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Enzo Moves In On Hiv


BusinessWeek Investor -- Inside Wall Street

Enzo Moves in on HIV

The meteoric rise of Enzo Biochem (ENZ) from 14 in July to 74 3/4 on Jan. 19 is remarkable for a biotech stock in this Net-gaga market. Axxel Knutson, research director at tradingweapon.com, a unit of Platinum Equities, predicted in mid-November, when Enzo was at 25, that it would blast to 37. Knutson now thinks Enzo, which moved from Nasdaq to the Big Board on Jan. 14, could double. Enzo was first highlighted in this column on Aug. 31, 1998, when it was at 11. What's behind the surge?

Enzo President Barry Weiner says "early results from certain aspects" of clinical trials have produced "impressive positive results." Using patients with HIV, Enzo is conducting Phase I tests of a new treatment at the University of California at San Francisco. Employing its patented gene-transfer device, Enzo has been able to deliver huge doses of Enzo's gene medicine to patients' blood cells to build up the immunities of people with HIV. "And we are seeing continued activity of the cells," Weiner adds. This is a breakthrough, he says, in genetic medicine to fight the replication of infected cells. Enzo, which develops biomedical products largely used to detect viral infections, focuses on nucleic acid probes to detect sexually transmitted and other infectious diseases, such as AIDS and hepatitis.

Donald Selkin, chief strategist at investment firm Joseph Gunnar, says part of the sharp runup in the stock is due to the 2 million-share short position on Enzo. "The news on the HIV tests spurred the shorts" to buy stock to cover their positions, says Selkin, who expects Enzo to split its stock soon. Enzo posted operating revenues of $44.3 million in fiscal 1999, and earnings of $6.5 million, or 26 cents a share, up from 1998's $40.4 million and 13 cents, respectively.By Gene G. MarcialReturn to top

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