Newest Apples of Wall Street's Eye
Enzo and other biotechs now hot with investors

By James Bernstein. STAFF WRITER

Enzo Biochem Inc. in Farmingdale has been in business about a quarter of a century, is debtless, has annual revenues of about $45 million, and earnings of $6.5 million-somewhat unusual in the often shaky biotech industry.

What's going on here? Enzo, according to market analysts and industry experts, is an example of how biotech stocks overall are replacing Internet stocks as the new new thing.

"There have been breakthroughs in genomic science and products are finally getting out," Hyman said. "These stocks have become momentum issues. You buy high and sell higher. You put aside the fundamentals and buy because everyone else is buying." Enzo, according to company president Barry Weiner, is entirely unaccustomed to such an environment. "We were fairly levelly traded for a long time," Weiner said. "Enzo has been a relatively quiet company." But a successful one. The company, established in 1976, went public in June, 1980. It has not been back to Wall Street for another public offering since.

Enzo has quietly made money and collected about 200 patents for its genetics-based research. In December, the company's stock transferred from the American Stock Exchange to the better-known New York Stock Exchange.

Despite all this, Enzo executives have had to sit and watch as the company's stock has gyrated more wildly than ever. The stock began climbing at the end of the summer, when, Weiner said, institutional investors took notice of business relationships Enzo had formed with major pharmaceutical companies.

The stock really began its climb in January. An article in Business Week the last week of the month reported that Enzo had some success in early clinical trials of its HIV gene therapy. The stock continued to run when Enzo executives outlined the clinical trials at an industry conference in San Francisco.

The stock was also helped by short sellers. "They took positions and were forced to buy back their positions as the stock went higher," said Don Selkin, chief investment strategist for Joseph Gunnar & Co. in Manhattan.

The ups and downs may be new for the company, but maybe not beneficial, said Selkin. "It shows a lot of uncertainty," he said. "It makes the public a little apprehensive." Nonetheless, Selkin said, he remains bullish on Enzo. "Many of these companies don't have profits. This one does. It's not a fly-by-night company."