GDVMARCH's Alternate Perspective on Contents of  Enzo's 1999 Internet Edited Audio/Visual Presentation to Institutional Analysts & Fund Managers.

Listening To What Is Actually Said and Meant:

ISSUE and BACKGROUND:  KenInSacto offers an undated incomplete tape that starts in the middle of a sentence and is without introduction, early slides and other authentication in support of his and others contentions that in 1999 Barry Weiner promised shareholders **in 2002 Enzo would have10 HIV revenue producing clinics charging patients $10-K an HIV-HGTV-43 treatment.**  His and others innuendo and allegations in recent months are that Enzo shareholders were harmed by investing in Enzo shares in reliance on Enzo's alleged promise to have revenue in 2002 from 10 clinics treating paying patients at $30-K a treatment.  I emphatically reject what was said supports such baseless allegations. The opposite is true. I have listened to and watched the incomplete tape posted on Anthony's Enzo Unofficial Home Page and state below my reasonsfor challenging the veracity of the allegations.  I first verified with the Company the edited partial tape did contain some material of a canned and time-controlled internet program consisting of canned brief presentations submitted by various companies whose representatives (including Barry Weiner for Enzo) answered a limited number of questions posed by institutional analysts and fund managers comprising the target audience. None of the Enzo-related questions involved the aforesaid issues in contention.  Thus, this post responds only to the portion of the edited tape concerning the issue of whether Barry Weiner's 1999 presentation promised Enzo shareholders 10 revenue producing clinics in 2002.IMO, it does NOT.

WHAT WE KNOW: The audience of institutional analysts and fund managers are not shareholders and are trained to be familiar with S.E.C. law on safe-harbored forward-looking statements; and, if analyzing and otherwise dealing with pharmaceutical, biotechnology and other companies regulated by the FDA-CBER and CDER sections, the NIH and other Advisory Committees, and various relevant state agencies, ionstitutional folks must also be familiar with such governmental regulations, policies, practices, time-lines, pitfalls, sanctions, politics, etc.  They well know what a "forward-looking" statement is and that they may not rely thereon to invest for their employers and their clients.  Unlike shareholders, institutional personnel are required to verify reports of claimed historical events before utilizing same in decision-making and/or giving advice thereon to their employers' clients.  So whether institutional analysts or fund managers comprising the audience were previously acquainted with or knowledgeable about Enzo is immaterial.  The Company is not liable to persons who were not part of its intended audience to whom the presentation was directed. Even if non-institutional current or prospective shareholders listened and acted on the tape, liability does not lie for their reliance on forward-looking safe-harbored statements made by Enzo.

We also know that in early and mid-1999, the FDA-CBER-- which regulates gene therapies and biologics --was in a learning curve and employed a much more flexible approach than did FDA-CDER which regulates drugs, etc.  FDA-CBER had and has never approved a gene therapy for marketing.  NIH-RAC was not involved in the FDA-CBER gene therapy-biologics approval process.  Gelsinger and the other debacles had not yet happened.  Congress sought ways to speed up the FDA approval process for   promising gene therapies and treatments needed by seriously ill persons for whom treatments of equal safety and efficacy were not available.  Barry Weiner's presentation factored this flexibility and Congressional spirit into his l999 presentation to institutions.

Gelsinger, et al., has since happened.  Now NIH-RAC intervenes in gene therapy and biologics phased trial approvals, and a form of inertia has descended on FDA-CBER.  The FDA's  process was slowed down by some 6 to 12-months.  Charges made in hindsight are worth little other than to distort prior 1999 reality and perspective. To date, however, the FDA has still not approved a marketing license for a gene therapy.  No entity or person is ahead of Enzo.

THE TAPE: WHAT WAS SAID AND MEANT:  In the RELEVANT part of the edited EUHP early 1999 tape,  Barry Weiner is heard to make the following forward-looking and safe-harbored statements*-- on which by law no-one may rely or hold the company liable. [E.g.,  It  does not refer to a past historical event which can be verified to either have happened or failed to occur and for which the company may be held liable for a fraudulent statement and damages.]:

 "We are LOOKING FORWARD to completion [presumably of HIV Phase 1] at the end of 1999 - PERHAPS a little bit over [meaning in 2000] - but we THINK it will be in that time frame."

Then, again he said:  "We are LOOKING FOR the BEGINNING of Phase 2 at the end of 1999 or BEGINNING in 2000."

"LOOKING FORWARD TO DOING SOMETHING  or to  BEGINNING SOMETHING or THINKING SOMETHING WILL HAPPEN  is a forward-looking statement that may not be relied on because it can change or never happen.  E.g., the FDA, the IRB, or the sponsor may close down the Phase 1 trial site for any number of safety and/or other reasons; or Force Majeure could destroy it.

"LOOKING FOR THE BEGINNING of Phase 2" is clearly a forward-looking statement.

[How does a Phase begin?  One needs only to look back to the beginning of HIV Phase 1 (announced by Enzo on July 13, 1998, as approved to go forward by the FDA)  to know such words can mean commencing any one of a number of necessary actions preparatory to treatment of the first of the staggered entry Phase 2 trial participants.  For example and not by way of limitation, such acts include: write-up of and compliance with protocol amendments sought by the FDA; obtaining final approvals from IRBs of trial sites; submitting for approval by IRB's or the FDA-CBER modifications (e.g., to the vector or method of administration or dosage of treatment); setting up, supplying trial sites and training trial employees; selecting and contracting with FDA inspected manufacturers to produce for all three trial sites timely batches of, e.g., (1) the vector; (2) the gene constructs, (3) the serums, and (4) other needed devices and supplies; contracting with various regional depositories for safe-keeping of extra batches of strains, vectors, etc.,  to mitigate casualty to participants resulting from earthquake, fire, etc., at trial sites before  test phases are completed;  recruiting, testing, briefing and priming eligible prospective participants, etc.  Accomplishing many of these chores is dependent on the activities, priorities and schedules of others not under Enzo's control-e.g., start dates of manufacturers working of others contracts, FDA site inspectors, pre-scheduled IRB meeting dates, etc.]

"We HOPE it [i.e., HIV-HGTV-43] will be received - and we are confident that it will be - as a compassionate drug; and we are LOOKING FORWARD for that period between phases 2 and 3 to be able to make this an available product to the community."

The two forward-looking statements above were delivered to an institutional audience already familiar with FDA-CDER compassionate needs requirements. [Applications are filed with the FDA early in Phase 3 by non-trial physicians seeking promising unapproved experimental treatment for patients (see above); and when sponsors and PI's file applications for "expanded access" to the experimental treatment by communities with patients who, e.g., are resistant to available protease inhibitors, etc.]  There's no guarantee FDA approval would be forthcoming.  The institutional audience knew that anyway.

Next something new but still forward-looking:  The tape records Barry Weiner expressly educating the institutional audience that Enzo's HIV gene therapy treatment would ultimately be a hospital provided service, and not a drug purchasable in a drug store.  He specifically says: "It is a service" and, then informs: "It will be delivered through hospitals and laboratories".  Clearly, the words: "It will be delivered" makes it a forward-looking statement subject to change or non-event.

Then the tape indicates Barry Weiner clearly DISTINGUISHED the difference between CLINICAL HUMAN TRIAL SITES and the HOPED for SUBSEQUENT SERVICE DELIVERY CENTERS to be set up at hospitals and laboratories if and when Enzo is successful in obtaining FDA final approval to sell its HIV/AIDS HGTV-43 treatment to the public.  In so doing, Barry makes the following forward-looking statements:

"It [i.e., the HIV-HGTV-43] will be delivered through hospitals and laboratories."  Then, he states:  "WE CAN ENVISION THAT OUR CLINICAL TRIALS SITES WILL BE TRAINING OUR [SERVICE] CENTERS TO DELIVER THE PRODUCT IN AN EFFECTIVE WAY."  [So it will be the Service Delivery Centers who will treat paying patients with an approved and successful product and not the PI's at clinical trial sites.]

Barry's used the word "ENVISION"-- an obvious warning his statement was a forward-looking "safe harbored" one and not to be relied upon to make investment decisions.  ["Envision" also means: to conceive or think about something;  to fancy, imagine, visualize, conjure up, picture, or foresee the possibility of an event.  It it not talking about something fixed and certain.]

Barry then postulates the possibility that:  "With 10 [delivery] CENTERS in the U.S. we can POTENTIALLY treat the needed requirements throughout the U.S."

He did NOT say with ten clinical trial sites in the U.S. we can sell and deliver what's needed in the U.S.  He focused on 10 SERVICE DELIVERY CENTERS coming into play to treat, with the FDA approved product, members of the public. He doesn't say one way or the other whether some of the former clinical trial sites may be used as service delivery centers.  [Certainly, changes over time in the nation's HIV/AIDS demographics may require establishment of service delivery centers in geographical regions not chosen for trial sites.  Moreover, clinical trial sites for one phase do not necessarily serve as trial sites for later phases or as permanent patient delivery service centers.]

Barry continues: " This [i.e., the service delivery centers] will be a growing entity."  The words "will be" meaning in the "future" makes this a forward looking statement, which may not occur if, e.g., final product approval is not forthcoming from the FDA, etc.  "Growing" indicates something happening in the future and not a completed historical act.

The forward-looking nature of the statements are further emphasized when Barry divulges that future openings of service delivery centers for paying patients are dependent upon FDA approving the product-something not within Enzo's control.  He expressly states:  "UPON SUCCESS of this product, the number of [delivery] CENTERS will escalate dramatically."

[In the U.S., an FDA trial product is not a success unless and until approved for marketing by the FDA.  The institutional audience was not naïve. The tape indicates the audience was told everything Enzo was doing was a "first - never been before done" event by a company just starting its first phase 1 gene therapy trial.]

The tape indicates Barry returned to the subject of clinical trial sites by informing the institutional audience that Enzo is LOOKING TOWARD adding to its single, recently up and running, HIV Phase 1 clinical trial site. In early 1999, Barry talks about Enzo's hope of "adding three more clinical trial sites in 2000 and an additional 4 more in 2001."

Barry's prior forward-looking statement uses cumulative language (i.e., the words  "adding three more...in 2000" and "an additional 4 more in 2001").  Not expressly stated is whether all additional trial sites hoped to be added in 2000 and 2001 would be engaged in HIV Phase 1, or in any other phase.  Nor does the visual chart indicate whether the existing up and running site at UCSF will be retained as a site for Phase 2 and/or 3.

Importantly, the audio on the tape indicates Barry did NOT mention anything at all about adding additional

clinical trial sites in 2002.  A blind individual listening would not have heard any information at all about additional clinical trial sites setting up in 2002.  The audio consists of safe-harbored forward-looking statements about hoped to do things that may never materialize and may not be relied upon in making investment decisions even by individual shareholders.

Some institutional employees viewing the visual slide would have observed  a chart (i.e., used by Enzo to demonstrate how additional clinical trial sites are opened gradually over time).  On that slide two "X's" are typed in a column headed 2002.  Without an audio reference thereto, looking just at the chart the viewer may not assume that column 2002 is cumulative to rather than a replacement of earlier clinical trial sites, and/or that some clinical trial sites in other columns have not or will not be discontinued as trial phases end, or even that all clinical trial sites will or will not be engaged at all times in one single phase of the trial.

In any event, the chart also looks to the future and represents a forward-looking statement subject to change at any time without liability attaching to the Company.  Nevertheless, KenInSacto and others use the chart, including the not talked about column 2002, to bolster support for their innuendo and allegations that Enzo promised shareholders 10 revenue producing HIV/AIDS clinics by 2002.  An objective assessment shows that both in law and fact neither the forward-looking audio or visual statements forming part of the edited tape directed to institutional employees does any such thing.  It is silly and deceitful to say it does.

Thus, while Barry made clear Service Delivery Centers and not clinical trial sites would eventually be set up to deliver to the public for a fee an FDA approved treatment product and that perhaps 10 of such service centers may be sufficient for U.S. needs the tape does not say when those service delivery centers will be set up and start the revenue producing service.  The FDA does not make up-front guarantees to approve clinical trials and the marketing of experimental products.  Nor is Barry taped as saying there will be 10 clinical trial sites in operation by 2002 --  or that by virtue of a future change in law, revenues would be permitted to be derived therefrom.  Nor did the tape show any discussion by Barry that all clinical trial sites would convert into Service Delivery Centers by 2002 or thereafter.

A trained institutional analyst (or even a sophisticated shareholder who has performed thorough due diligence)  is aware the FDA's own statistics indicate clinical trial successes are very few and, therefore, would not assume a never before developed or tested product in very early development in the company's first human clinical trial would automatically prove successful and worthy of FDA approval to market in record time - especially when the FDA at the relevant time (and thereafter) never issued an approval to market a gene therapy.  "Upon Success of the Product," is the condition precedent to opening up income producing Service Delivery Centers.  In the U.S. the FDA determines which products are successful enough to earn its seal of approval to market and distribute to the public.  It is not Enzo.

The tape indicates that absolutely nothing was said to the institutional audience about either 10 clinical trial sites or 10 Service Delivery Centers in 2002 or thereafter charging $30-K or any other amount for HIV-HGTV-43 treatments.  [That figure and lower estimates were off-the-cuff guestimates given in response to audience questions at Enzo ASMs.  They were based loosely on what the then annual charge was in some areas for protease inhibitor treatments.]   An audience of trained institutional analysts would never get to the question of how much is to be charged for an under-developed, not fully tested, never-before done by anybody product being talked about by a company that has just commenced its first ever Phase 1 human clinical trial.

Looking back from 2001, informed shareholders know Enzo's Phase 1 was stopped, delayed and then restarted with an approved modified protocol and vector procedure that successfully shortened the time it took to complete re-infusion of the treated gene constructs -- first, to 2 or 3 weeks from 3 months, and then to 18 hours.  The delay was more than worth it to the patients and to Enzo's profit potential.   We also see that after that internet institutional conference occurred, so did the Gelsinger and other debacles in FDA- regulated clinical trials - the fall out from which included a 6 to 12 months slow-down at the FDA, and the entry of NIH-RAC into the gene therapy approval process, etc.

FWIW, it's clear to me the tape and the S.E.C. laws and regulations show that Enzo neither promised HIV revenue nor 10 revenue producing Service Delivery Centers or clinical trial sites in 2002.

I hope the foregoing clarifies and helps some to learn how to read and understand the implications of forward-looking statements and that all the deliberate misinterpretations of events and statements now cease.  The end result of the last two years of HIV activity is:  (1) Enzo still has the HIV pre-clinical running at Cornell; (2)  It has a pre-clinical in place working on an HIV oral tolerization approach; (3) It proved the HGTV-43 stealth vector and gene constructs worked as intended in the first part of HIV Phase 1; (4) Enzo's UCSF Phase 1 is about to expand into a second part at UCSF; (5) Enzo is approved to go forward with an expanded Phase 1 at Cornell; (6) Enzo has, what I believe will be classified as a Phase 2, planned to go forward at another unnamed hospital clinical trial site; (7) It is seeking the various clinical trial sites' IRB approvals; (8) It is contracting with FDA manufacturers to produce a sufficient batch of HGTV-43 and gene construct products for use this year at all 3 clinical trial sites, etc.  The level of success at each or any of those three sites will determine the speed at which further HIV/AIDS clinical trial sites will open; and, probably, whether FDA-CBER will entertain applications for "expanded use" and/or use on "compassionate grounds" when Phase 3 is approved to go forward.