Accounts Payable and Accrued Expenses

12 Months Ended

Dec. 31, 2018

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

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Accounts Payable and Accrued Expenses

In March 2017, Merck notified the Company that it had overpaid it approximately $770,000 in royalties (net of a 25% royalty interest that the Company had previously sold) during the second and third quarters of 2016. This was due to a previous misunderstanding regarding the date on which the Company’s right to receive royalties from U. S. sales of PegIntron expired, which Merck advised had occurred in February 2016. Merck notified the Company that it intended to recover such overpayment from the Company by reducing future royalties to which the Company would otherwise be entitled from Merck until the full amount of the overpayment has been recouped. Accordingly, at December 31, 2016, the Company recorded a liability to Merck of approximately $770,000.

In the second quarter of 2017, Merck notified the Company that they discovered additional overpayments to the Company resulting from their inaccuracy as to the date on which the Company’s right to receive royalties from various countries’ sales of PegIntron expired. Such net overpayment to the Company aggregated approximately $564,000 in royalties during 2015 and 2016. Merck notified the Company that it intended to recover such overpayment from the Company by reducing future royalties to which the Company would otherwise be entitled from Merck until the full amount of the overpayment had been recouped. In the third quarter of 2017, Merck again notified the Company that, based on rebates and returns of PegIntron products, they had deducted a net amount of approximately $150,000 from aggregate royalties that were otherwise due to Enzon. The Company took exception to certain of the deductions taken by Merck as being inappropriate. In the fourth quarter of 2017, Merck corrected such deductions and added a net $111,000, to the royalties that were otherwise due to the Company. The aggregate amount of royalties earned from Merck during 2017 was approximately $1.3 million. In March 2018, Merck notified the Company that an additional adjustment of approximately $313,000 was necessary, primarily, due to returns from sales in China in the fourth quarter of 2017. Merck will recoup this through deductions from future royalties otherwise payable to the Company. Accordingly, the Company recorded an aggregate reduction for overpayments, rebates and returns of approximately $1.6 million from the gross royalties earned during 2016 and 2017, leaving a balance due to Merck of approximately $225,000. This was recorded as a payable at December 31, 2017.

In January 2018, Merck paid the $88,000 to the Company, which increased the liability to $313,000. During the second quarter of 2018, Enzon earned approximately $60,000 of royalties, which reduced the royalty payable to Merck to $253,000. During the third quarter of 2018, Merck notified the Company of an additional recoupment of approximately $280,000, resulting primarily from product rebates and returns. In the fourth quarter of 2018, Enzon earned approximately $94,000 of royalties. Accordingly, the liability to Merck was $439,000 at December 31, 2018.

Accrued expenses and other current liabilities consist of the following as of December 31, 2018 and 2017 (in thousands):

	December 31,		December 31,
	2018		2017
Professional and consulting fees	$	78	$	142
Other		-		1
	$	78	$	143