                                                                              2003          2002
                                                                            ---------     ---------
                                                                           (Restated)
                                                                            (Note 2)
<S>                                                                         <C>           <C>
Cash flows from operating activities:
      Net income                                                            $   1,136     $  12,784
      Adjustments to reconcile net income to net cash
       provided by operating activities:
           Depreciation and amortization                                        5,925           601
           Non-cash expense for issuance of common stock                          344            77
           Non-cash income relating to equity collar arrangement                2,513             -
           Amortization of bond premium/discount                                 (126)         (274)
           Deferred income taxes                                                   88             -
      Changes in operating assets and liabilities                              (5,991)       (6,029)
                                                                            ---------     ---------

               Net cash provided by operating activities                        3,889         7,159
                                                                            ---------     ---------
Cash flows from investing activities:

      Purchase of property and equipment                                       (1,649)         (766)
      Proceeds from sale of marketable securities                               3,000        91,180
      Purchase of marketable securities                                        (8,950)      (60,990)
      Maturities of marketable securities                                           -         5,000
                                                                            ---------     ---------

               Net cash provided by (used in) investing activities             (7,599)       34,424
                                                                            ---------     ---------
Cash flows from financing activities:
      Proceeds from issuance of common stock                                        -           272
                                                                            ---------     ---------

Net increase (decrease) in cash and cash equivalents                           (3,710)       41,855

Cash and cash equivalents at beginning of period                               66,752       113,858
                                                                            ---------     ---------

Cash and cash equivalents at end of period                                  $  63,042     $ 155,713
                                                                            =========     =========

</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. (the
"Company") and its subsidiaries in accordance with accounting principles
generally accepted in the United States of America for interim financial
information pursuant to Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required for complete annual
financial statements. In the opinion of management, all adjustments (consisting
only of normal and recurring adjustments) considered necessary for a fair
presentation have been included. Certain prior year balances were 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.

(2) Restatement 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, 2003, December 31, 2003, March
31, 2004 and June 30, 2004 required restatement with respect to its accounting
for a derivative hedging instrument.

         The restatement is 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). In November 2004, we had
restated our financial statements for the year and quarter ended June 30, 2004
to correct a change relating to the accounting for the same derivative hedging
instrument and the assessment of the realizeability of deferred tax assets
related to the unrealized loss on available for sale securities included in
accumulated other comprehensive loss as of June 30, 2004.

         As described in Note 14 "Derivative Instruments", the Company entered
into a zero cost protective collar (the "Collar") arrangement in August 2003 to
reduce its exposure to changes in the fair value of the 1.5 million common
shares of NPS Pharmaceutical, Inc. ("NPS"), which the Company received in
connection with the termination of a proposed merger. The Collar is carried at
fair value on the Company's condensed consolidated balance sheet as either a
payable or receivable from the financial institution, with changes in the fair
value being charged to "other income (expense)" in the condensed consolidated
statement of operations. The Company has identified certain computational
changes in the valuation of the Collar. The accounting change results in an
increase or decrease in the carrying value of the Collar as of the quarterly
periods ended September 30, 2003, December 31, 2003, March 31, 2004 and June 30,
2004 and a corresponding charge or credit to other income (expense) and the
related income tax effects for the corresponding quarterly and fiscal
year-to-date periods.

         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 period
then ended (in thousands, except per share amounts).



                                       6
<PAGE>


                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              Notes To Condensed Consolidated Financial Statements
                                   (Unaudited)

                 Changes to Condensed Consolidated Balance Sheet
                 -----------------------------------------------

                               September 30, 2003
                               ------------------
<TABLE>
<CAPTION>

                                                         Previously
                                                          Reported        Adjustments     Restated
                                                          --------        -----------     --------
<S>                                                       <C>             <C>             <C>
Non-current deferred tax and other assets                 $  60,190       $   1,152       $  61,342
Total non-current assets                                    549,293           1,152         550,445
Total assets                                                726,972           1,152         728,124
Other liabilities                                             5,847           2,820           8,667
Total non-current liabilities                               405,847           2,820         408,667
Accumulated deficit                                         (24,336)         (1,668)        (26,004)
Total stockholders' equity                                  295,819          (1,668)        294,151
Total liabilities and stockholders' equity                  726,972           1,152         728,124

</TABLE>

            Changes to Condensed Consolidated Statement of Operations

<TABLE>
<CAPTION>

                                                                     Three months ended
                                                                     September 30, 2003
                                                          ----------------------------------------
                                                          Previously
                                                           Reported       Adjustments     Restated
                                                           --------       -----------     --------
<S>                                                         <C>             <C>             <C>
Other, net                                                  $   307         ($2,820)        ($2,513)
Total other income (expense)                                 (4,176)         (2,820)         (6,996)
Income before tax provision                                   4,438          (2,820)          1,618
Income tax provision                                          1,634          (1,152)            482
Net income                                                    2,804          (1,668)          1,136
Basic earnings per common share                                0.06           (0.03)           0.03
Diluted earnings per common share                              0.06           (0.03)           0.03

</TABLE>


         The restatement did not result in any changes to cash and cash
equivalents as of September 30, 2003 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 September 30, 2003 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 3, "Comprehensive
Income", Note 5, "Earnings Per Common Share", Note 6, "Stock-Based
Compensation", Note 12, "Income Taxes", and Note 14, "Derivative Instruments".




                                       7
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              Notes To Condensed Consolidated Financial Statements
                                   (Unaudited)


(3) 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 income to comprehensive income (in
thousands):

<TABLE>
<CAPTION>

                                                              Three months ended
                                                                 September 30,
                                                           -------------------------
                                                              2003            2002
                                                           ------------     --------
                                                           (Restated)
<S>                                                           <C>           <C>
         Net income                                           $1,136        $12,784
                    Other comprehensive income:
                    Unrealized gain on
                        securities arising during the
                        period, net of tax                     1,628          2,136
                    Reclassification adjustment
                        for net gain realized in net
                        income, net of tax                         -            (55)
                                                              ------        -------

                    Total other comprehensive income           1,628          2,081
                                                              ------        -------

         Comprehensive income                                 $2,764        $14,865
                                                              ======        =======

</TABLE>

         For the three months ended September 30, 2003 a substantial portion of
the unrealized gain relates to the Company's investment in 1.5 million shares of
common stock of NPS Pharmaceuticals, Inc. ("NPS"). (See Note 14)

(4) New Accounting Pronouncements

         In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities",
an interpretation of Accounting Principles Board ("APB") Opinion No. 51. FIN 46
requires certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective for all
new variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 must be applied for the first interim or annual period
beginning after December 15, 2003. At September 30, 2003 we were not a party to
transactions contemplated under FIN 46.


                                       8
<PAGE>

         In November 2002, the Emerging Issues Task Force reached a consensus
opinion on EITF 00-21, "Revenue Arrangements with Multiple Deliverables". The
consensus provides that revenue arrangements with multiple deliverables should
be divided into separate units of accounting if certain criteria are met. The
consideration for the arrangement should be allocated to the separate units of
accounting based on their relative fair values, with different provisions if the
fair value of all deliverables is not known or if the fair value is contingent
on delivery of specified items or performance conditions. Applicable revenue
recognition criteria should be considered separately for each separate unit of
accounting. EITF 00-21 is effective for revenue arrangements entered into in
fiscal periods beginning after June 15, 2003. This adoption did not have any
impact on our financial position or results of operations.

(5) Earnings Per Common Share

         Basic earnings per share is computed by dividing the net income
available to common shareholders adjusted for cumulative undeclared preferred
stock dividends for the relevant period, 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 months ended September
30, 2003 and 2002, the denominator includes both the weighted average number of
shares of Common Stock outstanding and the number of dilutive Common Stock
equivalents. The number of dilutive Common Stock equivalents includes the effect
of non-qualified stock options calculated using the treasury stock method and
the number of shares issuable upon conversion of certain Series A Preferred
Stock that were outstanding as of September 30, 2002. The number of shares
issuable upon conversion of the Company's 4.5% Convertible Subordinated Notes
due 2008 (the "Notes") and the effect of the vesting of certain restricted stock
using the treasury stock method have not been included as the effect of their
inclusion would be antidilutive. As of September 30, 2003, the Company had 6.8
million dilutive potential common shares outstanding that could potentially
dilute future earnings per share calculations.

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

<TABLE>
<CAPTION>

                                                                  Three months ended
                                                                     September 30,
                                                           ----------------------------------
                                                               2003                    2002
                                                           -----------           ------------
                                                            (Restated)
<S>                                                           <C>                   <C>
          Net income                                          $1,136                $12,784
          Less:  Preferred stock dividends                         -                      4
                                                              ------                -------
          Net income available to common
             stockholders                                     $1,136                $12,780
                                                              ======                =======
          Weighted average number of
             common shares outstanding - basic                43,290                 42,980
          Effect of dilutive securities:
                Conversion of preferred stock                      -                     16
                Assumed exercise of non-
                   qualified stock options and
                   restricted stock                              339                    685
                                                              ------                -------
          Weighted average number of
             common shares outstanding and
             dilutive potential common shares                 43,629                 43,681
                                                              ======                =======

</TABLE>


                                       9
<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 provisions of APB Opinion No. 25 "Accounting for Stock Issued to
Employees". Compensation expense for stock options issued to employees is based
on the difference on the date of grant between the fair value of the Company's
stock and the exercise price of the option. No stock option-based employee
compensation cost is reflected in net income, as all options granted under those
plans had 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 income and 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
                                                                          September 30,
                                                                   -----------------------------
                                                                      2003             2002
                                                                   ------------     ------------
                                                                   (Restated)
<S>                                                                   <C>              <C>
          Net income                                                  $1,136           $12,784
             Less:  Preferred stock dividends                              -                 4
                                                                      ------           -------
             Net income available to common stockholders               1,136            12,780
          Add:  Stock-based employee
              compensation expense included in
              reported net income, net of related
              tax effects                                                176                77
          Deduct:  Total stock-based employee
              compensation expense determined
              under fair value based method for all
              awards, net of related tax effects                      (2,221)           (2,184)
                                                                      ------           -------

          Pro forma net income available to common
              stockholders                                             ($909)          $10,673
                                                                      ======           =======

          Earnings (Loss) per common share - basic:
             as reported                                                $0.03            $0.30
             pro forma                                                 ($0.02)           $0.25
          Earnings (Loss) per common share - diluted:
             as reported                                                $0.03            $0.29
             pro forma                                                 ($0.02)           $0.24

</TABLE>

         During the three months ended September 30, 2003, the Company issued
170,000 shares of restricted common stock to certain executives. Total
compensation expense of approximately $1.9 million is being recognized over a
five year period.



                                       10
<PAGE>


                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              Notes To Condensed Consolidated Financial Statements
                                   (Unaudited)


         During the three months ended September 30, 2003, the Company granted
336,660 stock options to its employees at an average exercise price of $11.61
under its stock option plans (fair value on the date of grant). The options vest
over a period of four years.

 (7)  Inventories

         The composition of inventories is as follows (in thousands):


                                        September 30,          June 30,
                                             2003               2003
                                        -------------          -------
                  Raw materials            $ 4,265             $ 4,349
                  Work in process            2,043               3,392
                  Finished goods             5,504               4,045
                                           -------             -------
                                           $11,812             $11,786
                                           =======             =======

(8) Acquisition of ABELCET Product Line

         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 "ABELCET
Product Line") from Elan Corporation, plc, for $360.0 million plus acquisition
costs of approximately $9.3 million.

         The following unaudited pro forma results of operations of the Company
for the three months ended September 30, 2002, assumes the acquisition of the
ABELCET Product Line occurred as of July 1, 2002 and assumes the purchase price
has been allocated to the assets purchased based on fair values at the date of
acquisition (in thousands, except per share amounts):


                                                    Three months ended
                                                    September 30, 2002
                                                       (Unaudited)
                                                    ------------------
               Product sales                              $21,695
               Total revenues                              40,196
               Net income                                   7,184
               Pro forma earnings per share:
                    Basic                                  $0.17
                    Diluted                                $0.16



                                       11
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              Notes To Condensed Consolidated Financial Statements
                                   (Unaudited)


(9) Intangible Assets

         The Company's intangible assets are primarily related to its November
22, 2002 acquisition of the ABELCET product line and are amortized over their
estimated useful lives. The gross carrying amount, estimated lives and
accumulated amortization, by major intangible asset class at September 30, 2003
was as follows:

<TABLE>
<CAPTION>

                                                                Gross
                                            Estimated          Carrying         Accumulated            Net
                                              Lives             Amount          Amortization         Assets
                                          --------------    ---------------    ---------------    --------------
<S>                                       <C>                <C>                <C>                <C>
    Product patented technology              12 years           $64,400            $4,472            $59,928
    Manufacturing patent                     12 years            18,300             1,271             17,029
    NDA Approval                             12 years            31,100             2,160             28,940
    Trade name and other
      product rights                         15 years            80,000             4,445             75,555
    Product acquisition costs             10-14 years            26,194             2,164             24,030
    Patents                                 1-5 years             2,092             1,665                427
    Manufacturing contract                    3 years             2,200               611              1,589
                                                            ---------------    ---------------    --------------
      Total                                                    $224,286           $16,788           $207,498
                                                            ===============    ===============    ==============

</TABLE>

         Amortization of intangibles assets for the three month period ended
September 30, 2003 was $4.5 million. Assuming no changes in the gross carrying
amount of intangible assets, the amortization of intangible assets for the next
five fiscal years is estimated to be approximately $17.9 million per year.

(10) Goodwill

         The amount assigned to goodwill in connection with ABELCET product line
acquisition was recorded at $151.0 million. In accordance with SFAS No. 142,
"Goodwill and Other Intangible Assets," goodwill is not amortized, but rather is
reviewed at least annually for impairment.

(11) Cash Flow Information

         The Company considers all highly liquid securities with original
maturities of three months or less to be cash equivalents. Cash payments for
interest were approximately $9.0 million for the three months ended September
30, 2003 and September 30, 2002. Income tax payments for the three months ended
September 30, 2003 were $2.5 million. There were no income tax payments made for
the three months ended September 30, 2002.

(12) Income Taxes

         The Company recognized a tax provision for the three months ended
September 30, 2003 at an estimated annual effective tax rate of 37%, which is
based on the projected income tax expense and taxable income for the fiscal year
ending June 30, 2004. In addition, the Company recorded a $1.0 million tax
benefit related to the derivative instrument (Note 14).



                                       12
<PAGE>

                  ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
              Notes To Condensed Consolidated Financial Statements
                                   (Unaudited)


         At June 30, 2003, the Company recognized approximately $67.5 million as
a net deferred tax asset related to expected future profits, because management
concluded that it is more likely than not that the deferred tax assets will be
realized, including the net operating losses from operating activities and stock
option exercises, based on future operations. As of September 30, 2003, the
Company retained a valuation allowance of $12.8 million with respect to certain
capital losses and federal research and development credits as the ultimate
utilization of such losses and credits is uncertain and will continue to
reassess the need for such valuation allowance based on the future operating
performance of the Company.

         The tax provision for the three months ended September 30, 2002
represents the Company's anticipated Alternative Minimum Tax liability based on
the anticipated taxable income for the full fiscal year.

(13) Business Segments

         A single management team that reports to the Chief Executive Officer
comprehensively manages the business 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. In addition, the Company does not
conduct any operations outside of the United States. The Company does not
prepare discrete financial statements with respect to separate product 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".

(14) 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.
Considering such restrictions, 1.1 million shares were valued at $26.7 million,
which was the fair value of NPS 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 will receive the proceeds from the sale of the securities. The amount
due at each maturity date will be 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. The Collar is considered 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 September 30, 2003, the Company had a
payable to the financial institution of $6.3 million. During the three months
ended September 30, 2003, the Company recorded an unrealized loss of $6.3
million as a component of other income (expense) representing the change in fair
value of the Collar instrument.

         As of September 30, 2003, 1,500,000 shares of NPS common stock valued
at $41.8 million, are included in investments in equity securities on the
accompanying condensed consolidated balance sheets. During the period from
August 2003 to September 30, 2003, the NPS common stock had appreciated $7.2
million in value, of which $3.8 million was recorded in other income in the
Statement of Operations and $2.1 million was recorded as a component of other
comprehensive income, net of tax, in the statement of consolidated stockholders'
equity.

                                       14
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         Information contained herein contains forward-looking statements which
can be identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "will," "should," or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy. We cannot assure you that the future results covered by the
forward-looking statements will be achieved. The matters set forth in the "Risk
Factors" section of the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 2003, which is incorporated herein by reference, constitute
cautionary statements identifying important factors with respect to such
forward-looking statements, including certain risks and uncertainties, that
could cause actual results to vary materially from the future results indicated
in such forward-looking statements. Other factors could also cause actual
results to vary materially from the future results indicated in such
forward-looking statements.

ACQUISITION OF ABELCET(R) BUSINESS

         On November 22, 2002, we acquired the North American rights and
operational assets associated with the development, manufacture, sales and
marketing of ABELCET (Amphotericin B Lipid Complex Injection) ("the ABELCET
Product Line") from Elan Corporation, plc ("Elan") for $360.0 million, plus
approximately $9.3 million of acquisition costs. This transaction was accounted
for as a business combination.

         Unless otherwise indicated, the discussions in Management's Discussion
and Analysis of Financial Condition and Results of Operations for the quarter
ended September 30, 2003 and financial condition at September 30, 2003 include
the results of operations of the ABELCET Product Line commencing from November
23, 2002. Comparisons are made to the results of operations and the financial
condition for the quarter ended September 30, 2002, which include only our
historical results prior to our acquisition of the ABELCET Product Line.

LIQUIDITY AND CAPITAL RESOURCES

         Total cash reserves, which include cash, cash equivalents and
marketable securities, were $155.6 million as of September 30, 2003, as compared
to $153.3 million as of June 30, 2003. The increase is primarily due to the
positive cash flow from operations. We invest our excess cash primarily in
United States government-backed securities and investment-grade corporate debt
securities.

         During the three months ended September 30, 2003, net cash generated
from operating activities was $3.9 million, compared to $7.2 million for the
three months ended September 30, 2002, primarily reflecting our net income of
$1.1 million, depreciation and amortization of $5.9 million, deferred income
taxes of $88,000 and our non-operating investments and collar of $2.5
million. These changes are offset by $5.8 million in our operating assets
and liabilities.

         Cash used in investing activities totaled $7.6 million for the three
months ended September 30, 2003 compared to an inflow of $34.4 million for the
three months ended September 30, 2002. Cash used in investing activities during
the three months ended September 30, 2003, consisted of $1.6 million of capital
expenditures and net purchases of marketable securities of $6.0 million.

         As of September 30, 2003, we had $400.0 million of 4.5% 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 beginning January
2, 2002. Accrued interest on the notes was $4.5 million as of September 30,
2003. 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. On or after July 7, 2004, 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. The notes will mature on July 1, 2008 unless
earlier converted, 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.


                                       15
<PAGE>

         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 Pharmaceuticals, Inc. ("NPS")
which we received as part of a merger termination agreement with NPS. The Collar
will mature in four separate three-month intervals from November 2004 through
August 2005, at which time we will receive the proceeds from the sale of the
securities which we estimate with consideration to the Collar to be $29.9
million to $38.0 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 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 we receive a
dividend from NPS.

         Our current sources of liquidity are cash, cash equivalents, and
interest earned on such cash reserves, marketable securities, sales of
ADAGEN(R), ONCASPAR(R), DEPOCYT(R) and ABELCET, royalties earned on sales of
PEG-INTRON(R) and other products and sales of our products for research purposes
and license fees. 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.

         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.

CONTRACTUAL OBLIGATIONS

         Our major outstanding contractual obligations relate to our operating
leases, our convertible debt and our license and development agreements with
collaborative partners. Since June 30, 2003, there has been no material change
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 in Form 10-K for the year ended
June 30, 2003.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002

         Revenues. Total revenues for the three months ended September 30, 2003
increased by 62% to $40.6 million, as compared to $25.1 million for the three
months ended September 30, 2002. The components of revenues are product sales
and certain contract manufacturing revenues, royalties we earn on the sale of
our products by others and contract revenues.


                                       16
<PAGE>


         Net sales and manufacturing revenue increased by 305% to $26.6 million
for the three months ended September 30, 2003, as compared to $6.6 million for
the three months ended September 30, 2002. The increase in net sales was due to
our commencing of sales of ABELCET in North America in November 2002 and DEPOCYT
in January 2003, and increased sales of ADAGEN and ONCASPAR. During November
2002, we acquired the ABELCET Product Line from Elan. During the three months
ended September 30, 2003, we recorded $16.6 million of sales related to the
ABELCET Product Line, of which $15.0 million related to sales of the product in
North America and $1.6 million related to the manufacture and sale of ABELCET to
Elan for the international market and other contract manufacturing revenue. In
January 2003, we obtained an exclusive license to sell, market and distribute
SkyePharma's DEPOCYT. During the three months ended September 30, 2003, we
recorded DEPOCYT sales of $1.3 million. Sales of ONCASPAR increased by 48% to
$4.1 million for the three months ended September 30, 2003 from $2.8 million in
the corresponding period in the prior year. This was a result of our resumption
of marketing efforts in connection with reacquiring from Aventis in June 2002
the right to market and distribute ONCASPAR for certain territories previously
licensed to Aventis. Sales of ADAGEN increased by 21% for the three months ended
September 30, 2003 to $4.6 million as compared to $3.8 million for the three
months ended September 30, 2002 due to an increase in the number of patients
receiving the drug.

         Royalties for the three months ended September 30, 2003, decreased to
$13.8 million as compared to $18.4 million in the same period in the prior year.
The decrease was primarily due to decreased sales by Schering-Plough, our
marketing partner, of PEG-INTRON due to the introduction of a competitive
product, PEGASYS(R).

         During December 2002 Hoffman-LaRoche launched PEGASYS, a pegylated
version of its interferon product ROFERON-A(R). Since its launch, PEGASYS has
taken market share away from PEG-INTRON. As a result, quarterly sales of
PEG-INTRON and the royalties we receive on those sales have declined in recent
quarters. We cannot assure you that PEGASYS will not continue to gain market
share at the expense of PEG-INTRON which could result in lower PEG-INTRON sales
and lower royalties to us.

         As a result of our focused marketing efforts for ABELCET, we believe
that we have been able to stabilize the pressure from the introduction of new
products in the antifungal market and that the product is now back on a growth
pattern. We expect sales of DEPOCYT, which are currently running at an annual
rate of approximately $5.0 million, to increase in this fiscal year compared to
the last fiscal year. We expect ADAGEN and ONCASPAR sales to grow in this fiscal
year at similar levels as achieved during the last fiscal year. However, we
cannot assure you that any particular sales levels of ABELCET, ADAGEN, ONCASPAR,
DEPOCYT or PEG-INTRON will be achieved or maintained.

         Contract revenues for the three months ended September 30, 2003
increased to $268,000 as compared to $84,000 in the previous year. The increase
was related to revenue received from the licensing of our PEG technology to
SkyePharma. In connection with such licensing, we received a payment of $3.5
million in January 2003 which is being recognized into income based on the term
of the related agreement.

         During the three months ended September 30, 2003, we had export sales
and royalties on export sales of $9.6 million, of which $8.2 million were in
Europe. Export sales and royalties recognized on export sales for the prior year
quarter were $8.1 million, of which $7.2 million were in Europe.

         Cost of Sales and Manufacturing Revenue. Cost of sales and
manufacturing revenue, as a percentage of net sales and manufacturing revenue
increased to 41% for the three months ended September 30, 2003 as compared to
38% for the same period last year. The increase was due to higher cost of sales
for ABELCET manufacturing revenue and higher cost of sales for DEPOCYT.



                                       17
<PAGE>

         Research and Development. Research and development expenses increased
by 61% to $6.6 million for the three months ended September 30, 2003 from $4.1
million for the same period last year. The increase was primarily due to (i)
increased spending of approximately $625,000 related to our SCA collaboration
with Micromet AG, (ii) increased spending on our two late stage development
programs, PEG-Camptothecin and ATG Fresenius S, of approximately $875,000, and
(iii) increased payroll related expenses of approximately $500,000 and other
expenses of approximately $500,000 related to our internal research and
preclinical activities.

         Selling, General and Administrative. Selling, general and
administrative expenses for the three months ended September 30, 2003 increased
by 187% to $11.2 million, as compared to $3.9 million in the same period last
year. The increase was primarily due to (i) increased sales and marketing
expense of approximately $5.6 million related to the ABELCET acquisition and the
sales force acquired from Elan, (ii) increased sales and marketing expense of
approximately $700,000 related to the establishment of an oncology sales force
for ONCASPAR and DEPOCYT and (iii) increased general and administrative
personnel and other costs of approximately $1.0 million.

         Amortization. Amortization expense increased to $3.4 million for the
three months ended September 30, 2003 as compared to $35,000 in the same period
last year as a result of the intangible assets acquired in connection with the
ABELCET acquisition during November 2002. Amortization of intangible assets is
provided over their estimated lives ranging from 1-15 years on a straight-line
basis.

         Other Income/Expense. Interest and dividend income for the three months
ended September 30, 2003 decreased to $474,000, as compared to $3.5 million for
the prior year. The decrease was primarily due to a reduction in our
interest-bearing investments resulting from our purchase of the ABELCET Product
Line in November 2002 for a cash payment of $360.0 million, plus acquisition
costs, as well as a decrease in interest rates. Interest expense remained
unchanged from the same period last year. Interest expense is related to the
$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 quarter ended September 30, 2003, other
expense was $2.5 million. During the quarter ended September 30, 2003, we
recognized (i) an unrealized loss of $6.3 million related to change in the fair
value of the Collar, and (ii) $3.8 million unrealized gain on the NPS common
stock. For a more detailed description of our Merger Termination Agreement with
NPS and the Collar see Note 14 to the Notes to the accompanying Consolidated
Financial Statements - Derivative Instrument.

         Income Taxes. During the three months ended September 30, 2003 and 2002
we recognized net tax expense of approximately $482,000 and $261,000,
respectively. The Company recognized a tax provision for the three months ended
September 30, 2003 at an estimated annual effective tax rate of 37%, which is
based on the projected income tax expense and taxable income for the fiscal year
ending June 30, 2004.

         At June 30, 2003, the Company recognized approximately $67.5 million as
a net deferred tax asset related to the expected future products, since
management concluded that it is more likely than not that the deferred tax
assets will be realized, including the net operating losses from operating
activities and stock option exercises, based on future operations. At June 30,
2003, the Company retained a valuation allowance of $12.8 million with respect
to certain capital losses and credits is uncertain and will continue to reassess
the need for such valuation allowance based on the future operating performance
of the Company.

         The tax provision for the three months ended September 30, 2002
represents the Company's anticipated Alternative Minimum Tax liability based on
the anticipated taxable income for the full fiscal year.


                                       18
<PAGE>

CRITICAL ACCOUNTING POLICIES

         In December 2001, the 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
the 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 September 30, 2003 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. 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.

         Revenues from product sales and manufacturing revenue are recognized at
the time of shipment and a provision is made at that time for estimated future
credits, chargebacks, sales discounts, rebates and returns. These sales
provision accruals are presented as a reduction of the accounts receivable
balances. We continually monitor the adequacy of the accruals by comparing the
actual payments to the estimates used in establishing the accruals. We ship
product to customers primarily FOB shipping point and utilize the following
criteria to determine appropriate revenue recognition: pervasive evidence of an
arrangement exists, delivery has occurred, selling price is fixed and
determinable and collection is reasonably assured.

         Royalties under our license agreements with third parties are
recognized when earned through the sale of the product by the licensor. We do
not participate in the selling or marketing of products for which we receive
royalties.

         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 license 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, 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 carryforwards, and continue to analyze what level of the
valuation allowance is needed.

         We assess the carrying value of our cost method investments in
accordance with SFAS No. 115 and SEC Staff Accounting Bulletin No. 59. 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.


                                       19
<PAGE>

         In accordance with the provisions of SFAS No. 142, 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. Goodwill is
reviewed for impairment by comparing the carrying value to its fair value.
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.



                                       20
<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. 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 September 30, 2003 all of our
holdings were in instruments maturing in three 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
September 30, 2003 (in thousands):

<TABLE>
<CAPTION>

                                       2004            2005         2006         Total     Fair Value
                                    ----------       -------       -------      -------    ----------
<S>                                 <C>              <C>           <C>          <C>          <C>
Fixed Rate                          $   24,664       $27,628       $40,105      $92,397      $92,519
Average Interest Rate                     3.31%         1.78%         2.18%        2.36%           -
Variable Rate                                -             -             -            -            -
Average Interest Rate                        -             -             -            -            -
                                    ----------       -------       -------      -------      -------
                                    $   24,664       $27,628       $40,105      $92,397      $92,519
                                    ==========       =======       =======      =======      =======

</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 $335.0 million at September 30, 2003. 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 balance sheet and changes in fair value are recorded as a
charge or credit to earnings in the period of change. The value of the Collar
instrument is subject to market conditions that cause variability associated
with its intrinsic and time values. The fair value of the Collar at
September 30, 2003 was a liability of $6.3 million.

ITEM 4. CONTROLS AND PROCEDURES

         The following has been amended to reflect the restatement of the
Company's condensed consolidated 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 quarter ended September 30,
2003, which appear under Item 1 of this quarterly report on Form 10-Q/A.




                                       21
<PAGE>

         In connection with the preparation of our previously filed quarterly
report on Form 10-Q for the quarter ended September 30, 2003, our management,
including our Chief Executive Officer and Chief Financial 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 Chief Financial Officer concluded that, as of September
30, 2003, 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) and made computational
changes to the valve of the collar instrument. In conjunction with our
evaluation, we determined that we would need to amend and restate certain
previously issued financial statements, including those pertaining to the
quarter ended September 30, 2003, 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 quarter ended September 30, 2003, our management, including our Chief
Executive Officer and Chief Financial Officer, now believe that our disclosure
controls and procedures were not effective as of September 30, 2003.

         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 September 30, 2003, we are
designing a remediation plan to address the material weakness in our internal
control and procedures pertaining to our application of SFAS No. 133, the
accounting for derivative instruments, and the related restatements of certain
previously issued financial statements. Our remediation plan includes improving
training, education, and accounting reviews to ensure that all relevant
financial personnel have the appropriate level of technical expertise to
effectively interpret and apply accounting standards.



                                       22
<PAGE>

PART II OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K).

<TABLE>
<CAPTION>

                                                                                              Page Number
                                                                                                  or
       Exhibit                                                                                Incorporation
       Number       Description                                                               By Reference
       ------       -----------                                                               ------------
       <S>          <C>                                                                       <C>
           3.1      Certificate of Incorporation, as amended                                           ^^^
           3.2      Amendment to Certificate of Incorporation                                           \\
           3.3      By laws, as amended                                                                 ^^
           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             ++++
           4.2      Rights Agreement dated May 17, 2002 between the Company and
                    Continental Stock Transfer Trust Company, as rights agent                            ^
           4.3      First Amendment to Rights Agreement, dated as of February 19, 2003                   *
          31.1      Rule 13a-14(a) Certifications                                                        o
          31.2      Rule 13a-14(a) Certifications                                                        o
          32.1      Section 1350 Certifications                                                          o
          32.2      Section 1350 Certifications                                                          o

</TABLE>

o        Filed herewith.

^^^      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.

\\       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.

^^       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.

++++     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.

^        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.

*        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.



                                       23
<PAGE>

(b) Reports on Form 8-K.

         On July 24, 2003, we filed with the Commission a Current Report on Form
8-K dated July 24, 2003 reporting our ongoing Phase II trial for
PEG-Camptothecin for the treatment of gastric and gastroesophageal junction
cancers has met its interim safety and efficacy criteria and will be advanced
for that indication.

         On August 13, 2003, we filed with the Commission a Current Report on
Form 8-K dated August 13, 2003 reporting our financial results for the fourth
quarter and fiscal year ended June 30, 2003.



                                       24
<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)



Date: September 27, 2005                  By: /s/Jeffrey H. Buchalter
                                              ---------------------------
                                              Jeffrey H. Buchalter
                                              Chairman, President and
                                              Chief Executive Officer
                                              (Principal Executive Officer)



Date: September 27, 2005                  By: /s/Craig A. Tooman
                                              ----------------------------
                                              Craig A. Tooman
                                              Executive Vice President, Finance
                                              and Chief Financial Officer
                                              (Principal Financial
                                              Officer)



                                       25