Enzo Biochem Reports Record Revenues and Profits in Fiscal 1999.

FARMINGDALE, N.Y.--(BUSINESS WIRE)--Oct. 27, 1999--

Enzo Biochem, Inc. (ASE:ENZ), a leading biotechnology company specializing in genetic modulation and immune modulation technologies for diagnostic and therapeutic applications, today reported record operating results with net income increasing 92.1% for the fiscal year ended July 31, 1999 and increasing 99.6% in the fourth fiscal quarter.

"This has been a very exciting year for Enzo, due, not only to our solid financial performance, but also to the product and technology advances we have made during the year. A strong cash flow has enabled our Company to further broaden the base of our growing proprietary DNA labeling and gene sequencing business and to continue to achieve major advances in therapeutic product development," said Barry Weiner, Enzo's President.

For the year ended July 31, 1999, operating revenues amounted to $44,319,000, compared to $40,417,000 in the prior year. Net income totaled $6,515,000, up from $3,392,000 in fiscal 1998, with net per share rising to $0.26 on both a primary and diluted basis, compared to $0.13 diluted ($0.14 primary) last year, a 100% increase.

In the fourth quarter, operating revenues amounted to $10,600,000, compared with $10,080,000 in the corresponding year-ago period. Net income for the quarter approximately doubled, to $2,810,000, from $1,408,000 a year earlier. Net per share on both a primary and diluted basis amounted to $0.11, compared with $0.06 on the same basis last year, an 83% gain.

Revenues from our proprietary DNA labeling and detection products sold to the worldwide medical research and gene sequencing markets increased 28.6% for the year, while gross profit from this segment rose approximately 65%. Enzo Clinical Labs, as well, improved operating results over fiscal 1998. Even with a continued pressure towards cost containment and reimbursement by insurance carriers, Enzo Labs was able to increase its operating profits by over 7%.

Cash and cash equivalents increased by $9.6 million for the year even while research and development expenses rose 11.1% to $4.4 million. General and administrative expenses as a percentage of revenues improved to 17.1%, from 18.9% in the prior year.

Working capital at the fiscal 1999 year-end totaled $59.3 million, including cash and cash equivalents of $43.2 million. Stockholders equity totaled a record $75.6 million. There is no debt.

"Enzo is beginning to recognize the value of its 20 years of research and product development. Our extensive patent estate is being recognized and the products produced using our proprietary technologies are being sold world wide. As our therapeutic products move through the pipeline, we look forward, with excitement, to a new era in healthcare based on these novel medicines."

Enzo Therapeutics

Fiscal 1999 was a year of significant accomplishment for Enzo Therapeutics, our subsidiary involved in the development of medicines based on gene modulation and immune modulation modalities. Phase 1 clinical trials are underway at the University of California, San Francisco for the Company's therapeutic product for HIV infection based on HGTV 43, its gene transfer vector. This vector, trademarked StealthVector, has been shown in laboratory studies to attain levels of stable gene transfer to non-growing blood stem cells greater than 30%, compared with industry reported values less than 1% using retrovirus vectors. These levels of transduction achieved by Enzo in non-growing cells represent a technical breakthrough in the development of commercially viable gene medicine. Meanwhile, research continues on application of Enzo's gene modulation technology to hepatitis and the management of cholesterol, among others.

In the area of immune modulation, Enzo has launched a human clinical trial for patients infected with hepatitis B virus. The trial involves oral administration of specific hepatitis B proteins and is aimed at controlling the anti-viral immune response to the hepatitis B virus. The trial is being conducted at Hadassah University Hospital in Jerusalem, Israel. The application of immune modulation therapy to treat such other conditions as graft versus host disease and inflammatory bowel disease, including Crohn's disease and ulcerative colitis is in the preclinical phase.

Enzo Diagnostics

Enzo Diagnostics continued to add to its worldwide distribution network for both the medical research and gene sequencing markets. Among the companies entering into distribution agreements was NEN Life Science Products, Inc., formerly part of E. I. DuPont Co.. Enzo also concluded a distribution agreement with Gene Logic, Inc., under which the Company will be the exclusive supplier of its patented reagent products for labeling and detecting gene sequences with Gene Logic Flow-thru Chip(TM) probe arrays.

This past year Enzo received a patent in Japan for a key segment of its nucleic and probe technology that permits a wide number of genetic analyses to be performed simultaneously on genomic specimens, and to measure the quantity of each of a number of different nucleic acids present in a single sample. All told, Enzo currently has a patent estate covering approximately 200 patents, and a like number of patent applications currently pending worldwide. The Company manufactures well over 200 DNA labeling and detection products.

Sales of Enzo Diagnostics' products from the distribution agreements and from those sold directly by the Company have contributed significantly to Enzo's recent growth in revenues and profitability. The Company continues to evaluate its approach to reach the much larger clinical markets for its diagnostic products.

Enzo Clinical Labs

Enzo Clinical Labs achieved higher record revenues and increased its level of profitability, even in a market characterized by changing reimbursement policies of third party providers, relative maturity and industry consolidation. Enzo Labs continues to expand its testing capabilities and provide the highest quality of service to the medical community. The volume of tests performed at the laboratory has increased - and a variety of new services and tests are being offered to our client physicians. We are continually expanding our information management system to help the physicians more rapidly access diagnostic information on their patients.

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.

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
                                    Fiscal Year Ended Three Months Ended
                                          July 31,          July 31,
                                       1999      1998    1999     1998
                                                           unaudited
                                                           ---------
                            (in thousands, except per share data)
                             -----------------------------------
Operating revenues                   $44,319  $40,417  $10,600  $10,080

Income before benefit for
     income taxes                     $5,387   $2,570   $1,529     $485

Benefit for income taxes              $1,128     $821   $1,281     $923
                                      ------     ----   ------     ----

Net income                            $6,515   $3,392   $2,810   $1,408
                                      ======   ======   ======   ======

Net income per common share - Basic    $0.26    $0.14    $0.11    $0.06
                                       =====    =====    =====    =====
Net income per common share - Diluted  $0.26    $0.13    $0.11    $0.06
                                       -----    -----    -----    -----

Common Share - Basic                  24,933   24,653   24,939   24,580
Common Share - Diluted                25,477   25,746   25,487   25,530


                      SELECTED BALANCE SHEET DATA

                                    Fiscal Year Ended
                                          July 31,
                                      1999     1998
                                      (in thousands)
                                       ------------
Cash and Cash Equivalents            $43,218  $33,543
Working Capital                      $59,323  $52,973
Stockholders' Equity                 $75,648  $68,783