Enzo Biochem Reports Record First Quarter Operating Results.

Business Editors

FARMINGDALE, N.Y.--(BUSINESS WIRE)--Dec. 14, 2000

Pre-Tax Operating Profits Increase by 85%

Enzo Biochem, Inc., (NYSE: ENZ), a leading biotechnology company specializing in gene identification and gene regulation technologies for diagnostic and therapeutic applications, today reported record fiscal first quarter revenues and earnings for the three months ended October 31, 2000.

For the first quarter, total operating revenues rose 19.4%, to $13.9 million, compared to $11.6 million in the corresponding year-earlier period. Revenues from research product sales increased 23.8%, to $5.4 million, and revenues from clinical laboratory services advanced 16.7%, to $8.5 million. Income before provision for taxes increased 85%, to $3.0 million, from $1.6 million in the corresponding year-ago period. Fiscal 2001 first quarter net income rose 10.3%, to $1.7 million, compared with $1.5 million a year ago. Per share earnings amounted to $0.07 per share ($0.06 fully diluted), compared to $0.06, basic and diluted, in the year ago first quarter. The tax rate in the first quarter of fiscal 2001 exceeded 40%, compared to 6% in the corresponding year-earlier period. Full utilization of tax-loss carry forwards resulting from years of successive profitability accounts for the higher tax rate.

The strong gain in research sales of life science products reflected increased shipments of labeling and detection reagents for the genomics and sequencing markets, demand for which has been vigorous. In addition, gross profit margins of research product revenues as a percentage of that segment's revenues increased to 66%, from 56% a year ago. Revenues at the clinical reference laboratory operation benefited from an increase in esoteric testing, with the gross profit margins as a percentage of segment revenues having increased to 76% from 72% a year ago. Reflecting Enzo's continued commitment to research and development, R&D expenditures rose 6.8%.

Working capital at October 31, 2000 totaled $75.7 million. Cash and cash equivalents amounted to $53.5 million, an increase of $2.5 million from the prior quarter. Stockholders' equity amounted to $89.3 million. The Company is debt free.

"Fiscal 2001 is off to a strong start, we are pleased to report," said Barry Weiner, Enzo's President. "We are proud of our continued growth and the increase in net income despite the full tax provision Enzo is now incurring. Our Company continues to make significant progress operationally, including a recent approval in Israel for a Phase I clinical trial of Enzo's new proprietary broad-spectrum immune regulation medicine for patients with chronic hepatitis C infection or its associated liver cancer. With three clinical trials currently underway, and strong demand for our extensive line of life sciences products, the outlook remains very favorable for Enzo."

The new hepatitis C trial, now getting underway, is being conducted at the Hadassah Medical Center in Jerusalem, Israel. The Hadassah Medical Center is also the site of the Phase II trial of EHT899, Enzo's proprietary medicine for patients with hepatitis B virus infection. Results of the Phase I study of EHT899 were presented early last month at a liver conference in Dallas. The study showed that 80% of the patients treated with EHT899 responded favorably as measured by a decrease in viral load, decrease in liver inflammation or reduction of elevated levels of liver enzymes.

In addition, at the Dallas liver meeting, researchers reported on preclinical animal studies in which Enzo's immune regulation medicine achieved complete suppression of HBV-associated human liver cancer and significantly reduced mortality in laboratory mice. The studies indicate that the Enzo medicine may have significant potential application for treatment of liver and other cancers in humans. The recently announced hepatitis C and related hepatocellular carcinoma trial is based in part on these animal studies.

Enzo also reported that the Phase I clinical trial of HGTV-43, the Company's HIV-1 gene medicine product, is close to conclusion. Previously reported preliminary evidence indicated all patients in the HGTV-43 trial tolerated the procedure well, and that the genetically engineered blood cells survived in circulation, producing anti-HIV antisense RNA. In addition, data on individuals treated in the trial also showed that the Enzo engineered cells successfully engrafted in the patient's bone marrow and are spawning new differentiated CD4+ cells designed to fight the virus. The Company said it plans to expand the study once the collection and analyzing of the data is completed.

In the life sciences area, Enzo said that demand for its line of labeling and detection products, including its kits and array systems, for the genomics and sequencing markets has been growing. Preliminary plans to increase production of these and other research products for these markets are being considered.

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.

A conference call conducted by Enzo Biochem, Inc. management will take place on Friday December 15, 2000 at 9 A.M. (ET) It can be accessed by dialing [phone]. You will be prompted for PIN number 3394. You may also listen over the Internet through Investor Broadcast Networks' 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 shortly after the call on the Internet.

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. Prospective 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.

                          ENZO BIOCHEM, INC.

                 SELECTED STATEMENT OF OPERATIONS DATA

                                           Three Months Ended
                                              October 31,
                                          2000             1999
                                          ----             ----
                                          (In thousands, except
                                              per share data)
                                                (Unaudited)

Operating revenues                       $13,859             $11,612

Income before provision for income taxes  $2,987              $1,614

(Provision) for income taxes             ($1,314)               ($97)
                                         -------               -----

Net income                                $1,673              $1,517
                                          ======              ======

Net income per common share - Basic        $0.07               $0.06
                                           =====               =====

Net income per common share - Diluted      $0.06               $0.06
                                           -----               -----

Common Share - Basic                      25,652              25,079
Common Share - Diluted                    26,968              26,679


                        SELECTED BALANCE SHEET DATA

                           October 31, 2000       July 31, 2000
                            (Unaudited)
                            (in thousands)

Cash and Cash Equivalents     $53,536             $51,027
Working Capital               $75,663             $73,492
Stockholders' Equity          $89,270             $87,176