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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 FOR QUARTERLY PERIOD ENDED MARCH 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 Commission File Number: 0-20117
 ENCYSIVE PHARMACEUTICALS INC.
 
  Delaware
    
    13-3532643(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
  
   
   
   þ o
  o þ o
 o þ
  Class
    
    Outstanding at April 30, 2006Common stock, $0.005 par value
    
    59,196,917




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##### 



ENCYSIVE PHARMACEUTICALS INC.
 TABLE OF CONTENTS
 PAGE NO.Part I. Financial InformationItem 1: Financial Statements (Unaudited)Consolidated Balance Sheets as of March 31, 2006 and December 31, 2005
    
    1Consolidated Statements of Operations and Comprehensive Loss for the
three months ended March 31, 2006 and 2005
    
    2Consolidated Statements of Cash Flows for the three months ended
March 31, 2006 and 2005
    
    3Notes to Consolidated Financial Statements
    
    4Item 2: Managements Discussion And Analysis Of
Financial Condition And Results Of Operations
    
    11Item 3: Quantitative And Qualitative Disclosures
About Market Risk
    
    20Item 4: Controls And Procedures
    
    20Part II. Other InformationItem 1: Legal Proceedings
    
    20Item 1A: Risk Factors
    
    20Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
    
    24Item 3: Defaults Upon Senior Securities
    
    24Item 4: Submission Of Matters To A Vote Of Security Holders
    
    25Item 5: Other Information
    
    25Item 6: Exhibits
    
    25SIGNATURES
    
    26Certification of CEO pursuant to Rule 13a-14a/15d-14aCertification of CFO pursuant to Rule 13a-14a/15d-14aCertification Pursuant to Section 906Certification Pursuant to Section 906




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ENCYSIVE PHARMACEUTICALS INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share data)
(Unaudited)
 March 31,
    
    
    December 31,2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    100,529
    
    
    $
    127,913Accounts receivable
    
    
    3,330
    
    
    
    5,337Other current receivables
    
    
    65
    
    
    
    139Inventory
    
    
    2,531
    
    
    
    2,183Prepaids
    
    
    2,308
    
    
    
    1,677Total current assets
    
    
    108,763
    
    
    
    137,249Equipment and leasehold improvements, net
    
    
    6,128
    
    
    
    4,942Deferred debt origination costs, net of
accumulated amortization of $702 and $538
    
    
    3,961
    
    
    
    4,125Intangible assets, net of accumulated
amortization of $606 and $580
    
    
    360
    
    
    
    386Total assets
    
    $
    119,212
    
    
    $
    146,702LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Accounts payable
    
    $
    4,475
    
    
    $
    3,218Accrued expenses
    
    
    20,634
    
    
    
    21,645Deferred revenue
    
    
    1,288
    
    
    
    1,288Total current liabilities
    
    
    26,397
    
    
    
    26,151Deferred revenue
    
    
    964
    
    
    
    1,286Long-term debt
    
    
    130,000
    
    
    
    130,000Commitments and contingencies
    
    
    
    
    
    
    Stockholders deficit:Preferred stock, par value $.005 per share. 5,000,000 Shares authorized; none issued or outstanding
    
    

    
    
    
    Common stock, par value $.005 per share.
150,000,000 shares authorized. At March 31, 2006,
59,399,894 shares issued, 59,186,894 outstanding;
at December 31, 2005, 58,869,398 shares issued,
58,656,398 shares outstanding
    
    
    297
    
    
    
    294Additional paid-in capital
    
    
    306,121
    
    
    
    306,402Deferred compensation expense
    
    
    
    
    
    
    (2,834
    )Treasury stock, 213,000 shares at March 31, 2006
and December 31, 2005
    
    
    (1,602
    )
    
    
    (1,602
    )Accumulated deficit
    
    
    (342,965
    )
    
    
    (312,995
    )Total stockholders deficit
    
    
    (38,149
    )
    
    
    (10,735
    )Total liabilities and stockholders deficit
    
    $
    119,212
    
    
    $
    146,702
 See accompanying notes to consolidated financial statements
 1




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ENCYSIVE PHARMACEUTICALS INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
($ in thousands, except per share data)
(Unaudited)
 Three Months Ended March 31,2006
    
    
    2005Revenues:Royalty income
    
    $
    3,239
    
    
    $
    2,346License fees and milestones
    
    
    322
    
    
    
    140Total revenues
    
    
    3,561
    
    
    
    2,486Expenses:Research and development
    
    
    18,379
    
    
    
    16,315Sales and marketing
    
    
    9,836
    
    
    
    1,117General and administrative
    
    
    5,742
    
    
    
    2,594Total expenses
    
    
    33,957
    
    
    
    20,026Operating loss
    
    
    (30,396
    )
    
    
    (17,540
    )Investment income
    
    
    1,299
    
    
    
    594Interest expense
    
    
    (980
    )
    
    
    (171
    )Loss from continuing operations
    
    
    (30,077
    )
    
    
    (17,117
    )Loss from discontinued operations
    
    
    
    
    
    
    (326
    )Loss before cumulative effect of change
in accounting principle
    
    $
    (30,077
    )
    
    $
    (17,443
    )Cumulative effect of change in accounting principle
    
    
    107
    
    
    
    Net loss applicable to common shares
    
    $
    (29,970
    )
    
    $
    (17,443
    )Other comprehensive income:Unrealized gain on foreign currency translation
    
    
    
    
    
    
    33Comprehensive loss
    
    $
    (29,970
    )
    
    $
    (17,410
    )Loss per share:Net loss per share, basic and diluted
    
    $
    (0.51
    )
    
    $
    (0.30
    )Weighted average common shares used to compute
Net loss per share basic and diluted
    
    
    58,270,138
    
    
    
    57,655,886
 See accompanying notes to consolidated financial statements
 2




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ENCYSIVE PHARMACEUTICALS INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
 Three Months Ended March 31,2006
    
    
    2005Cash flows from operating activities:Net loss
    
    $
    (29,970
    )
    
    $
    (17,443
    )Adjustments to reconcile net loss to cash used
In operating activities:Depreciation and amortization
    
    
    188
    
    
    
    236Expenses paid with stock
    
    
    50
    
    
    
    480Share-based compensation expense
    
    
    2,087
    
    
    
    61Amortization of debt issue costs
    
    
    164
    
    
    
    37Amortization of discount/premium on investments
    
    
    
    
    
    
    (7
    )Loss on disposition of fixed assets
    
    
    28
    
    
    
    7Change in interest receivable included in
short-term investments
    
    
    
    
    
    
    (14
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    2,007
    
    
    
    2,503Inventory
    
    
    (348
    )
    
    
    Prepaids
    
    
    (631
    )
    
    
    (1,075
    )Other current receivables
    
    
    74
    
    
    
    103Accounts payable and accrued expenses
    
    
    246
    
    
    
    1,867Deferred revenue
    
    
    (322
    )
    
    
    1,860Net cash used in operating activities
    
    
    (26,427
    )
    
    
    11,385Net cash used in discontinued operation
    
    
    
    
    
    
    (107
    )Net cash used in operating activities
    
    
    (26,427
    )
    
    
    (11,492
    )Cash flows from investing activities:Purchases of equipment and leasehold improvements
    
    
    (1,376
    )
    
    
    (1,100
    )Purchases of investments
    
    
    
    
    
    
    (63,362
    )Maturity of investments
    
    
    
    
    
    
    27,913Net cash used in investing activities
    
    
    (1,376
    )
    
    
    (36,549
    )Cash flows from financing activities:Borrowing of long-term debt
    
    
    
    
    
    
    130,000Debt issue costs
    
    
    
    
    
    
    (4,641
    )Proceeds from option exercises
    
    
    419
    
    
    
    261Net cash provided by financing activities
    
    
    419
    
    
    
    125,620Effect of exchange rate changes on cash
    
    
    
    
    
    
    (19
    )Net decrease (increase) in cash and cash
equivalents
    
    
    (27,384
    )
    
    
    77,560Cash and cash equivalents at beginning of period
    
    
    127,913
    
    
    
    46,130Cash and cash equivalents at end of period
    
    $
    100,529
    
    
    $
    123,690Supplemental schedule of cash flow information:Interest paid
    
    
    1,625
    
    
    
    3
 See accompanying notes to consolidated financial statements
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ENCYSIVE PHARMACEUTICALS INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2006 (unaudited)
 (1)
    
    Basis of Presentation
  (2)
    
    Organization and Significant Accounting Policies
 (a)
    
    Organization
   (b)
    
    Basis of Consolidation
  4




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(c)
    
    Share-Based Payment
 Accounting for Stock Issued to Employees Share-Based Payment
  (d)
    
    Debt Issue Costs
  (e)
    
    Use of Estimates
  (f)
    
    Reclassifications
  5




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(3)
    
    Inventory
  (4)
    
    Capital Stock
  Stock option plans
    
    
    8,080,5852.50% Convertible Senior Notes due 2012
    
    
    9,322,001Total shares reserved
    
    
    17,402,586
 (5)
    
    Cash, Cash Equivalents, and Short-Term Investments
  (6)
    
    Net Loss per Common Share
  (7)
    
    Income Taxes
  (8)
    
    Entity-Wide Geographic Data
  6




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Three Months Ended March 31,2006
    
    
    2005Entities:GSK
    
    $
    3,239
    
    
    $
    2,346Schering-Plough
    
    
    322
    
    
    
    140Total
    
    $
    3,561
    
    
    $
    2,486
 (9)
    
    Long-Term Debt
    (10)
    
    Share-Based Payment
     7




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Three Months Ended(In thousands, except per share amounts)
    
    March 31, 2005Net loss, as reported
    
    $
    (17,443
    )Add: Total stock-based employee compensation
expense included in reported net loss
    
    
    13Deduct: Total stock-based employee compensation
expense determined under fair value based method
for all awards
    
    
    (1,018
    )Pro forma net loss
    
    $
    (18,448
    )Loss per share:As reported, basic and diluted
    
    $
    (.30
    )Pro forma, basic and diluted
    
    $
    (.32
    )
    8




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Three Months EndedMarch 31,2006
    
    2005Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Risk-free interest rate
    
    
    4.6
    %
    
    
    4.2
    %Expected volatility
    
    
    64.4
    %
    
    
    69.3
    %Expected life in years
    
    
    4.0
    
    
    
    4.9
  Weighted
    
    
    Weighted Average
    
    
    AggregateStock
    
    
    Average
    
    
    Remaining
    
    
    Intrinsic ValueOptions
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    (in Thousands)Outstanding
at December 31, 2005
    
    
    5,340,142
    
    
    $
    8.07
    
    
    
    6.63Grants
    
    
    512,958
    
    
    $
    8.85Forfeited or expired
    
    
    (46,081
    )
    
    $
    9.85Exercises
    
    
    (96,614
    )
    
    $
    4.34Outstanding
at March 31, 2006
    
    
    5,710,405
    
    
    $
    8.18
    
    
    
    6.75
    
    
    $
    2,050Vested and expected to vest
in the future at
March 31, 2006
    
    
    5,666,262
    
    
    $
    8.17
    
    
    
    0.46
    
    
    $
    2,050Exercisable
at March 31, 2006
    
    
    3,886,054
    
    
    $
    7.38
    
    
    
    5.70
    
    
    $
    2,000Available for grant at
March 31, 2006
    
    
    2,370,180
  9




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Weighted AverageGrant DateShares
    
    
    Fair ValueNonvested at December 31, 2005
    
    
    441,923
    
    
    $
    8.60Activity during quarter ended March 31, 2006Grants
    
    
    436,659
    
    
    $
    8.85Vested
    
    
    (127,438
    )
    
    $
    2.84Forfeited
    
    
    (12,870
    )
    
    $
    11.22Nonvested at March 31, 2006
    
    
    738,274
    
    
    $
    9.69
  (11)
    
    Commitments and Contingencies
 (a)
    
    Foreign Currency Exchange Risk
  (b)
    
    Other contingencies
  10




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Item 2.
 ENCYSIVE PHARMACEUTICALS INC. AND SUBSIDIARIES
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Three Months Ended March 31, 2006, and March 31, 2005
 OVERVIEW
     11




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12




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A,
 
      Critical Accounting Policies
 Revenue Recognition
 
    
    We recognize royalty revenue as a licensee sells products and we have received sufficient
information to record a receivable. Our royalty revenue is based on net sales of product,
that is, sales net of discounts, returns and allowances. Argatroban is licensed to GSK,
which distributes and sells the product, and from which we receive a quarterly royalty
payment. At the time of each payment, GSK provides us with limited quarterly data related
to the products gross sales, sales returns, discounts and allowances. While we are
informed of the amount of
product returns recorded each quarter, we do not have information necessary to identify the
period or periods to which such returns correspond. We believe that substantially all
discounts and allowances pertain
 13




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to current period sales. We also believe that a portion of sales recorded in each period
will ultimately be returned, and therefore estimate future returns and their impact on
royalty revenues. In the pharmaceutical industry, product returns are primarily
influenced by remaining or expired shelf life, product withdrawals or recalls, significant
price changes from competitors or the introduction of generic products or other new
competition. We are not aware of any pending product recalls or withdrawals, significant
price fluctuations or generic or new competition. Accordingly, we have estimated only the
impact of product dating on returns.Since we do not manufacture, sell or distribute Argatroban, we do not have information
related to levels of inventory in the distribution channels. However, due to the cost of
the drug and pressures on hospitals to minimize operating expenditures, we believe
inventory levels are maintained at a minimally acceptable level. Inventory level is
therefore not a part of the Companys estimate process.We have estimated remaining shelf life, which is an important reason for product returns,
based upon the fact that Argatroban has an expiration date of two years from manufacture.
Common industry practice is that prescription drugs can be returned to the manufacturer at
any time; however, product is normally returned when the remaining shelf life is reduced to
six months or less. Our reserve is therefore based upon an estimate of the percentage of
sales made in the preceding 18-month period that may be returned in future periods.
Initially, lacking any historical sales data for Argatroban and based upon managements
experience with other pharmaceutical products in the industry, management estimated that
four percent of gross sales of Argatroban would be returned during future periods. Based
upon subsequent analysis of historical sales data, we believe that differences between
estimated and actual future returns will not have a material effect upon our results of
operations or financial condition.
    
    Revenue from collaborative research and development activities is recognized as
services are performed.
    
    We defer the recognition of milestone payments related to contractual agreements that
are still in the development stage. Such deferred revenues are amortized into income over
the estimated remaining development period. Milestone payments received under contractual
agreements which have completed the development stage are evaluated, and either recognized
into income when earned, or amortized over a future period, depending upon whether we
continue to have obligations under the terms of the arrangement.
    
    License fees received under the terms of licensing agreements for our intellectual
property are deferred and amortized into income over the estimated development period of
the licensed item or items.
    
    Revenue from grants is recognized as earned under the terms of the related grant
agreements, typically as expenses are incurred.
  Stock Options
 Accounting
for Stock Issued to Employees
 14




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Share-Based Payment
 Drug Manufacturing and Packaging
  Costs Related to Issue of Long-Term Debt
  Results of Operations
  15




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Three month periods ended March 31, 2006 and 2005
 Revenues
  Research and Development Expense
  Sales and Marketing Expense
  General and Administrative Expense
  Total Operating Expenses
  16




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Operating Loss
  Interest Expense
  Investment Income
  Loss on discontinued operations
  Liquidity and Capital Resources
     Material Commitments
  17




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Less than
    
    
    1-3
    
    
    3-5
    
    
    After 5Contractual Obligations
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    yearsLong-term debt
    
    $
    130,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    130,000Operating leases
    
    
    3,188
    
    
    
    1,812
    
    
    
    1,376
    
    
    
    
    
    
    
    Purchase
obligations
    
    
    211
    
    
    
    211
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    133,399
    
    
    $
    2,023
    
    
    $
    1,376
    
    
    $
    
    
    
    $
    130,000
 Outlook for 2006
  Longer-Term Outlook
  
    
    In anticipation of receiving regulatory approval for Thelin, we have incurred and will
incur significant commercialization expenses. These costs include:
 
    
    market research;
    
    hiring a general counsel, vice president of sales, chief financial officer, chief
operating officer and other key staff personnel;
    
    hiring a marketing and field sales force in the U.S., Canada and Europe;
    
    establishing appropriate infrastructure to support the field sales force;
    
    preparation and production of educational and promotional materials;
    
    engaging an advertising agency to support our product promotion;
    
    hiring personnel and engaging third party support to administer reimbursement from
government and private third-party payers; and
    
    establishing manufacturing, warehousing and distribution processes for our
products.
 
    
    We expect to incur significant expenses in conjunction with additional clinical trial
costs for our ongoing long-term safety study of Thelin, for clinical trials in additional
indications for
 18




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
    
    hiring personnel to direct and carry out all operations related to clinical trials;
    
    hospital and procedural costs;
    
    services of a contract research organization; and
    
    purchasing and formulating large quantities of the compound to be used in such trials.
  
    
    expenses and risks associated with clinical trials to expand the indications for Thelin;
    
    regulatory approval of Thelin, including breadth of approved label;
    
    continued scientific progress in our drug discovery programs;
    
    the magnitude of these programs;
    
    progress with preclinical testing and clinical trials;
    
    the time and costs involved in obtaining regulatory approvals;
    
    the costs involved in filing, prosecuting and enforcing patent claims;
    
    competing technological and market developments and changes in our existing research
relationships;
    
    increased administrative costs and costs to commercialize our products as our products
are further developed and marketed;
    
    working capital requirements to support inventory and accounts receivable;
    
    our ability to maintain and establish additional collaborative arrangements; and
    
    effective commercialization activities and arrangements.
  Off-Balance Sheet Arrangements
  19




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Impact of Inflation and Changing Prices
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Foreign Currency Exchange Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
    Changes in Internal Controls Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
 Unless we receive regulatory approval for Thelin, we will not be able to achieve profitability
for the foreseeable future.
  20




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We have a history of losses and we may never become profitable.
  If we are unable to raise additional capital if needed, we will be unable to conduct our
operations and develop our potential products.
   
    
    We have incurred and will continue to incur significant commercialization expenses for
Thelin. These costs include:
 
    
    market research,
 21




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
    
    hiring a chief financial officer, chief operating officer, general counsel,
vice president of sales, and other key staff personnel,
    
    hiring a marketing and field sales force in the U.S., Canada and Europe;
    
    establishing appropriate infrastructure to support the field sales force;
    
    preparation and production of educational and promotional materials;
    
    engaging an advertising agency to support our product promotion;
    
    hiring personnel and engaging third party support to administer reimbursement
from government and private third-party payers; and
    
    establishing manufacturing, warehousing and distribution processes for our
products.
 
    
    We expect to incur significant expenses in conjunction with additional clinical trial
costs for our ongoing long-term safety study of Thelin, for clinical trials in additional
indications for Thelin and for clinical trials related to additional compounds. These
costs include:
 
    
    hiring personnel to direct and carry out all operations related to clinical trials;
    
    hospital and procedural costs;
    
    services of a contract research organization; and
    
    purchasing and formulating large quantities of the compound to be used in such trials.
  
    
    expenses and risks associated with clinical trials to expand the indications for Thelin;
    
    regulatory approval of Thelin including breadth of approved product label;
    
    continued scientific progress in our drug discovery programs;
    
    the magnitude of these programs;
    
    progress with preclinical testing and clinical trials;
    
    the time and costs involved in obtaining regulatory approvals;
    
    the costs involved in filing, prosecuting and enforcing patent claims;
    
    competing technological and market developments and changes in our existing research
relationships;
    
    our administrative costs and costs to commercialize our products will increase as our
products are further developed and marketed;
    
    working capital requirements to support inventory and accounts receivable;
    
    our ability to maintain and establish additional collaborative arrangements; and
    
    effective commercialization activities and arrangements.
  22




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We face substantial competition that may result in others developing and commercializing
products more successfully than we do.
   
    
    A number of companies have endothelin receptor antagonists, or ETRA, compounds either
on the market, or in clinical development.
 
    
    Actelion Ltd., a biotechnology company located in Switzerland,
markets Tracleer® (bosentan) an oral compound for the treatment of PAH
in the United States, Europe, Japan and other countries and they continue to
develop bosenatan for other indications. Actelions compound, bosentan, will
compete directly with Thelin.
    
    Myogen, Inc. is evaluating ambrisentan, an oral endothelin receptor
antagonist, in PAH and has announced that it intends to file an NDA with the FDA
in the fourth quarter of 2006. GSK has the right to market ambrisentan in all
territories outside the U.S. If Myogens compound receives regulatory approval, it
will compete directly with Thelin.
    
    Abbott Laboratories is developing atrasentan for treatment of cancer
and we cannot assure you that it will not compete with Thelin.
    
    Speedel is developing SPP301, which started Phase III clinical
development for diabetic nephropathy in July 2005.
 
    
    In addition to ETRA compounds, other agents are being marketed or developed for the
treatment of PAH.
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
    
    Pfizer Inc. markets Revatio (sildenafil citrate) in PAH for patients
in WHO Group I. We believe that phosphodiesterase type-5 inhibitors such as
Revatio may be used as first-line therapy and as additive or combination therapy
with endothelin antagonists.
    
    Myogen markets Flolan® (epoprostenol), a vasodilator requiring
continuous infusion through a central venous catheter and special infusion pump in
the U.S. Outside the U.S., Flolan is marketed by GSK. Flolan is costly, is
associated with significant adverse events including those related to its
delivery, and is typically reserved by clinicians for patients with the most
severe symptoms, WHO functional class IV status.
    
    CoTherix, Inc. markets Ventavis® (iloprost), an inhalation solution
for the treatment of PAH in WHO Group I, patients with NYHA Class III or IV
symptoms in the U.S. Ventavis® is marketed outside the U.S. by Schering, A.G. or
one of its subsidiaries. During clinical trials, Ventavis® was administered six
to nine times a day.
    
    United Therapeutics Corporation markets Remodulin® (treprostinil
sodium injection), a prostaglandin analog that is required to be administered
subcutaneously or intravenously through an infusion pump, and is also being
studied for potential use through inhalation
  
    
    Refludan®, which was approved by the FDA in 1997 for the treatment of HIT;
    
    Orgaran®, which is a low molecular weight heparinoid that has been approved
for the treatment of deep vein thrombosis, but is believed to be used without an approved
indication (off-label) for the treatment of HIT in the U.S.; and
    
    Angiomax®, which is approved for use in the U.S. as an anticoagulant in
patients with unstable angina undergoing percutaneous transluminal coronary angioplasty
and for the treatment of HIT.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  24




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 Exhibit No.
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / Rule
15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / Rule
15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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##### Table of Contents



ENCYSIVE PHARMACEUTICALS INC.
 May 10, 2006
 
 SIGNATURES
  ENCYSIVE PHARMACEUTICALS INC.By:
    
    /s/ Bruce D. Given, M.D.Bruce D. Given, M.D.President and Chief Executive OfficerBy:
    
    /s/ Gordon H. BusenbarkGordon H. BusenbarkChief Financial Officer(Principal Financial and Accounting Officer)
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##### Table of Contents



INDEX TO EXHIBITS
 Exhibit No.
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / Rule
15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / Rule
15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.