Enzo Biochem Reports Record Revenues in Fiscal 1998.

FARMINGDALE, N.Y.--(BUSINESS WIRE)--Oct. 29, 1998--Enzo Biochem Inc. (ASE:ENZ), a leading biotechnology company specializing in gene regulation and gene identification technologies for diagnostic and therapeutic applications, today reported record revenues for the fiscal year ended July 31, 1998.

For fiscal 1998, total revenues increased to $40,417,000, from $34,939,000 in fiscal 1997, a gain of 15.7%. Operating income  advanced 64.4%, to $2,570,000 from $1,564,000 the prior year, and net income climbed 133%, to $3,392,000, or $0.13 per share, based on fully diluted shares, from $1,453,000, or $0.06 per share, last year.

On July 31, 1998, working capital stood at approximately $53 million and cash and equivalents totaled $33.5 million. The company noted that working capital rose $9.7 million over the prior year, showing growth for the fifth consecutive year. Cash flow amounted to $8.3 million. This increase in cash flow for the third consecutive year continues to strengthen our overall financial condition. There is no long-term debt.

"We are obviously very pleased with last year's outstanding results," said Barry W. Weiner, president. "Fiscal 1998 was an excellent year for Enzo Biochem in many ways. In addition to strong operating results, we've made broad progress on the research and product sides, started the company's very first human clinical study, and we've entered into additional significant alliances. It all reflects the tremendous work put into the company over the past years, and it enables us to begin the new year with solid momentum."

In the fourth quarter, total revenues amounted to $10,080,000, compared with $10,317,000 in the corresponding prior year-end quarter. Revenue for the quarter was impacted by a temporary shift in ordering patterns in research product sales from the fourth quarter to the first quarter 1999. Net income for the three months ended July 31, 1998, amounted to $1,408,000, or $0.06 per share, on a diluted basis, compared with $519,000 or $0.02 per share, on the same basis, in the corresponding year-earlier quarter. Fourth quarter and fiscal 1998 results reflected recognition of a deferred tax benefit of $1,025,000 resulting from a reversal of a portion of a deferred tax asset valuation allowance, resulting in tax benefits of $922,000 and $822,000, respectively.

Enzo Biochem reported that revenues from clinical laboratory services last year gained 27.6%, reflecting the benefits of a broader range of specialty test services, expanded facilities and new customers. The year's net income was achieved despite an 11.8% increase in research and development expenditures. However, selling, general and administrative expenses as a percentage of revenues declined to 25.7%, from 29.8%. "Even as we grow the company, we are intent on keeping our costs down," said Weiner.

Enzo Biochem noted that the highlight of the year's activities was clearly the initiation of clinical trials of the company's HIV antisense product at the University of California, San Francisco, utilizing the company's new gene delivery system designed to provide universal and efficient delivery of any gene to any cell. In addition, the company has entered into a research agreement with Hadassah University Hospital in Jerusalem, Israel, regarding new, promising tolerization procedures for treating diseases such as Crohn's Disease and hepatitis B. The company is moving towards human clinical studies with these products as well. The application of Enzo Biochem's proprietary genetic antisense technology to treat hepatitis and the management of cholesterol is also in preclinical evaluation.

The company is anticipating the beginning of revenue flow from new distributors of its research products in the early part of the calendar year 1999 and the company continues in its discussions to explore business opportunities in the clinical diagnostic area.

"The thrust of Enzo Biochem's efforts over the years has been to establish technology platforms having cutting edge application for a wide variety of diseases," said Weiner. "That we have been able to achieve these goals, several of which are now on the threshold of realization, and do so while maintaining a sound, profitable and cash positive organization in an industry where this is seldom the case, is a significant accomplishment."

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. -0-

                          ENZO BIOCHEM INC.
                 SELECTED STATEMENT OF OPERATIONS DATA

                                    Fiscal Ended   Three Months Ended
                                       July 31,          July 31,
                                   1998      1997     1998     1997
                                                         unaudited

                                (in thousands, except per-share data)

Operating revenues               $40,417   $34,939  $10,080  $10,317

Income before benefit (provision)
 for income taxes                 $2,570    $1,564     $486     $605

Benefit (provision) for
 income taxes                       $822     ($111)    $922    ($86)

Net income                        $3,392    $1,453   $1,408     $519

Net income per common share -
 Basic                             $0.14     $0.06    $0.06    $0.02

Net income per common share -
 Diluted                           $0.13     $0.06    $0.06    $0.02

Weighted average common share     24,653    24,162   24,580   24,106