Enzo Biochem Reports Increased Profits for Fiscal Third Quarter and Nine Months; Strong Gains Posted in Products for Genomics Market.

Business Editors/Health & Medical Writers

FARMINGDALE, N.Y.--(BW HealthWire)--June 17, 2002

Enzo Biochem, Inc. (NYSE:ENZ), a leading biotechnology company specializing in gene identification and gene regulation technologies for diagnostic and therapeutic applications, today reported sharply higher net income for the three months ended April 30, 2002.

For the fiscal third quarter, net income amounted to $2.6 million, compared with $1.9 million in the corresponding year-earlier period. Per share earnings, fully diluted, amounted to $0.09, compared with $0.06 a year ago, adjusted for the recent 5% stock dividend. Total operating revenues for the period increased to $15.0 million, compared with $13.9 million in the corresponding year-earlier period.

Nine-month net income amounted to $5.2 million, compared with $5.1 million in the corresponding year-ago period. Fully diluted per share earnings amounted to $0.18, compared with $0.17 in the corresponding year-earlier period. Total operating revenues amounted to $40.2 million, compared with $38.6 million a year earlier. For both the three month and nine month period, as a percentage of total operating revenues, total costs and expenses declined from the respective corresponding year-ago periods.

For the first time in the Company's history, research product revenues at Enzo Life Sciences exceeded revenues from clinical laboratory services. Third quarter research product sales totaled $8.2 million, 70.3% greater than the $4.8 million a year ago, reflecting strong demand for the Company's labeling and detection reagents from the genomics and sequencing markets. Nine month sales of research products increased 48.6% to $18.3 million. Operating profit margins at Enzo Life Sciences and Enzo Therapeutics for the third fiscal quarter amounted to 63.2%, compared with 47.7% a year ago, and for the nine month period equaled 56.9%, compared with 46.3%. The Company began the introduction of its new GeneBeam(TM) labeling and detection system at a recent National Institutes of Health conference. This product is targeted to the worldwide medical research market and will allow expansion of Enzo's product line into a new area of efficient gene discovery. Overall, the Company reported, demand for labeling and detection reagents continues to be strong.

At Enzo Clinical Labs, revenues for the third fiscal quarter amounted to $6.8 million, compared with $9.9 million in the corresponding year ago period, and for the nine months totaled $21.9 million, compared with $26.2 million a year ago. The decline in clinical laboratory services revenue, as reported in the prior quarter, was due primarily to results of an unprofitable contract that was cancelled as of January 21, 2002 and reduced reimbursement rates from various managed care agreements. The absence of this contract and other unprofitable business and associated costs, plus a renewed focus on higher margin testing, resulted in a profitable quarter for the laboratory. Enzo said that it has instituted marketing and cost-containment programs in order to enhance operating results. In addition, the Company reported that Enzo Clinical Labs has brought several new, specialized testing capabilities in-house, including a panel of tests for neural tube defects and chromosomal abnormalities such as Down's syndrome.

Finances remain strong, the Company reported. Net working capital rose to $91.1 million as of April 30, 2002, including cash equivalents of $63.5 million.

"We are pleased with our results, with the progress we are making and especially with the continuing, vigorous performance of Enzo Life Sciences," said Barry Weiner, President. "As the genomics market continues to grow, the sales of our labeling and detection systems for DNA analysis should benefit. The clinical laboratory has been affected by reimbursement pricing over which we have no control, and so we are heavily focused on improving productivity, gaining greater efficiency and adding new testing capabilities that will differentiate the services we provide. We are pleased with the turnaround of the laboratory since refocusing our activities on higher value business. The laboratory continues to be cash flow positive, and we would expect this trend to continue. Enzo Therapeutics, as well, continues to make good progress on a number of fronts. We remain highly enthusiastic regarding the Company's outlook."

At Enzo Therapeutics, the Phase I trial for individuals with Crohn's Disease is in progress. The Company reported that, while final data has not yet been fully compiled, the Phase I trial for EHC18, its oral immune regulation treatment for hepatitis C-associated chronic active hepatitis, has been completed and preliminary data indicate that the trial endpoints have been met. The next phase will be a dose escalation study. In addition, Enzo said that negotiations for a multi-site international Phase II double-blind study for EHT899, its treatment for hepatitis B-associated chronic active hepatitis, were close to the final phase.

On Friday, June 7, 2002, at a meeting of The American Society of Gene Therapy, Enzo presented updated information on the Phase I trial of the Company's proprietary HGTV43 gene medicine for HIV-1 infected individuals. The results indicate that all subjects continue to tolerate the procedure well and that anti-HIV-1 antisense RNA continues to be expressed in all subjects. "The sustained expression of the gene medicine in CD4+ cells strengthens our belief that this gene therapy protocol could function as a once in a lifetime treatment," said Dr. Dean Engelhardt, Executive Vice President of Enzo. "We continue to make progress towards final development of a planned multi-site expanded clinical trial of HGTV43 aimed at expediting and enhancing engraftment, and determining dosage of the engineered cells."

During the last quarter, Enzo was granted U.S. Patent No. 6,358,685 B1. This patent gives the Company broad coverage for strategies for editing genetic defects in vivo, including the correction of many inborn errors of metabolism. This gene editing technology may offer potential approaches for the treatment of diseases based upon an error or mutation of a specific gene sequence within a cell, enabling correction of the defect without interfering with cellular function. Diseases such as sickle cell anemia could potentially be treated with this novel technique.

Third quarter and nine month revenues of Enzo Life Sciences reflect adoption of Issue 00-25, on which the Financial Accounting Standards Board's Emerging Issues Task Force has reached a consensus, and which is effective for fiscal quarters beginning after December 15, 2001. Enzo had previously reported that Issue 00-25 was under review. Effective with the third fiscal quarter, Enzo has commenced reporting revenues from certain non-exclusive distribution agreements on a net basis, including reclassifying all related historical results to conform to the new presentation. The change reflects a new reporting presentation only and will not alter the Company's net income, either historically or in the future.

About Enzo

Enzo Biochem is engaged in the research, development and manufacture of innovative health care products based on molecular biology and genetic engineering techniques, and in providing diagnostic services to the medical community. The Company's proprietary labeling and detection products for gene sequencing and genetic analysis, with approximately 200 patents worldwide, are sold to the life sciences market throughout the world. The Company's therapeutic division is conducting clinical trials for HIV-1-infected patients and for patients infected with hepatitis B and hepatitis C viruses. The Company also holds a patent covering a method and materials for correcting point mutations or small insertions or deletions of genetic material that would allow for editing and correcting certain abnormalities in genes.

Except for historical information, the matters discussed in this news release may be considered "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include declarations regarding the intent, belief or current expectations of the Company and its management. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results. The Company disclaims any obligations to update any forward-looking statement as a result of developments occurring after the date of this press release.

                          ENZO BIOCHEM, INC.
                 SELECTED STATEMENT OF OPERATIONS DATA


                                  Nine Months Ended Three Months Ended
                                        April 30          April 30
                                 ------------------ ------------------
                                    2002       2001     2002      2001
                                    ----       ----     ----      ----
                                                Unaudited
                                  (In thousands except per share data)


Operating revenues               $40,234    $38,565  $15,021   $13,937

Income before provision
 for income taxes                 $8,741     $9,123   $4,291    $3,335
Provision for income
 taxes                           ($3,543)   ($4,024) ($1,740)  ($1,474)

Net income                        $5,198     $5,099   $2,551    $1,861

Net income per common
 share - basic                     $0.18      $0.18    $0.09     $0.07
Net income per common
 share - diluted                   $0.18      $0.17    $0.09     $0.06

Common share - basic              28,442     28,317   28,448    28,349
Common share - diluted            29,381     29,483   29,389    29,294


                                        SELECTED BALANCE SHEET DATA

                                      April 30, 2002     July 31, 2001
                                          (Unaudited)
                                                   (in thousands)

Cash and Cash Equivalents                    $63,542           $58,671
Working Capital                              $91,062           $85,093
Stockholders' Equity                        $102,747           $97,517

A conference call conducted by Enzo Biochem, Inc. management will take place on June 17, 2002 at 8:30 A.M. (ET). It can be accessed by dialing 1- 800-921-9431. International callers can dial 1-973-628-9554. You may also listen over the Internet through World Investor Links' Vcall website, located at www.vcall.com. To listen to the live call on the Internet, please go to the web site at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available through midnight June 30, 2002, shortly following the live call. For replay, dial 1-877-519-4471 (1-973-341-3080 internationally). You will be prompted for PIN number 3332783.