EXHIBIT 99.1
[OBJECT OMITTED] NEWS
RELEASE
-------
ENZO BIOCHEM, INC.
527 MADISON AVENUE
NEW YORK, NY 10022
FOR IMMEDIATE RELEASE
CONTACT: STEVE ANREDER
(212) 532-3232
ENZO BIOCHEM REPORTS OPERATING RESULTS
FOR FISCAL YEAR ENDED JULY 31, 2004
-----------------------
FARMINGDALE, NY, October 14, 2004 -- Enzo Biochem, Inc. (NYSE:ENZ), a
leading biotechnology company specializing in gene identification and genetic
and immune regulation technologies for diagnostic and therapeutic applications,
today reported operating results for the three months and year ended July 31,
2004.
"Fiscal 2004 was a year highlighted by the progress we achieved in our
therapeutic programs, specifically in the Phase II double blind study of
Alequel(TM), Enzo's medicine for Crohn's disease, and in the initiation of the
Phase I/II study of our StealthVector(R) HGTV43(TM) gene construct, Enzo's
therapeutic for managing HIV-1," said Barry Weiner, President. "The year was
also marked by a transition in the marketing strategy of our Life Sciences
division, and a major investment in the infrastructure of our clinical
laboratory. With the additional investments in personnel, information technology
and equipment, we continued to strengthen our core businesses and lay the
groundwork for future growth. Our operating results reflect these investments
and strategic initiatives that we believe will provide long term growth.
Meanwhile, our financial resources remain strong, with in excess of $71 million
in cash and cash equivalents, and marketable securities at year end, thus
assuring our Company of a solid capital position to continue to strengthen the
competitive position of Enzo Clinical Labs, capitalize on our leading
developments in the life sciences and genomics area, vigorously pursue our
promising therapeutics, and achieve what we anticipate will be the successful
prosecution of infringements of our valuable intellectual asset base."
In the fourth quarter ended July 31, 2004, total revenues amounted to
$8.6 million, compared with $10.7 million in the corresponding year-earlier
period. Gross profits totaled $4.2 million, compared with $6.6 million for the
previous fiscal year, and gross margins equaled 48.6%, compared with 61.5% in
the fourth quarter of fiscal 2003. Reflecting a lower tax rate (39.7%, compared
with 46.5% a year ago), the net loss for the fiscal 2004 fourth quarter amounted
to $4.0 million, or ($0.12) per fully diluted share, compared with a net loss of
$2.5 million, or ($0.08) per fully diluted share in last year's fourth quarter.
For all of fiscal 2004, total revenues amounted to $41.6 million,
compared with $52.8 million in the previous year, and gross profit totaled $28.5
million, compared with $39.8 million, with the gross profit margin at 68.5%,
compared to 75.4% in fiscal 2003. The year's net loss amounted to $6.2 million,
or ($0.20) per fully diluted share, compared with net income of $3.8 million, or
$0.12 per share, in fiscal 2003. Working capital at year-end totaled $92.3
million, and cash and cash equivalents and marketable securities amounted to
$71.7 million, a decrease of $6.7 million. Last week, the Company's Board of
Directors declared a 5% stock dividend payable November 15, 2004 to shareholders
of record on October 25, 2004.
Enzo Life Sciences posted fiscal 2004 revenues of $13.0 million,
compared with $23.3 million in the prior year which included $11.5 million in
sales to Affymetrix, Inc., whose contract was terminated by Enzo, and whose
actions are the subject of a lawsuit against Affymetrix brought by the Company.
"While our total sales declined for the year, it should be noted that,
subtracting sales to Affymetrix from the fiscal 2003 total, revenues actually
rose approximately 10% during
- more -
Enzo Biochem, Inc. - Page 2
fiscal 2004, reflecting the early stage in our program to shift sales from
distributors to direct sales," commented Mr. Weiner.
In the fourth quarter, Life Sciences revenue amounted to $2.0 million,
compared to $2.6 million, in the corresponding year-ago period. The shortfall
from the prior year's quarter was due to the actions of one of its distributors,
Roche Diagnostic Systems, in which revenues for products sold under an existing
agreement were not recognized. In addition, the Company had a write-off in the
amount of $1.8 million for a receivable from Roche due to Roche's refusal to
satisfy outstanding invoices from sales previously reported under that same
agreement. The Company is currently in litigation with Roche.
This past year, Enzo Life Sciences completed development of line
extensions for the BioArray(TM) and GeneBeam(TM) products, which are now
reaching the market, in addition to signing a supply agreement with
GlaxoSmithKline related to Enzo's proprietary RNA/DNA labeling, detection and
amplification technology and products. The agreement includes a non-exclusive
license under certain Enzo patents allowing Glaxo to generate genomic
information for research and development activities. A patent covering methods
of nucleic acid amplification was granted to Enzo by the U.S. Patent and
Trademark Office. This patent is the first of several applications dealing with
genetic testing, utilizing mutation analysis and SNP analysis, covering both
linear and non-linear amplification.
At Enzo Clinical Labs, revenues for the year declined by 2.9% to $28.7
million, primarily due to recent downward trends in the reimbursement rates of
third party payors and HMOs. In addition, the provision for uncollectible
accounts receivables at the Labs increased by $1.5 million, which reflected a
change in the mix of third-party payors. For the quarter, Enzo Clinical Labs had
revenue of $6.8 million, versus $8.0 million in the fiscal 2003 period. The Labs
posted a 5.2% gain in patient specimens for the year, and the expanded marketing
effort, including added sales staff, has resulted in numerous additional
physician clients in the Company's expanded geographic reach. Additionally, the
EnzoDirect(TM) System, Enzo Clinical Labs' proprietary system for physician
connectivity, continues to gain acceptance among doctors. "We believe that the
investments made in the information technology and marketing at Enzo Clinical
Labs during fiscal 2004 will produce improved results as we move forward through
fiscal 2005," said Mr. Weiner.
Legal expenses related to patent prosecutions and various lawsuits that
Enzo has engaged in to protect its intellectual property estate totaled $6.3
million, compared with $5.7 million in the prior fiscal year. "This is a
necessary expense to not only defend what is a valuable asset of the Company,
but also to realize what we believe is monies that properly belong to Enzo,"
said Mr. Weiner. Research and development expenses for the year remained
essentially unchanged, amounting to $8.1 million, compared with $8.3 million in
fiscal 2003.
At Enzo Therapeutics, Enzo recently reported that a Phase II randomized
double-blind study of Alequel(TM), the Company's investigational therapeutic
modality for management of Crohn's disease, successfully met its clinical
endpoints. The Company also reported that an expanded study directed at a more
diverse subject population and including dose escalation is in the regulatory
approval process. This past year also saw initiation of the Phase I/II trial of
Enzo's proprietary StealthVector(R) HGTV43(TM) gene medicine to treat persons
with HIV.
Other therapeutic activities included a Phase I clinical trial to study
the safety of, a new immunomodulatory agent EGS21, a beta-D-glucosylceramide
compound that could impact immune response by modulating its function. A paper
on glucosylceramide was presented last May, suggesting that this drug could be
an important candidate in the treatment of immune mediated diseases, such as
Crohn's, hepatitis B, hepatitis C and HIV. Enzo Therapeutics this past year also
entered into two agreements with the University of Connecticut Health Center to
license and cooperatively develop novel therapeutics for the stimulation and
enhancement of bone formation, focusing on possible products that could provide
therapy for bone disorders, including
- more -
Enzo Biochem, Inc. - Page 3
bone loss, fractures, abnormalities and various bone diseases. Additionally,
Enzo entered into a licensing agreement with Thomas Jefferson University for
certain patents relating to the development of Enzo's Hepatitis B therapeutic
program.
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 over 200 patents worldwide, are sold to
the life sciences market throughout the world. The Company's therapeutic
division is in various stages of clinical evaluation of its proprietary gene
medicine for HIV-1 infection and its proprietary immune regulation medicines for
hepatitis B and hepatitis C infection and for Crohn's disease. 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. For more information visit our
website www.enzo.com.
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.
AN INFORMATIONAL CALL CONDUCTED BY ENZO BIOCHEM, INC. MANAGEMENT WILL
TAKE PLACE ON THURSDAY, OCTOBER 14, 2004 AT 4:30 PM E.T. IT CAN BE ACCESSED BY
DIALING 1-877-780-2271. INTERNATIONAL CALLERS CAN DIAL 1-973-582-2737. YOU MAY
ALSO LISTEN OVER THE INTERNET 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 APPROXIMATELY
TWO HOURS AFTER THE END OF THE LIVE CALL, THROUGH MIDNIGHT OCTOBER 31, 2004. FOR
REPLAY, DIAL 1-877-519-4471 (1-973-341-3080 INTERNATIONALLY). YOU WILL BE
PROMPTED FOR PIN NUMBER 5274309.
-TABLE FOLLOWS -
Enzo Biochem, Inc. - Page 4
ENZO BIOCHEM, INC.
SELECTED STATEMENT OF OPERATIONS DATA
Fiscal Year Ended Three Months Ended
July 31 July 31
2004 2003 2004 2003
Unaudited
(IN THOUSANDS EXCEPT PER SHARE DATA)
Operating revenues $ 41,644 $ 52,767 $ 8,579 $ 10,659
(Loss) income before (provision) benefit for
income taxes ($ 11,080) $ 5,725 ($ 6,617) ($ 4,714)
(Provision) benefit for income taxes $ 4,848 ($ 1,881) $ 2,624 $ 2,191
-------- -------- -------- --------
Net income (loss) ($ 6,232) $ 3,844 ($ 3,993) ($ 2,523)
========= ======== ======== ========
Net (loss) income per common share - basic $ (0.20) $ 0.12 ($ 0.12) $ (0.08)
Net (loss) income per common share - diluted $ (0.20) $ 0.12 ($ 0.12) $ (0.08)
-------- -------- -------- --------
Common share - basic 31,700 31,399 32,040 31,453
Common share - diluted 31,700 32,175 32,040 32,726
SELECTED BALANCE SHEET DATA
July 31, 2004 July 31, 2003
(in thousands)
Cash and Marketable Securities $ 71,741 $ 78,422
Working Capital $ 92,260 $ 97,724
Stockholders' Equity $ 104,166 $ 109,381
Total Assets $ 110,334 $ 115,878