Enzo Biochem reports year-end loss of $15.7 million, outlines four-point growth plan

By Lisa Kerner

Charlotte, N.C., Oct. 16 - Enzo Biochem, Inc.'s fourth-quarter and fiscal 2006 results were in line with the company's expectations, according to senior vice president of finance Andrew Crescenzo.

"Fiscal 2006 resulted in a net loss of $15.7 million, or a loss per share of $0.49, as compared to a year-ago income of $3.3 million, or net income per share of $0.09," Crescenzo said during a company conference call.

Cash and cash equivalents were roughly $70 million at July 31.

Revenues for the full year totaled $39.8 million, compared with $43.4 million in 2005.

"Our legal expenses increased $1.9 million due to the increased activity in the litigation area to protect our intellectual property and higher legal fees to develop our patent portfolio," Crescenzo noted. However, these expenses were offset by improved procedures by Enzo Clinical Labs Inc. that resulted in a $4.6 million increase in cash collections for the year.

Research and development expenses for the year were down 7%, to $7.9 million, while clinical trial-related costs rose by $1.0 million.

The fourth-quarter net loss was $4.5 million, or $0.14 cents per share, compared with a net loss of $2.0 million, or $0.06 per share.

Revenues for the fourth quarter were $9.9 million, down slightly from $10.9 million for the fourth quarter of 2005.

For the quarter, research and development expenses increased by $0.5 million over the prior-year period and clinical trial-related costs declined by 45%.

"Our finances continue to be strong with solid working capital at year end of approximately $80 million with a working capital ratio of 14.5, as compared to 13.3 in 2005," Crescenzo said.

President and chief executive officer Barry Weiner said the investments the company has made in research and development, patent prosecution and personnel are beginning to demonstrate tangible results.

Weiner described two announcements made by the company on Friday - a favorable Federal Court ruling regarding six patents and Applera Corp. and Enzo's receipt of a license to amplification technology from LBS Technologies, Inc. - as milestones in the company's move to becoming a more integrated organization.

Growth plan

During the conference call, president of Enzo Life Sciences Inc. Carl Balezentis outlined Enzo's four-point strategy to grow revenue and maximize the company's intellectual property.

Enzo plans to:

• Increase the efficiency of its global sales and marketing activities;

• Develop new products to diversity into new market segments;

• Enter into collaborations and agreements with major life sciences companies; and

• Acquire product lines and companies to diversify into new markets and apply intellectual property to the development of product enhancements.

Enzo is a New York-based biotechnology company specializing in gene identification and genetic and immune regulation technologies.

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