Online Investors Feel Good About Enzo's New Treatment - Excerpts
By AARON ELSTEIN
THE WALL STREET JOURNAL INTERACTIVE EDITION

Web investors stood up and took notice after Enzo Biochem reported "significant progress" in developing a new treatment to stem the growth of HIV, the virus that causes AIDS.

Barry Weiner, president of Enzo Biochem, says the company isn't ready to report the results yet on the other six patients that participated in the study. "We are making very interesting headway with a very novel treatment for HIV," he said. "The report we did issue was quite meaningful."

The company's treatment works by injecting healthy cells into AIDS patients in the hopes they will replicate and ultimately restore the patient's immune system. In the prior experiments using this approach, the new cells vanished in a short time. But in Enzo's treatment, the new cells have persisted four to five months, said Jeffrey Laurence, director of AIDS research at Cornell University who has worked with Enzo Biochem in developing the treatment.

Mr. Laurence said such treatments have been stymied by two problems: After new cells have been injected, the virus sometimes has already mutated, eliminating effectiveness. And if the virus doesn't mutate, then it's been difficult to keep enough cells alive to treat it. "More research needs to be done to show that Enzo's is an effective treatment, but this is the longest we've seen the cells persist so far," he said.

Enzo's Mr. Weiner told shareholders that further tests are needed to determine the treatment's effectiveness. But he said that if the HIV treatment is successful, the approach could be used to treat hepatitis B, hepatitis C, heart disease, diabetes and cholesterol.

"When I first recommended it, I saw they were a profitable company with no debt trading at low price with the potential to do something big. There seemed no downside," says Axxel Knutson, research director at Platinum Equities, a New York firm. "Now there's some risk in the stock after it went up so fast, but I'm still holding."

But the big jump came Jan. 12, after the company said in a press release that it told shareholders at its annual meeting of "significant progress in several areas" in its drug-development unit. The company said that trials of its treatment for HIV indicated the medicine was "functioning," although it cautioned that "further evaluation" was needed "to fully document efficacy."

Anthony Buonaspina, a 41-year-old Web-page designer in Babylon, N.Y., and long-time Enzo Biochem shareholder, created "The Unofficial Enzo Home Page" site last week (www.grq.net/enzo/) to counter the "bashers and short-sellers" who he says have "plastered" the message boards with negative comments since the stock jumped in January. Short-sellers profit from stocks falling by selling borrowed shares and replacing them later with stock bought at a lower price.

"I really believe what Enzo is doing could have deep and meaningful effects for society at large," Mr. Buonaspina said. "And it's nice to find a biotech company that's actually making money."

Write to Aaron Elstein at aaron.elstein@wsj.com.