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Enzo Biochem Fiscal Q3 Revenues Decline 22 Percent

NEW YORK (GenomeWeb) – Enzo Biochem reported after the close of the market on Monday that total revenues for its fiscal third quarter dropped 22 percent year over year.

For the three months ended April 30, the New York City-based diagnostics and life sciences research products company said that total revenues fell to $19.7 million from $25.2 million a year ago. Clinical services revenues were down 34 percent to $11.7 million from $17.7 million in Q3 2018, which Enzo attributed to reduced insurance reimbursement payments, insurance company claims rejections, and changes to medical and procedural requirements for genetic testing by payors. Product revenues increased 7 percent to $7.9 million from $7.4 million, the firm said.

For fiscal Q3, Enzo posted net income of $22.3 million, or $.47 per share, compared to a net loss of $3.0 million, or $.06 per share, a year ago. The firm's non-GAAP loss on a per-share basis was $.14.

Enzo exited the quarter with $64.8 million in cash and cash equivalents.

In a statement, Enzo said that it is in "active discussions with several leading life sciences and medical device companies," and automated systems manufacturers to develop strategic relationships covering three platforms — molecular diagnostics, immunohistochemistry, and Enzo's ELISA platform. The conversations are focused on automation and manufacturing, distribution and marketing, and product sales. The company's goal is to announce at least one relationship by the end of calendar year 2019, Enzo said.

Additionally, the company said that it is introducing a new business model for labs in which Enzo will be the "central capability" for smaller labs. Such labs would capitalize on Enzo's scale in high-value and lower-cost operations, proprietary intellectual property and products, and long-term experience in innovation and commitment to medical solutions.

The formal rollout of the program is anticipated by the end of 2019, Enzo said.

To return to profitability, it said that it is working to aggressively control operational costs in the lab segment. Further, it is developing growth initiatives to capitalize on the firm's intellectual property and integrated approach to manufacturing. Lastly, it will pursue revenue opportunities through IP development and innovation. Such efforts will leverage opportunities in licensing its IP, as well as business development and litigation, it said.

Cost reduction improvements are expected to continue throughout fiscal 2020, and a return to operating profitability at the labs is anticipated to happen in early calendar 2020, Enzo said.

"Enzo is poised to leverage and capitalize on our deep-rooted, proprietary technology, product development and intellectual property portfolio in very real, short-term strategic initiatives designed to unlock the value we know exists across our business," Enzo Chairman and CEO Elazar Rabbani said in a statement. "