Introduction

Enzon Pharmaceuticals, Inc. (Enzon) is committed to the development and commercialization of therapeutics to treat life-threatening diseases. Enzon’s commitment is driven by corporate values that focus on people, passion, performance, pride and a steadfast commitment to delivering on our promises. These corporate values describe who we are and how we conduct ourselves, and are founded on a corporate commitment to excellence.

Building trust among our customers and peers is critical to our success. Accordingly, it is important that we conduct our business with honesty and integrity and in compliance with all applicable legal and regulatory requirements. Enzon’s Corporate Code of Conduct (“Code of Conduct”) is a statement of our fundamental principles of business conduct and ethics. The Code of Conduct applies to all Enzon employees, whether an entry-level employee, the CEO, or others who act on Enzon’s behalf. The Code of Conduct requires compliance with federal, state, and local laws and regulations wherever Enzon conducts business.

In addition to its Code of Conduct, each Enzon business sector adopted policies and procedures designed to implement the general principles articulated in the Code of Conduct. These are corporate policies governing a broad range of topics. Included in this broad set of policies are specific policies and procedures that address the major risk areas discussed in the OIG Compliance Program Guidance for Pharmaceutical Manufacturers published by the U.S. Department of Health and Human Services, Office of Inspector General in May 2003 (hereinafter “OIG Guidance”). Enzon’s written policies in this area are also consistent with the provisions of the Code on Interactions with Healthcare Professionals created by the Pharmaceutical Research and Manufacturers of America (“PhRMA Code”).

Recognizing that compliance is a fundamental value and key asset of the Company, Enzon established a comprehensive compliance program that governs marketing, sales and medical information activities. Enzon’s Global Business Management Healthcare Compliance Program is consistent with the general principles of the OIG Guidance and the PhRMA Code.

The OIG Guidance outlines seven elements that the OIG considers fundamental to establishing a comprehensive compliance program. These elements include:

1. Designation of a Compliance Officer and Compliance Committee;
2. Implementation of written policies and procedures;
3. Education and training programs for affected employees;
4. Developing lines of communication between the Compliance Officer and all employees through hotlines or other means;
5. Conducting internal monitoring and auditing;
6. Enforcing standards through disciplinary guidelines; and
7. Responding promptly to detected problems and undertaking corrective action.

The fundamental elements of Enzon’s Healthcare Compliance Program as it relates to marketing, sales and medical information activities, are described below. As provided for in the OIG Guidance, Enzon’s program is tailored to the unique environment of the Company. Compliance is a dynamic concept; Enzon is committed to reviewing and enhancing its program, at least annually, to meet evolving compliance needs.

Overview of the Global Business Management Healthcare Compliance Program

Chief Compliance Officer and Compliance Committee

The Chief Compliance Officer (“Compliance Officer”) is charged with overall responsibility for the effectiveness of the Healthcare Compliance Program. The Compliance Officer is responsible, either directly or through a designee, for reporting on a regular basis to the Audit Committee and the Board of Directors on the status of the Healthcare Compliance Program.

Enzon hasa Healthcare Compliance Committee consisting of representatives from the functional areas in the Company to advise and assist the Compliance Officer with the implementation of the Healthcare Compliance Program. The Healthcare Compliance Committee focuses on compliance matters related specifically to marketing, sales and medical information activities.

Written Policies and Procedures

Enzon’s Healthcare Compliance Program consists of written policies and procedures that provide requirements and restrictions on a range of activities by marketing, sales and medical affairs personnel to ensure that their activities meet legal requirements and high ethical standards. These policies, which are separate from and in addition to Enzon corporate policies, apply to all employees in the Global Business Management sector of Enzon, as well as other Enzon employees when they are involved in the marketing or sale of pharmaceutical products. For example, Enzon has policies that address the following topics: Enzon-sponsored speaker programs; promotional activities; financial support of independent medical education; consulting arrangements with healthcare professionals; grants for independent medical education; grants to health-related non-profit organizations; activities at medical conventions; meals or gift items intended to benefit patients or relate to a healthcare professional’s practice; and drug information.

Annual Spending Limit for California Healthcare Professionals

As part of its Healthcare Compliance Program, Enzon adopted an annual spending limit for purposes of compliance with the requirements of California Health and Safety Code, Sections 119400-119402 (“ California law”). Copies of this summary of the Enzon Global Business Management Healthcare Compliance Program may be obtained by contacting Enzon at the following toll-free number: 866-258-5601. The Annual Declaration required by the California law is available on this page.

Enzon established an annual spending limit of $1800 on items covered by the California law that are provided to individual California healthcare professionals as part of Enzon’s interactions with healthcare professionals to enhance the practice of medicine or benefit patient care. This dollar amount includes educational or practice-related items and meals associated with informational presentations or discussions, which Enzon employees are permitted to provide to healthcare professionals under Enzon policy.

Enzon’s annual spending limit does not include the following: 1) drug samples, 2) financial support for independent medical education programs, 3) fair market value payments for legitimate professional serv ices to healthcare professionals including speaking, advising, consulting, training or market research services, 4) meals provided at advisory boards and speaker training, 5) research sponsorships, 6) reminder items of minimal value, 7) reprints, 8) printed advertising or promotional materials, and 9) items provided for distribution to patients.

The annual spending limit was communicated to employees in the Enzon Global Business Management sector of the Company. Each employee is expected to manage these expenditures to comply with the annual limits.

Training and Education

An important component of the Healthcare Compliance Program is the training program that communicates the Company’s expectations concerning the ethical and legal obligation of Company personnel. Enzon’s Code of Conduct and corporate policies and procedures are available to employees at all times through the Enzon intranet. The Legal Department oversees the content for all training and the process to ensure it remains relevant and current.

All Company personnel are required to complete annual Code of Conduct training. In addition, all Enzon Global Business Management employees are required to complete training on the Healthcare Compliance Program as a condition of their employment. These employees also undergo periodic re-training and remedial training if needed. New field-based hires and existing field-based employees receive training and undergo testing to ensure compliance with federal laws and regulations and with Enzon’s Healthcare Compliance Program. After this initial training, periodic training of field-based employees is scheduled as needed on relevant policies. Field-based employees in geographies with state specific requirements also receive training specific to their
state law requirements.

All headquarters employees engaged in marketing, sales and medical information activities receive training and undergo testing. This training is designed to ensure compliance with federal and state laws and with Enzon’s Healthcare Compliance Program. From time to time, more specific compliance training is provided as needed, to headquarters employees, that is consistent with their roles and responsibilities
within the Company.

Reporting Mechanisms/Internal Lines of Communication

As part of Enzon’s compliance culture, each employee is expected to ensure that Enzon’s standards of conduct are met. It is expected that employees will seek compliance guidance from their managers when it is needed and that employees will report information concerning possible misconduct.

Enzon has a process that enables employees to report suspected misconduct through e-mail or via a toll-free hotline that permits employees to report suspected misconduct in an anonymous fashion. Company policies prohibit retaliation or retribution of any kind following the good faith reporting of a suspected violation.

Monitoring and Auditing

Consistent with its compliance commitment, Enzon adopted monitoring and auditing processes to detect and investigate suspected breaches of our policies. Enzon will take appropriate disciplinary action, including dismissal, where appropriate, when behavior inconsistent with the Company’s commitment to high ethical standards is detected.

The auditing plan is two-fold and includes assessments focused on specific risk areas to evaluate whether the Healthcare Compliance Program policies and procedures are being followed. In addition, an annual review of the Healthcare Compliance Program is conducted to evaluate internal risk, Enzon’s business practices, and new
regulatory requirements.

Enforcing Standards through Disciplinary Guidelines

Employees are expected to comply with the Healthcare Compliance Program, Code of Conduct, Company policies and procedures and applicable law. The Code of Conduct makes it clear to all employees that, when an employee’s conduct or behavior violates the standards and expectations set by Enzon, appropriate disciplinary action, up to and including dismissal, may be required. Each reported violation is handled on a case-by-case basis based on the specific facts presented. Enzon will undertake disciplinary action when appropriate to address inappropriate conduct.

Addressing Misconduct and Developing Corrective Action

As recognized in the OIG Guidance, the implementation of a compliance program cannot guarantee that improper employee conduct will be entirely eliminated. Nonetheless, it is Enzon’s expectation that employees will comply with our Code of Conduct and the policies established in support of our Code. In the event that Enzon becomes aware of violations of law or Company policy, we will investigate the matter and, where appropriate, take disciplinary action and implement corrective measures to prevent future violations.