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Enzo Biochem Q3 Revenues Drop 5 Percent

NEW YORK (GenomeWeb) – Enzo BioChem reported after the close of the market on Monday that its third quarter revenues fell 5 percent year over year.

The firm cited a few issues that resulted in the decline in sales: a medical practice it served decided to internalize its genetic ordering, costing Enzo around $1.9 million; adverse weather; and the loss of an unnamed commercial insurance payor.

For the three months ended April 30, the firm reported total revenues of $25.6 million, down from $27.1 million in Q3 2017.

Clinical lab services revenue fell to $18.1 million from $19.6 million a year earlier. Product revenue inched up 1 percent to $7.4 million from $7.3 million in Q3 2017. Royalty and licensing revenue fell 60 percent to $78,000 in Q3 2018 from $193,000 in the year-ago period.

Enzo said it saw increased service revenue from the recently launched AmpiProbe line of PCR-based assays. The firm also noted that it validated three cancer biomarker detection tests as part of its expanded pathology platform.

Enzo also noted that it has added assays for detecting chromosomal abnormalities for cancer stagings to the firm's developmental pipeline. In addition, a biomarker for a Ureaplasma species, Mycoplasma hominis, and Mycoplasma genitalium is currently being validated that will expand its 13-analyte women's health panel on the AmpiProbe platform, the firm said.

During a conference call with analysts and investors, Enzo President and CFO Barry Weiner said that the firm is currently "in dialogue with independent laboratories ... and hospitals, which is important because the direction of our effort is clearly pointed to [health] issues that are impacting labs across the US."

Enzo's Q3 net loss was $3.0 million, or $0.06 per share, compared to a net loss of $71,000, or $0.00 per share, in Q3 2017.

While it declined to name the commercial insurance payor it lost, Enzo does not believe that will have a long-term impact on the company's overall growth.

"We consider this particular account as unique and don't see it falling into the same pattern of our other customer bases," Weiner said. "We're quite confident that it will not affect our ongoing activity in our other business, and in terms of an annual basis, the impact could be between $5-6 million."

Enzo's R&D expenses for the quarter rose 4 percent to $799,000 from $766,000 in the year-ago period. The firm did not disclose its SG&A for the quarter.

"As we move toward products that will be utilized in the clinical marketplace, these will need a specific type of manufacturing," Weiner said on the call. "As we grow, we will need enhanced capabilities to deal with that, and [the new] facilities are a prerequisite. We also see expansion in our services side as we bring in more sophisticated tests, we will need more laboratory capability, and that will be a component of it as well."

Enzo ended the quarter with $62.6 million in cash and cash equivalents.

Enzo's shares were down around 10 percent at $6.05 in early Tuesday trading on the New York Stock Exchange.