UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-Q

Mark one

|x                                                       |  | QUARTERLY REPORT PURSUANT
        TO SECTION 13 OR 15(d) OF     
|------------------------------------------------------- |  | ----------------------------------------------------------------
|                                                        |  | THE SECURITIES EXCHANGE
        ACT OF 1934                     
|                                                        |  |                                                                 
|For the quarterly
        period ended January 31, 2008
|or                                                     
|o                                                       |  | TRANSITION REPORT PURSUANT
        TO SECTION 13 OR 15(d) OF THE
|                                                        |  | SECURITIES EXCHANGE
        ACT OF 1934                         

For the transition period from ___________________
to
___________________

Commission File Number 001-09974ENZO BIOCHEM, INC. (Exact name of registrant as specified in its charter)

|New York                                             |  | 13-2866202         
|---------------------------------------------------- |  | -------------------
|(State or Other Jurisdiction                         |  | (IRS. Employer     
|of Incorporation or Organization)                    |  | Identification No.)
|                                                    
|527 Madison Ave, New York, New York                  |  | 10022              
|(Address of Principal Executive office)              |  | (Zip Code)         
|                                                    
|212-583-0100                                         |  |                    
|(Registrants telephone number, including area code) |  |                    

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant has required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YesxNoo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

|Large accelerated filero | Accelerated filerx | Non-accelerated filero | Smaller reporting companyo
|------------------------ | ------------------ | ---------------------- | --------------------------

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

YesoNox

As of March 1, 2008 the Registrant had approximately 36,810,000 shares of common stock outstanding.







---



ENZO BIOCHEM, INC.FORM 10-QJanuary 31, 2008INDEXPART I - FINANCIAL INFORMATION

|Item 1.                     |  | Financial Statements                                                           |  |   
|--------------------------- |  | ------------------------------------------------------------------------------ |  | --
|                            |  |                                                                                |  |   
|                            |  | Consolidated Balance Sheets                                                    |  |   
|                            |  | January 31, 2008 (unaudited) and July 31, 2007
(audited)                       |  | 3 
|                            |  |                                                                                |  |   
|                            |  | Consolidated Statements of Operations                                          |  |   
|                            |  | For the three and six months ended January 31, 2008 and 2007 (unaudited)       |  | 4 
|                            |  |                                                                                |  |   
|                            |  | Consolidated Statement of Stockholders Equity and Comprehensive Income (Loss) |  |   
|                            |  | For the six months ended January 31, 2008 (unaudited)                          |  | 5 
|                            |  |                                                                                |  |   
|                            |  | Consolidated Statements of Cash Flows                                          |  |   
|                            |  | For the six months ended January 31, 2008 and 2007 (unaudited)                 |  | 6 
|                            |  |                                                                                |  |   
|                            |  | Notes to Consolidated Financial Statements                                     |  | 7 
|                            |  |                                                                                |  |   
|Item 2.                     |  | Managements Discussion and Analysis of                                        |  |   
|                            |  | Financial Condition and Results of Operations                                  |  | 17
|                            |  |                                                                                |  |   
|Item 3.                     |  | Quantitative and Qualitative Disclosures About Market Risk                     |  | 30
|                            |  |                                                                                |  |   
|Item 4.                     |  | Controls and Procedures                                                        |  | 30
|                            |  |                                                                                |  |   
|Part II  OTHER INFORMATION
|                            |  |                                                                                |  |   
|Item 1.                     |  | Legal Proceedings                                                              |  | 31
|                            |  |                                                                                |  |   
|Item 1A.                    |  | Risk Factors                                                                   |  | 31
|                            |  |                                                                                |  |   
|Item 4.                     |  | Submission of Matters to a Vote of Security Holders                            |  | 31
|                            |  |                                                                                |  |   
|Item 6.                     |  | Exhibits                                                                       |  | 31
|                            |  |                                                                                |  |   
|Signatures                  |  |                                                                                |  | 31

2

---



Part 1Financial InformationItem 1Financial Statements

ENZO BIOCHEM, INC.CONSOLIDATED BALANCE SHEETS(in thousands, except share data)

|ASSETS                                                                                                |  |   | January
        31, |   |  |   | July 31,  |  
|----------------------------------------------------------------------------------------------------- |  | - | ------------------- | - |  | - | --------- | -
|                                                                                                      |  |   | 2008                |   |  |   | 2007      |  
|                                                                                                      |  |   | (unaudited)         |   |  |   | (audited) |  
|Current assets:                                                                                       |  |   |                     |   |  |   |           |  
|Cash
        and cash equivalents                                                                     |  | $ | 98,553              |   |  | $ | 105,149   |  
|Accounts
        receivable, net of allowances                                                        |  |   | 13,493              |   |  |   | 14,353    |  
|Inventories                                                                                           |  |   | 6,268               |   |  |   | 7,022     |  
|Prepaid
        expenses                                                                              |  |   | 1,633               |   |  |   | 1,767     |  
|Total current assets                                                                                  |  |   | 119,947             |   |  |   | 128,291   |  
|                                                                                                     
|Property, plant, and
        equipment, net                                                           |  |   | 6,971               |   |  |   | 6,621     |  
|Goodwill                                                                                              |  |   | 13,908              |   |  |   | 13,676    |  
|Intangible assets, net                                                                                |  |   | 9,097               |   |  |   | 9,338     |  
|Other                                                                                                 |  |   | 1,323               |   |  |   | 1,076     |  
|Total assets                                                                                          |  | $ | 151,246             |   |  | $ | 159,002   |  
|                                                                                                     
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                  |  |   |                     |   |  |   |           |  
|                                                                                                     
|Current liabilities:                                                                                  |  |   |                     |   |  |   |           |  
|Accounts
        payable - trade                                                                      |  | $ | 3,786               |   |  | $ | 4,111     |  
|Accrued
        liabilities                                                                           |  |   | 5,153               |   |  |   | 8,446     |  
|Other
        current liabilities                                                                     |  |   | 1,275               |   |  |   | 1,287     |  
|Deferred
        taxes                                                                                |  |   | 339                 |   |  |   | 597       |  
|Total current liabilities                                                                             |  |   | 10,553              |   |  |   | 14,441    |  
|                                                                                                     
|Deferred revenue                                                                                      |  |   | 740                 |   |  |   | 938       |  
|Deferred taxes                                                                                        |  |   | 1,934               |   |  |   | 1,729     |  
|                                                                                                     
|Commitments and contingencies                                                                         |  |   |                     |   |  |   |           |  
|                                                                                                     
|Stockholders equity:                                                                                 |  |   |                     |   |  |   |           |  
|Preferred
        Stock, $.01 par value; authorized 25,000,000 shares; no shares issued
        or    |  |   |                     |   |  |   |           |  
|outstanding                                                                                           |  |   |                    |   |  |   |          |  
|Common
        Stock, $.01 par value; authorized 75,000,000 shares; shares issued:                    |  |   |                     |   |  |   |           |  
|37,587,564
        at January 31, 2008 and 37,280,723 at July 31, 2007                                |  |   | 376                 |   |  |   | 372       |  
|Additional
        paid-in capital                                                                    |  |   | 299,427             |   |  |   | 295,899   |  
|Less
        treasury stock at cost: 777,719 shares at January 31, 2008 and 596,456
        shares at |  |   |                     |   |  |   |           |  
|July
        31, 2007                                                                                 |  |   | (11,331             | ) |  |   | (8,915    | )
|Accumulated
        deficit                                                                           |  |   | (150,791            | ) |  |   | (145,504  | )
|Accumulated
        other comprehensive income                                                        |  |   | 338                 |   |  |   | 42        |  
|Total stockholders equity                                                                            |  |   | 138,019             |   |  |   | 141,894   |  
|Total liabilities and
        stockholders equity                                                    |  | $ | 151,246             |   |  | $ | 159,002   |  

3The accompanying notes are an integral part ofthese consolidated financial statements

---



ENZO BIOCHEM, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)(in thousands, except per share data)

|                                                        |  | Three Months
        Ended | Six Months
        Ended
|------------------------------------------------------- |  | -------------------------- | ------------------------
|                                                        |  | January
        31,        | January
        31,     
|                                                        |  |                            | 2008                    
|Revenues:                                               |  |                            |                         
|Product
        revenues                                |  | $                          | 6,028                   
|Royalty
        and license fee income                  |  |                            | 1,498                   
|Clinical
        laboratory services                    |  |                            | 10,700                  
|                                                        |  |                            | 18,226                  
|                                                       
|Costs and expenses and
        other (income):          |  |                            |                         
|Cost
        of product revenues                        |  |                            | 4,210                   
|Cost
        of clinical laboratory services            |  |                            | 4,969                   
|Research
        and development expense                |  |                            | 2,449                   
|Selling,
        general, and administrative expense    |  |                            | 9,603                   
|Provision
        for uncollectible accounts receivable |  |                            | 964                     
|Legal
        expense                                   |  |                            | 1,228                   
|Interest
        income                                 |  |                            | (1,086                  
|Other
        income                                    |  |                            | (100                    
|                                                        |  |                            | 22,237                  
|                                                       
|Loss before income taxes                                |  |                            | (4,011                  
|(Provision) benefit
        for income taxes            |  |                            | (42                     
|Net loss                                                |  | ($                         | 4,053                   
|                                                       
|Net loss per
        common share:                      |  |                            |                         
|Basic                                                   |  | ($                         | 0.11                    
|Diluted                                                 |  | ($                         | 0.11                    
|                                                       
|Weighted average common
        shares outstanding:     |  |                            |                         
|Basic                                                   |  |                            | 36,762                  
|Diluted                                                 |  |                            | 36,762                  

4The accompanying notes are an integral part ofthese consolidated financial statements

---



ENZO BIOCHEM, INCCONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITYAND COMPREHENSIVE INCOME (LOSS)Six months ended January 31, 2008(UNAUDITED)(In thousands, except share data)

|                                                           |  |            |  |          |  |        |     |            |   |         |          |  |    |             |   |  |    |               |       |               |       | Accumulated           |  |   |         |   |  |    |       |  
|---------------------------------------------------------- |  | ---------- |  | -------- |  | ------ | --- | ---------- | - | ------- | -------- |  | -- | ----------- | - |  | -- | ------------- | ----- | ------------- | ----- | --------------------- |  | - | ------- | - |  | -- | ----- | -
|                                                           |  | Common     |  | Treasury |  | Common |     | Additional |   |         | Treasury |  |    |             |   |  |    |               | Other |               | Total |                       |  |   |        
|                                                           |  | Stock      |  | Stock    |  | Stock  |     | Paid-in    |   |         | Stock    |  |    | Accumulated |   |  |    | Comprehensive |       | Stockholders |       | Comprehensive         | 
|                                                           |  | Shares     |  | Shares   |  | Amount |     | Capital    |   |         | Amount   |  |    | Deficit     |   |  |    | Income        |       | Equity        |       | income
        (loss) | 
|Balance at July 31,
        2007                           |  | 37,280,723 |  | 596,456  |  | $      | 372 |            | $ | 295,899 |          |  | ($ | 8,915       | ) |  | ($ | 145,504       | )     |               | $     | 42                    |  | $ | 141,894 |   |  |    |       |  
|                                                          
|Net loss for the six
        months ended January 31, 2008 |  |            |  |          |  |        |     |            |   |         |          |  |    |             |   |  |    | (5,287        | )     |               |       |                       |  |   | (5,287  | ) |  | ($ | 5,287 | )
|Purchase of treasury
        stock                         |  |            |  | 181,263  |  |        |     |            |   |         |          |  |    | (2,416      | ) |  |    |               |       |               |       |                       |  |   | (2,416  | ) |  |    |       |  
|Exercise of stock options                                  |  | 253,366    |  |          |  |        | 3   |            |   | 2,797   |          |  |    |             |   |  |    |               |       |               |       |                       |  |   | 2,800   |   |  |    |       |  
|Vesting of restricted
        stock                        |  | 53,475     |  |          |  |        | 1   |            |   |         |          |  |    |             |   |  |    |               |       |               |       |                       |  |   | 1       |   |  |    |       |  
|Stock based compensation
        charges                   |  |            |  |          |  |        |     |            |   | 743     |          |  |    |             |   |  |    |               |       |               |       |                       |  |   | 743     |   |  |    |       |  
|Common stock issuance
        costs adjustment             |  |            |  |          |  |        |     |            |   | (12     | )        |  |    |             |   |  |    |               |       |               |       |                       |  |   | (12     | ) |  |    |       |  
|Foreign currency translation
        adjustments           |  |            |  |          |  |        |     |            |   |         |          |  |    |             |   |  |    |               |       |               |       | 296                   |  |   | 296     |   |  |    | 296   |  
|Comprehensive loss                                         |  |            |  |          |  |        |     |            |   |         |          |  |    |             |   |  |    |               |       |               |       |                       |  |   |         |   |  | ($ | 4,991 | )
|Balance at January 31,
        2008                        |  | 37,587,564 |  | 777,719  |  | $      | 376 |            | $ | 299,427 |          |  | ($ | 11,331      | ) |  | ($ | 150,791       | )     |               | $     | 338                   |  | $ | 138,019 |   |  |    |       |  

5The accompanying notes are an integral part ofthese consolidated financial statements

---



ENZO BIOCHEM, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED) 
(in thousands)

|                                                                        |  | Six Months
        Ended
|----------------------------------------------------------------------- |  | ------------------------
|                                                                        |  | January
        31,     
|                                                                        |  | 2008                    
|Cash flows from operating
        activities:                           |  |                         
|Net loss                                                                |  | ($                      
|                                                                       
|Adjustments to reconcile
        net loss to net cash                   |  |                         
|used in operating activities:                                           |  |                         
|Depreciation
        and amortization of property, plant and equipment  |  |                         
|Amortization
        of intangible assets                               |  |                         
|Provision
        for uncollectible accounts receivable                 |  |                         
|Writeoff
        and/or reserve taken for obsolete inventory            |  |                         
|Deferred
        income tax benefit                                     |  |                         
|Share
        based compensation charges                                |  |                         
|Deferred
        revenue recognized                                     |  |                         
|Accrual
        for 401(k) employer match                               |  |                         
|Other                                                                   |  |                         
|                                                                       
|Changes
        in operating assets and liabilities:                    |  |                         
|Accounts
        receivable                                             |  |                         
|Inventories                                                             |  |                         
|Prepaid
        expenses                                                |  |                         
|Recoverable
        and prepaid income taxes                            |  |                         
|Accounts
        payable - trade                                        |  |                         
|Accrued
        liabilities                                             |  |                         
|Other
        current liabilities                                       |  |                         
|Deferred
        revenue                                                |  |                         
|Total
        Adjustments                                               |  |                         
|                                                                       
|Net
        cash used in operating activities                           |  |                         
|                                                                       
|Cash flows from investing
        activities:                           |  |                         
|Capital
        expenditures                                            |  |                         
|Increase
        in cash surrender value                                |  |                         
|Increase
        in other assets and security deposits                  |  |                         
|Acquisition
        costs paid                                          |  |                         
|Net
        cash used in investing activities                           |  |                         
|                                                                       
|Cash flows from financing
        activities:                           |  |                         
|Net
        proceeds (issuance costs) from the issuance of common stock |  |                         
|Proceeds
        from the exercise of stock options                     |  |                         
|Net
        cash provided by financing activities                       |  |                         
|                                                                       
|Effect of exchange rate
        changes on cash and cash equivalents    |  |                         
|                                                                       
|Increase (decrease)
        in cash and cash equivalents                |  |                         
|Cash and cash equivalents
        - beginning of period                 |  |                         
|Cash and cash equivalents
        - end of period                       |  | $                       

6The accompanying notes are an integral part ofthese consolidated financial statements

---



ENZO BIOCHEM, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAs of January 31, 2008and for the three and six month periods endedJanuary 31, 2008 and 2007(Unaudited)

Note 1 - Basis of Presentation

The accompanying consolidated financial statements include the accounts of Enzo Biochem, Inc. and its wholly-owned subsidiaries, Enzo Clinical Labs, Enzo Life Sciences, Enzo Therapeutics and Enzo Realty LLC,
collectively referred to as the Company or Companies. Effective May 31, 2007, Enzo Life Sciences, Inc. completed the acquisition of all of the outstanding capital stock of Axxora Life Sciences, Inc (Axxora). The
consolidated balance sheet as of January 31, 2008, statement of stockholders equity and comprehensive income (loss) for the six months ended January 31, 2008, the statements of cash flows for the six months ended January 31, 2008 and 2007, and
the consolidated statements of operations for the three and six months ended January 31, 2008 and 2007 are unaudited. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the
financial position and operating results for the interim periods have been made. Certain information and footnote disclosure, normally included in financial statements prepared in accordance with accounting principles generally accepted in the
United States, have been condensed or omitted. The consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended July 31, 2007 and notes thereto contained in the Companys Annual
Report on Form 10-K filed with the Securities and Exchange Commission. The consolidated balance sheet at July 31, 2007 has been derived from the audited financial statements at that date. The results of operations for the three and six months ended
January 31, 2008 and 2007 are not necessarily indicative of the results for the respective full years.

Recent Accounting Pronouncements

On August 1, 2007, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109
(FIN 48). FIN 48 prescribes a more-likely-than-not threshold for the recognition and derecognition of tax positions, provides guidance on the accounting for interest and penalties relating to tax positions and requires that the
cumulative effect of applying the provisions of FIN 48 be reported as an adjustment to the opening balance of retained earnings or other appropriate components of equity or net assets in the statement of financial position. The Company did not have
any significant unrecognized tax positions and there was no material effect on our financial condition or results of operations as a result of implementing FIN 48. See Note 10, Income Taxes, for additional information relating to the
Companys implementation of FIN 48.

In December 2007, the FASB issued Statement No. 141(R),Business Combinations(Statement 141 (R)), a replacement of FASB
Statement No. 141. Statement 141(R) is effective for fiscal years beginning on or after December 15, 2008 and applies to all business combinations. Statement 141(R) provides that, upon initially obtaining control, an acquirer shall recognize 100
percent of the fair values of acquired assets, including goodwill, and assumed liabilities, with only limited exceptions, even if the acquirer has not acquired 100 percent of its target. As a consequence, the current step acquisition model will be
eliminated. Additionally, Statement 141(R) changes current practice, in part, as follows: (1) contingent consideration arrangements will be fair valued at the acquisition date and included on that basis in the purchase price consideration; (2)
transaction costs will be expensed as incurred, rather than capitalized as part of the purchase price; (3) pre-acquisition contingencies, such as legal issues, will generally have to be accounted for in purchase accounting at fair value; and (4) in
order to accrue for a restructuring plan in purchase accounting, the requirements in FASB Statement No. 146,Accounting for Costs Associated with Exit or Disposal Activities, would have to be met at the acquisition date. While there is no expected impact to our consolidated financial statements on the accounting for acquisitions completed prior to July 31, 2009, the adoption of Statement 141(R) on
August 1, 2009 could materially change the accounting for business combinations consummated subsequent to that date.

In September 2006, the FASB issued Statement 157,Fair Value Measurement(Statement 157). Statement 157 defines fair value,
establishes a framework for measuring fair value in generally accepted accounting principles and establishes a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value. Statement 157 also expands financial statement
disclosures about fair value measurements. On February 6, 2008, the FASB issued FASB Staff Position (FSP) 157-2 which delays the effective date of Statement 157 for one year for all nonfinancial assets and nonfinancial liabilities, except those that
are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Statement 157 and FSP 157-2 are effective for financial statements issued for fiscal years beginning after November 15, 2007.

7

---



When required to adopt Statement 157, the Company expects to elect a partial deferral of Statement 157 as provided for under the provisions of FSP 157-2. The Company does not believe that the impact of partially
adopting Statement 157 effective August 1, 2008 will have a material effect on the Companys consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115. SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective of SFAS No. 159 is to provide opportunities to mitigate volatility in reported earnings
caused by measuring related assets and liabilities differently without having to apply hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that
choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company has not completed the assessment as to whether the impact of the adoption
of SFAS No. 159 will have a material impact on its financial condition or results of operations.

Reclassifications

Certain amounts in prior year periods have been reclassified to conform to current year presentation. In the fourth quarter of Fiscal 2007, the Company reclassified shipping and handling costs previously included in
selling expense to cost of sales. The shipping and handling costs reclassed were approximately $42,000 and $96,000, respectively, for the three and six months ended January 31, 2007.

Note 2 - Acquisition

On May 29, 2007, Enzo Life Sciences, Inc. (Enzo Life Sciences), a wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the Agreement), by and among Enzo Life
Sciences, Axxora Life Sciences, Inc. (Axxora) and the stockholders, option holders and warrant holders of Axxora who owned all of the issued and outstanding capital stock, options and warrants, respectively, of Axxora (collectively, the
Security holders). Pursuant to the Agreement, Enzo Life Sciences purchased all of the issued and outstanding capital stock of Axxora from the Security holders for an aggregate purchase price of $16,322,000, exclusive of acquisition costs
of $1,009,000 and assumed debt of $475,000. The Company acquired $881,000 in cash which is included in the current assets below. At closing $14,992,000 was paid to the Security holders, $1,280,000 was paid to an escrow agent for a one-year period
following the closing to satisfy any indemnification obligations of the Security holders under the Agreement during that period and $50,000 was paid to an escrow agent, for a one-year period following the closing to pay certain out-of-pocket
expenses of the representatives of the Security holders in connection with the transaction. Upon consummation of the acquisition on June 3, 2007 with an effective date of May 31, 2007, (date of acquisition), Axxora became a wholly-owned
subsidiary of Enzo Life Sciences. The acquisition was financed with the Companys cash and cash equivalents.

The following table presents the preliminary estimated fair values of the assets acquired and liabilities assumed on the date of acquisition (in thousands) as at January 31, 2008:

|Current assets                    |  | $ | 9,033 
|--------------------------------- |  | - | ------
|Property and equipment            |  |   | 360   
|Other assets                      |  |   | 82    
|Other intangible assets           |  |   | 8,220 
|Goodwill                          |  |   | 6,456 
|Total
        assets acquired     |  |   | 24,151
|Less:                             |  |   |       
|Current liabilities               |  |   | 4,394 
|Deferred tax liabilities          |  |   | 2,426 
|Total
        liabilities assumed |  |   | 6,820 
|                                 
|Net assets acquired               |  | $ | 17,331

8

---



The purchase accounting is based on a preliminary valuation of acquired intangible assets and will be adjusted based on the final valuation report to be completed in fiscal 2008. The Company has engaged an independent
third-party valuation firm to determine the fair value of the identifiable intangible assets. The excess of the total purchase price over the fair value of the net assets acquired, including the fair value of the identifiable intangible assets, has
been allocated to goodwill. The fair values of the identifiable intangible assets are based on various factors including: cost, discounted cash flow, and relief from royalty approaches in determining the preliminary purchase price allocation and are
subject to change. For financial reporting purposes, useful lives have been assigned as follows:

|Customer relationships     |  | 15 years  
|-------------------------- |  | ----------
|Trade names and trademarks |  | Indefinite
|Other intangibles          |  | 4-5 years 

The following unaudited pro forma financial information presents the combined results of operations of the Company and Axxora as if the acquisition had occurred at the beginning of the fiscal 2007 period presented. The
pro forma financial information reflects appropriate adjustments for amortization of intangible assets and a decrease for interest expense. The pro forma financial information presented is not necessarily indicative of either the actual consolidated
operating results had the acquisition been completed at the beginning of the period or future operating results of the consolidated entities.

|                                                       |  | Three
        months ended |        |   | Six
        months ended |   
|------------------------------------------------------ |  | -------------------------- | ------ | - | ------------------------ | --
|In
        thousands (except per share amounts)        |  | January
        31, 2007   |        |   | January
        31, 2007 |   
|Net revenues                                           |  | $                          | 14,761 |   |                          | $ 
|Net loss                                               |  |                            | (4,942 | ) |                          |   
|Net loss per
        common share  basic and diluted: |  | ($                         | 0.14   | ) |                          | ($

Note 3  Net loss per share

Basic net loss per common share is computed using the weighted average number of common shares outstanding during the three and six months ended January 31, 2008 and 2007. Diluted net loss per common shares is computed
using the weighted average number of shares outstanding during the three and six months ended January 31, 2008 and 2007, and excludes the effect of dilutive potential common shares (consisting of employee stock options and unvested restricted stock
awards) as their inclusion would be antidilutive. Accordingly, basic and diluted net loss per share is the same during these periods.

The following table summarizes the potential number of shares issued from exercise of in the money stock options, net of shares repurchased with the option exercise proceeds and potential shares from
restricted stock awards, which are excluded from the computation of diluted net loss per share.

|                                                          |  | Three months
        ended |  | Six months
        ended
|--------------------------------------------------------- |  | -------------------------- |  | ------------------------
|                                                          |  | January
        31,        |  | January
        31,     
|(In
        thousands)                                    |  | 2008                       |  | 2007                    
|Potential net shares, issued from
        exercise of in |  |                            |  |                         
|the money employee and director
        stock options    |  |                            |  |                         
|and restricted stock awards, excluded
        from        |  |                            |  |                         
|diluted net loss per share calculation                    |  | 237                        |  | 691                     

9

---



The following table summarizes the number of out of the money options excluded from the computation of diluted net loss per share because the effect of their potential exercise is anti-dilutive.

|                                                       |  | Three months
        ended |  | Six months
        ended
|------------------------------------------------------ |  | -------------------------- |  | ------------------------
|                                                       |  | January
        31,        |  | January
        31,     
|(In
        thousands)                                 |  | 2008                       |  | 2007                    
|Out of the money employee
        and director stock |  |                            |  |                         
|options                                                |  | 1,746                      |  | 905                     

Note 4  Share-based compensation

The Company adopted SFAS No. 123(R), Share-Based Payment (SFAS 123(R)) and related interpretations effective August 1, 2005. Compensation costs recognized in the three and six month periods
ended January 31, 2008 and 2007 include compensation costs for all share-based payments granted prior to, but not yet vested as of July 31, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No.
123, and compensation costs for all share-based payments granted subsequent to August 1, 2005, based on the grant fair value estimated in accordance with the provisions of SFAS 123(R).

The following table sets forth the amount of share based compensation expense upon vesting and per share data related to share-based payment arrangements included in the accompanying statements of operations:

|                                                      |  | Three months
        ended |      | Six months
        ended
|----------------------------------------------------- |  | -------------------------- | ---- | ------------------------
|In thousands, except
          per share data         |  | January
        31,        |      | January
        31,     
|                                                      |  | 2008                       |      | 2007                    
|Stock options                                         |  | $                          | 70   |                         
|Restricted stock awards                               |  |                            | 341  |                         
|Total                                                 |  | $                          | 411  |                         
|                                                     
|Impact on basic and
        diluted net loss per      |  |                            |      |                         
|common share                                          |  | $                          | 0.01 |                         
|                                                     
|As included in the
          statements of operations |  |                            |      |                         
|Cost of product revenues                              |  | $                          | 4    |                         
|Research and development                              |  |                            | 37   |                         
|Selling, general and
        administrative           |  |                            | 370  |                         
|                                                      |  | $                          | 411  |                         

No excess tax benefits were recognized during the three or six month periods ended January 31, 2008 and 2007.

Stock option plans

A summary of the activity relating to the Companys stock option plans for the six month period ended January 31, 2008 is as follows:

|                                      |  |           |   | Weighted               |  |                         |          
|------------------------------------- |  | --------- | - | ---------------------- |  | ----------------------- | ---------
|                                      |  |           |   | Average                |  | Aggregate              
|                                      |  | Options   |   | Exercise
        Price |  | Intrinsic
        Value
|Outstanding at August
        1, 2007 |  | 2,700,457 |   | $  13.32               |  | $                       | 4,262,000
|Exercised                             |  | (253,366  | ) | $  11.05               |  |                         |          
|Cancelled                             |  | (23,166   | ) | $  11.26               |  |                         |          
|Outstanding at end of
        period  |  | 2,423,925 |   | $  13.58               |  | $                       | 1,259,600
|Exercisable at end of
        period  |  | 2,394,921 |   | $  13.58               |  | $                       | 1,259,500
|Available for grant
        at        |  |           |   |                        |  |                         |          
|January
        31, 2008              |  | 461,900   |   |                        |  |                         |          

10

---



As of January 31, 2008, there was approximately $261,000 of total unrecognized compensation cost related to unvested stock option-based compensation, which will be recognized over a weighted average life of
approximately one half year.

During the six months ended January
    31, 2008 and 2007, the Company received cash proceeds of approximately $384,000
    and $117,000, respectively, from the exercise of 33,208 and 35,359 stock
    options, respectively. The aggregate intrinsic value of stock options exercised
    during the six months ended January 31, 2008 and 2007, including the non-cash
    transactions (Note 5) was approximately $0.7 million and $0.2 million, respectively.

Restricted Stock Awards

A summary of the activity pursuant to the Companys restricted stock awards for the six months ended January 31, 2008 is as follows:

|                                        |  |         |   |                     | Weighted
        Average
|--------------------------------------- |  | ------- | - | ------------------- | ------------------------
|                                        |  | Awards  |   | Award
        Price
|Unvested at beginning
        of period |  | 141,062 |   |                     |                         
|Granted                                 |  | 140,040 |   |                     |                         
|Vested                                  |  | (53,475 | ) |                     |                         
|Forfeited                               |  | (6,000  | ) |                     |                         
|Unvested at end of period               |  | 221,627 |   |                     |                         

The fair value of a restricted stock award is determined based on the closing stock price on the grant date. As of January 31, 2008, there was approximately $2,398,000 of total unrecognized compensation cost related to
unvested restricted stock-based compensation to be recognized over a weighted average period of one and a half years.

Note 5  Supplemental disclosure for statement of cash flows

Supplemental information with respect to the Companys consolidated statements of cash flows is as follows (In thousands):

|                            |  | Six months ended January 31,
|--------------------------- |  | ----------------------------
|                            |  | 2008                        
|Taxes paid (refunded)  net |  | $     131                   

During the six months ended January 31, 2008, certain officers and a director of the Company exercised 220,158 stock options in non-cash transactions. The individuals surrendered 181,263 shares of previously acquired
common stock to exercise the stock options. The Company recorded approximately $2.4 million, the market value of the surrendered shares, as treasury stock.

Note 6  Comprehensive loss

During the three months ended January 31, 2008
and 2007, total comprehensive loss was approximately $3.9 million and $4.9 million,
respectively. During the six months ended January 31, 2008 and 2007, total  comprehensive
loss was approximately $5.0 million and $6.1 million, respectively.

At January 31, 2008 and July 31,
    2007, the accumulated other comprehensive income relates to cumulative translation
    adjustments.

11

---



Note 7 - Inventories

Inventories, net of reserves of $442,000 and $379,000, respectively, consist of the following, as of:

|(In thousands)    |  |   | January 31, 2008 |  |   | July 31, 2007
|----------------- |  | - | ---------------- |  | - | -------------
|Raw materials     |  | $ | 20               |  | $ | 34           
|Work in process   |  |   | 1,130            |  |   | 1,221        
|Finished products |  |   | 5,118            |  |   | 5,767        
|                  |  | $ | 6,268            |  | $ | 7,022        

Note 8  Goodwill and intangible assets

The Companys goodwill, net of amortization, as of January 31, 2008 is as follows:

|In thousands                                                   |  |   |       
|-------------------------------------------------------------- |  | - | ------
|Balance  July 31, 2007                                        |  | $ | 13,676
|Additional purchase price adjustments arising from fiscal 2007 |  |   |       
|business combination in Life Science segment (Note 2)          |  |   | 232   
|Balance  January 31, 2008                                     |  | $ | 13,908

Intangible assets consist of licenses, trade names, customer relationships and product designs acquired pursuant to acquisitions, and patents. Intangible assets, all of which are included in the Life Science segment,
consist of the following (in thousands):

|                                        |  | January
          31, 2008 |        | July
          31, 2007
|--------------------------------------- |  | -------------------------- | ------ | -----------------------
|                                        |  |                            |        |                        
|                                        |  | Gross                      |        | Amortization           
|Finite-lived intangible
        assets: |  |                            |        |                        
|Patents                                 |  | $                          | 11,027 |                        
|Customer
        relationships          |  |                            | 3,890  |                        
|Non-compete
        and                 |  |                            |        |                        
|employment
        agreements           |  |                            | 360    |                        
|Website
        and acquired content    |  |                            | 270    |                        
|Indefinitely-lived intangible           |  |                            |        |                        
|assets:                                 |  |                            |        |                        
|Trademarks                              |  |                            | 3,700  |                        
|Total                                   |  | $                          | 19,247 |                        

Note 9  Accrued liabilities and other current liabilitiesAccrued liabilities consist of:

|In thousands                               |  | January
        31, 2008 |       | July
        31, 2007
|------------------------------------------ |  | ------------------------ | ----- | ---------------------
|Legal                                      |  | $                        | 771   |                      
|Payroll, benefits, and
        commissions |  |                          | 2,113 |                      
|Research and development                   |  |                          | 262   |                      
|Professional fees                          |  |                          | 805   |                      
|Outside reference lab
        testing      |  |                          | 165   |                      
|Other                                      |  |                          | 1,037 |                      
|                                           |  | $                        | 5,153 |                      

12

---



Other current liabilities consist of:

|In thousands     |  | January 31, 2008 |       | July 31, 2007
|---------------- |  | ---------------- | ----- | -------------
|Deferred revenue |  | $                | 830   |              
|Other            |  |                  | 445   |              
|                 |  | $                | 1,275 |              

Note 10 - Income taxes

At the end of each interim reporting period, the Company estimates its effective income tax rate expected to be applicable for the full year. This estimate is used to determine the income tax provision or benefit on a
year-to-date basis and may change in subsequent interim periods.

The Companys effective tax rate (provision) for the three months ended January 31, 2008 was (1.0%) compared to (1.6%) during the three months ended January 31, 2007. The tax provision for the three months ended
January 31, 2008 was based on state and local taxes and book to tax differences for acquired inventory. The Companys effective tax rate for the three months ended January 31, 2007 was based on state and local taxes. The Companys
effective tax rate for both periods differed from the expected net operating loss carryforward benefit at the U.S. federal statutory rate of 34% primarily due to the inability to recognize such benefit. The carryforward benefit cannot be recognized
because of uncertainties relating to future taxable income in terms of both its timing and its sufficiency, which would enable the Company to realize the federal carryforward benefit.

The Companys effective tax rate benefit (provision) for the six months ended January 31, 2008 was 1.4% compared to (2.0%) during the six months ended January 31, 2007. The tax benefit for the six months ended
January 31, 2008 was based on state and local taxes and book to tax differences for acquired inventory. The Companys effective tax rate for the six months ended January 31, 2007 was based on state and local taxes. The Companys effective
tax rate for both periods differed from the expected net operating loss carryforward benefit at the U.S. federal statutory rate of 34% primarily due to the inability to recognize such benefit. The carryforward benefit cannot be recognized because of
uncertainties relating to future taxable income in terms of both its timing and its sufficiency, which would enable the Company to realize the federal carryforward benefit.

The Company adopted the provisions of FIN 48 on August 1, 2007. The Company did not have any significant unrecognized tax positions and there was no material effect on its financial condition or results of operations
as a result of implementing FIN 48. The Company does not believe there will be any material changes in its unrecognized tax positions over the next twelve months.

The Company files a consolidated Federal income tax return. The Company files a combined New York State and City return with certain subsidiaries. Other subsidiaries file separate state and foreign tax
returns.

The tax years that remain subject to Federal examination are fiscal years ended July 31, 2005 through 2007. The tax years that remain subject to state and local examination are fiscal years ended July 31, 2004 through
2007. The tax years that remain subject to foreign examination are the years ended December 31, 2003 through 2006.

In connection with a business combination, the Company recorded as of May 31, 2007 approximately $300,000 for an uncertain tax position, including accrued interest of $39,000, with respect to a deemed dividend. During
the three and six months ended January 31, 2008, the Company accrued $8,000 and $16,000, respectively, in interest with respect to the uncertain tax position. The Companys policy is to recognize interest and penalties accrued on any uncertain
tax positions as a component of income tax expense.

13

---



Note 11  Other income

The Company as plaintiff and Sigma Aldrich (Sigma) entered into a Settlement Agreement and Release effective September 15, 2006 (the Settlement). Pursuant to the Settlement, the Companys
litigation with Sigma was dismissed and the Company recognized a $2.0 million gain on patent litigation settlement in the accompanying consolidated statement of operations for the six months ended January 31, 2007. During the three months ended
January 31, 2007, the Company received a payment of approximately $699,000 from Perkin Elmer Inc. (Perkin Elmer) for amounts due under a Distribution Agreement (the Distribution Agreement) which terminated December 31, 2004.
The Distribution Agreement is presently subject to a lawsuit for breach of contract, patent infringement, unfair competition under state law, unfair competition under federal law, tortuous interference with business relations, and fraud in the
inducement of contract. Perkin Elmer advised in a letter to the Company that the payment was owed under the Distribution Agreement and was delayed because of changes to their accounting system and personnel changes and that it was always their
intent to comply with the Distribution Agreement. The Company advised Perkin Elmer that the payment did not represent all amounts owed under the Distribution Agreement. Accordingly, the payment was included in Other income in the
accompanying consolidated statements of operations for the three and six months ended January 31, 2007.

Note 12  Royalty and licensing income

In fiscal 2005, the Company as plaintiff finalized and executed a settlement and license agreement with Digene Corporation to settle a patent litigation lawsuit (the Agreement). Subsequent to the
settlement, the Agreement provides for the Company to receive quarterly running royalties on the net sales of Digene products subject to the license until the expiration of the patent in April 2018. During the three months ended January 31, 2008 and
2007, the Company recorded approximately $1.0 million and $0.9 million, respectively, in royalties from the Agreement; and during the six months ended January 31, 2008 and 2007, recorded approximately $2.9 million and $2.2 million, respectively.
Digene was acquired by QIAGEN N.V. in July 2007.

During the three and six months ended January 31, 2008, the Company recorded approximately $0.5 million and $0.9 million, respectively, in royalties and license fee income under a licensing agreement with Abbott
Molecular, Inc. (Abbott) entered into in the third quarter of fiscal 2007.

Note 13  Segment reporting

The Company has three reportable segments: Life Sciences, Therapeutics, and Clinical Labs. The Companys Life Sciences segment develops, manufactures, and markets products to research and pharmaceutical customers.
The Companys Therapeutic segment conducts research and development activities for therapeutic drug candidates. The Clinical Labs segment provides diagnostic services to the health care community. The Company evaluates segment performance based
on segment income (loss) before taxes. Costs excluded from segment income (loss) before taxes and reported as other consist of corporate general and administrative costs which are not allocable to the three reportable segments.

Management of the Company assesses assets on a consolidated basis only and, therefore, assets by reportable segment have not been included in the reportable segments below. The accounting policies of the reportable
segments are the same as those described in the summary of significant accounting policies.

14

---



The following financial information (in thousands) represents the operating results of the reportable segments of the Company:

Three months ended January 31, 2008

|Revenues:                                               |  | Life
        Sciences |       |              | Therapeutics |   |                       | Clinical Labs |  |       | Other  |   |              | Consolidated |       
|------------------------------------------------------- |  | --------------------- | ----- | ------------ | ------------ | - | --------------------- | ------------- |  | ----- | ------ | - | ------------ | ------------ | ------
|                                                       
|Product revenues                                        |  | $                     | 6,028 |              |              |   |                      |               |  |       |       |   |              |              |      
|Royalty and license
        fee income                  |  |                       | 1,498 |              |              |   |                      |               |  |       |       |   |              |              |      
|Clinical laboratory
        services                    |  |                       |      |              |              |   |                      |               |  | $     | 10,700 |   |              |              |      
|                                                        |  |                       | 7,526 |              |              |   |                      |               |  |       | 10,700 |   |              |              |      
|                                                       
|Costs and expenses
          and other (income):        |  |                       |       |              |              |   |                       |               |  |       |        |   |              |              |       
|Cost of product revenues                                |  |                       | 4,210 |              |              |   |                      |               |  |       |       |   |              |              |      
|Cost of clinical laboratory
        services            |  |                       |      |              |              |   |                      |               |  |       | 4,969  |   |              |              |      
|Research and development                                |  |                       | 994   |              |              |   | 1,455                 |               |  |       |       |   |              |              |      
|Provision for uncollectible
        accounts receivable |  |                       |      |              |              |   |                      |               |  |       | 964    |   |              |              |      
|Selling, general and
        administrative and legal   |  |                       | 2,174 |              |              |   |                      |               |  |       | 4,243  |   |              | $            | 4,414 
|Interest income                                         |  |                       |      |              |              |   |                      |               |  |       | (76    | ) |              |              | (1,010
|Other income                                            |  |                       |      |              |              |   | (100                  | )             |  |       |       |   |              |              |      
|                                                       
|Income (loss) before
        income taxes               |  | $                     | 148   |              |              | $ | (1,355                | )             |  | $     | 600    |   |              | $            | (3,404
|                                                       
|Depreciation and amortization
        included above    |  | $                     | 208   |              |              | $ | 8                     |               |  | $     | 207    |   |              | $            | 38    
|                                                       
|Share-based compensation
          included in above:   |  |                       |       |              |              |   |                       |               |  |       |        |   |              |              |       
|Cost
        of product revenues                        |  | $                     | 4     |              |              |   |                      |               |  |       |       |   |              |              |      
|Research
        and development                        |  |                       | 25    |              |              | $ | 12                    |               |  |       |       |   |              |              |      
|Selling,
        general and administrative and legal   |  |                       | 29    |              |              |   |                      |               |  | $     | 64     |   |              | $            | 277   
|Total                                                   |  | $                     | 58    |              |              |   | 12                    |               |  | $     | 64     |   |              | $            | 277   
|                                                       
|Capital expenditures                                    |  | $                     | 545   |              |              | $ | 56                    |               |  | $     | 10     |   |              | $            | 6     
|                                                        |  |                       |       |              |              |   |                       |               |  |       |        |   |              |              |       
|Three months ended
          January 31, 2007           |  |                       |       |              |              |   |                       |               |  |       |        |   |              |              |       
|                                                        |  |                       |       |              |              |   |                       |               |  |       |        |   |              |              |       
|Revenues:                                               |  | Life
        Sciences |       | Therapeutics |              |   | Clinical
        Labs |               |  | Other |        |   | Consolidated |             
|                                                       
|Product revenues                                        |  | $                     | 725   |              |              |   |                      |               |  |       |       |   |              |              |      
|Royalty and license
        fee income                  |  |                       | 909   |              |              |   |                       |               |  |       |        |   |              |              |       
|Clinical laboratory
        services                    |  |                       |      |              |              |   |                      |               |  | $     | 8,960  |   |              |              |      
|                                                        |  |                       | 1,634 |              |              |   |                      |               |  |       | 8,960  |   |              |              |      
|                                                       
|Costs and expenses
          and other (income):        |  |                       |       |              |              |   |                       |               |  |       |        |   |              |              |       
|Cost of product revenues                                |  |                       | 412   |              |              |   |                      |               |  |       |       |   |              |              |      
|Cost of clinical laboratory
        services            |  |                       |      |              |              |   |                      |               |  |       | 4,067  |   |              |              |      
|Research and development                                |  |                       | 903   |              |              | $ | 1,556                 |               |  |       |       |   |              |              |      
|Provision for uncollectible
        accounts receivable |  |                       |      |              |              |   |                      |               |  |       | 1,180  |   |              |              |      
|Selling, general and
        administrative and legal   |  |                       | 468   |              |              |   |                      |               |  |       | 3,807  |   |              | $            | 4,845 
|Interest income                                         |  |                       |      |              |              |   |                      |               |  |       |       |   |              |              | (1,168
|Other income                                            |  |                       | (699  | )            |              |   |                      |               |  |       |       |   |              |              |      
|                                                       
|Income (loss) before
        income taxes               |  | $                     | 550   |              |              | $ | (1,556                | )             |  | $     | (94    | ) |              | $            | (3,677
|                                                       
|Depreciation and amortization
        included above    |  | $                     | 44    |              |              | $ | 4                     |               |  | $     | 201    |   |              | $            | 9     
|                                                       
|Share-based compensation
          included in above:   |  |                       |       |              |              |   |                       |               |  |       |        |   |              |              |       
|Cost
        of product revenues                        |  | $                     | 3     |              |              |   |                      |               |  |       |       |   |              |              |      
|Research
        and development                        |  |                       | 18    |              |              | $ | 33                    |               |  |       |       |   |              |              |      
|Selling,
        general and administrative and legal   |  |                       | 8     |              |              |   |                      |               |  | $     | 152    |   |              | $            | 286   
|Total                                                   |  | $                     | 29    |              |              | $ | 33                    |               |  | $     | 152    |   |              | $            | 286   
|                                                       
|Capital expenditures                                    |  | $                     | 18    |              |              | $ | $                    |               |  | $     | 135    |   |              | $            |      

15

---



Six months ended January 31, 2008

|Revenues:                                       |  | Life Sciences         |        | Therapeutics |  | Clinical Labs         |        | Other |  | Consolidated
|----------------------------------------------- |  | --------------------- | ------ | ------------ |  | --------------------- | ------ | ----- |  | ------------
|                                               
|Product revenues                                |  | $                     | 11,890 |              |  |                       |       |       |  |             
|Royalty and license fee income                  |  |                       | 3,816  |              |  |                       |        |       |  |             
|Clinical laboratory services                    |  |                       |       |              |  |                       |       |       |  | $           
|                                                |  |                       | 15,706 |              |  |                       |       |       |  |             
|                                               
|Costs and expenses and other (income):          |  |                       |        |              |  |                       |        |       |  |             
|Cost of product revenues                        |  |                       | 8,644  |              |  |                       |       |       |  |             
|Cost of clinical laboratory services            |  |                       |       |              |  |                       |       |       |  |             
|Research and development                        |  |                       | 1,797  |              |  | $                     | 2,354  |       |  |             
|Provision for uncollectible accounts receivable |  |                       |       |              |  |                       |       |       |  |             
|Selling, general and administrative and legal   |  |                       | 4,054  |              |  |                       |       |       |  |             
|Interest income                                 |  |                       |       |              |  |                       |       |       |  |             
|Other income                                    |  |                       | (26    | )            |  |                       | (100   | )     |  |             
|                                               
|Income (loss) before income taxes               |  | $                     | 1,237  |              |  | $                     | (2,254 | )     |  | $           
|                                               
|Depreciation and amortization included above    |  | $                     | 400    |              |  | $                     | 15     |       |  | $           
|                                               
|Share-based compensation included in above:     |  |                       |        |              |  |                       |        |       |  |             
|Cost of product revenues                        |  | $                     | 6      |              |  |                       |       |       |  |             
|Research and development                        |  |                       | 29     |              |  | $                     | 12     |       |  |             
|Selling, general and administrative and legal   |  |                       | 60     |              |  |                       |       |       |  | $           
|Total                                           |  | $                     | 95     |              |  |                       | 12     |       |  | $           
|                                               
|Capital expenditures                            |  | $                     | 659    |              |  | $                     | 64     |       |  | $           
|                                               
|Six months ended January 31, 2007               |  |                       |        |              |  |                       |        |       |  |             
|                                               
|Revenues:                                       |  | Life
        Sciences |        | Therapeutics |  | Clinical
        Labs |        | Other |  | Consolidated
|                                               
|Product revenues                                |  | $                     | 1,816  |              |  |                       |       |       |  |             
|Royalty and license fee income                  |  |                       | 2,207  |              |  |                       |        |       |  |             
|Clinical laboratory services                    |  |                       |       |              |  |                       |       |       |  | $           
|                                                |  |                       | 4,023  |              |  |                       |       |       |  |             
|                                               
|Costs and expenses and other (income):          |  |                       |        |              |  |                       |        |       |  |             
|Cost of product revenues                        |  |                       | 1,021  |              |  |                       |       |       |  |             
|Cost of clinical laboratory services            |  |                       |       |              |  |                       |       |       |  |             
|Research and development                        |  |                       | 1,732  |              |  | $                     | 2,588  |       |  |             
|Provision for uncollectible accounts receivable |  |                       |       |              |  |                       |       |       |  |             
|Selling, general and administrative and legal   |  |                       | 912    |              |  |                       |       |       |  |             
|Interest income                                 |  |                       |       |              |  |                       |       |       |  |             
|Other income                                    |  |                       | (2,699 | )            |  |                       |       |       |  |             
|                                               
|Income (loss) before income taxes               |  | $                     | 3,057  |              |  | $                     | (2,588 | )     |  | $           
|                                               
|Depreciation and amortization included above    |  | $                     | 92     |              |  | $                     | 7      |       |  | $           
|                                               
|Share-based
    compensation included in above: |  |                       |        |              |  |                       |        |       |  |             
|Cost of product revenues                        |  | $                     | 6      |              |  |                       |       |       |  |             
|Research and development                        |  |                       | 36     |              |  | $                     | 62     |       |  |             
|Selling, general and administrative and legal   |  |                       | 15     |              |  |                       |       |       |  | $           
|Total                                           |  | $                     | 57     |              |  | $                     | 62     |       |  | $           
|                                               
|Capital expenditures                            |  | $                     | 61     |              |  | $                     | 7      |       |  | $           

16

---



Item 2. Managements Discussion and Analysis of Financial Condition andResults of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other
information included elsewhere in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

Our disclosure and analysis in this report, including but not limited to the information discussed in this Item 2, contain forward-looking information about our Companys financial
results and estimates, business prospects and products in research that involve substantial risks and uncertainties. From time to time, we also may provide oral or written forward-looking statements in other materials we release to the public.
Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historic or current facts. They use words such as anticipate,
estimate, expect, project, intend, plan, believe, will, and other words and terms of similar meaning in connection with any discussion of future operations or financial performance. In particular, these
include statements relating to future actions, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, interest rates, foreign exchange rates, intellectual property
matters, the outcome of contingencies, such as legal proceedings, and financial results.

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to
risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated
or projected. As a result, investors are cautioned not to place undue reliance on any of our forward-looking statements. Investors should bear this in mind as they consider forward-looking statements.

We do not assume any obligation to update or revise any forward-looking statement that we make, even if new information becomes available or other events occur in the future. We are also
affected by other factors that may be identified from time to time in our filings with the Securities and Exchange Commission, some of which are set forth in Item 1A - Risk Factors in our Form 10-K filing for the 2007 fiscal year. You are advised to
consult any further disclosures we make on related subjects in our Forms 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission. Although we have attempted to provide a list of important factors which may affect our business, investors
are cautioned that other factors may prove to be important in the future and could affect our operating results. You should understand that it is not possible to predict or identify all such factors or to assess the impact of each factor or
combination of factors on our business. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

Overview

We are a life sciences and biotechnology company focused on harnessing genetic processes to develop research tools, diagnostics and therapeutics and on serving as a provider of diagnostic
services to the medical community. Since our founding in 1976, our strategic focus has been on the development of enabling technologies in the life sciences field. Our pioneering work in genomic analysis coupled with our extensive patent estate and
enabling platforms have strategically positioned us to play an important role in the rapidly growing life sciences and molecular medicine marketplaces.

We are comprised of three operating segments, of which the Therapeutics and Life Sciences segments have evolved out of our core competencies: the use of nucleic acids as informational
molecules and the use of compounds for immune modulation. Below are brief descriptions of each of the three operating segments (see Note 13 in the notes to consolidated financial statements):

Enzo Life Sciencesis a company that manufactures, develops and markets biomedical research products and tools to research and
pharmaceutical customers world-wide and has amassed a large patent and technology portfolio. The pioneering platforms developed by Enzo Life Sciences enable the development of a wide range of products in the research products marketplace. We are
internationally recognized and acknowledged as a leader in manufacturing, in-licensing, and commercialization of over 5,000 innovative high quality research reagents in key research areas. The division is an established source for a comprehensive
panel of products to scientific experts in the fields of gene expression, non-radioactive labeling and detection, adipokines & obesity, apoptosis, cell cycle, cytoskeletal research, DNA damage & repair, immunology & cancer research,
inflammation, neurobiology, nitric oxide & oxidative stress, and signal transduction.

Enzo Therapeuticsis a biopharmaceutical company that has developed multiple novel approaches in the areas of gastrointestinal,
infectious, ophthalmic and metabolic diseases, many of which are derived from the pioneering work of Enzo Life Sciences. Enzo Therapeutics has focused its efforts on developing treatment regimens for diseases and conditions for which current
treatment options are ineffective, costly, and/or cause unwanted side effects. This focus has generated a clinical and preclinical pipeline, as well as more than 40 patents and patent applications.

Enzo Clinical Labsis a regional clinical laboratory to the New York Metropolitan and New Jersey areas. The Company believes this allows
us to capitalize firsthand on our extensive advanced molecular and cytogenetic capabilities and the broader trends in predictive diagnostics. Enzo Clinical Labs offers a menu of routine and esoteric clinical laboratory tests or procedures used in
general patient care by physicians to establish or support a diagnosis, monitor treatment or medication, and search for an otherwise undiagnosed condition. We operate a full-service clinical laboratory in Farmingdale, New York, a network of 20
patient service centers, a stand alone stat or rapid response laboratory in New York City, and a full-service phlebotomy department.

The Companys sources of revenue have been from the direct sales of products consisting of labeling and detection reagents for the genomics and sequencing markets, as well as through
non-exclusive distribution agreements with other companies, and royalty and license fee income.

17

---



Another source of revenue has been from the clinical laboratory service market. Payments for clinical laboratory testing services are made by the Medicare program, healthcare insurers and
patients. Fees billed to patients, Medicare, and third-party payers are billed on the Clinical Labs standard gross fee schedule, subject to any limitations on fees negotiated with the third-party payers or with the ordering physicians on
behalf of their patients.

The Company incurs additional costs as a result of our participation in the Medicare programs, as billing and reimbursement for clinical laboratory testing is subject to considerable and
complex federal regulations. Compliance with applicable laws and regulations, as well as internal compliance policies and procedures, adds further complexity and costs to our operations. Government payers such as Medicare, as well as healthcare
insurers have taken steps and may continue to take steps to control the costs, utilizations and delivery of healthcare services, including clinical laboratory services. Principally as a result of reimbursement reductions and measures adopted by the
Centers for Medicare & Medicaid Services, or CMS, which establishes procedures and continuously evaluates and implements changes in the reimbursement process to control utilization. Despite the added cost and complexity of participating in the
Medicare program, we continue to participate because we believe that our other business may depend, in part, on continued participation in Medicare since we believe certain ordering physicians may want a single laboratory capable of performing all
of their clinical laboratory testing services, regardless of who pays for such services.

Information systems are used extensively in virtually all aspects of the clinical laboratory operations, including testing, billing, customer service, logistics, and management of medical
data. Our success depends, in part, on the continued and uninterrupted performance of our information technology systems. Through maintenance, staffing, and investments in our information technology system, we expect to limit the risk associated
with our heavy reliance on these systems.

The clinical laboratory is subject to seasonal fluctuations in operating results and cash flows. Typically, testing volume declines during the summer months, year end holiday periods and
other major holidays, reducing net revenues and operating cash flows. Testing volume is also subject to declines in winter months due to inclement weather, which varies in severity from year to year.

Recent Developments

Axxora Life Science, Inc. Acquisition

Effective May 31, 2007, Enzo Life Sciences entered into a Stock Purchase Agreement pursuant to which Enzo Life Sciences purchased all of the issued and outstanding capital stock of Axxora
Life Sciences, Inc. (Axxora) for an aggregate purchase price of $16.3 million in cash, exclusive of acquisition costs of approximately $1 million and assumed debt of $475,000. Upon consummation of the acquisition Axxora became a
wholly-owned subsidiary of Enzo Life Sciences. The consolidated statements for the three and six months ended January 31, 2008 include the results of operations of Axxora. Axxora is included in the Life Sciences segment.

Axxora is a developer, manufacturer and distributor of reagents for the research and biochemical industries and is based in the U.S. with wholly-owned subsidiaries in the U.S.,
Switzerland, Germany and the United Kingdom, as well as distributors located in other major markets throughout the world. Axxoras electronic marketplace enables customers to purchase research reagents from internationally recognized
manufacturers covering all areas of the life sciences research reagents field. As a result of this transaction, Enzo Life Sciences has expanded its product offerings both through internal manufacturing and distribution and increases its geographic
distribution. The acquisition was financed with the Companys cash and cash equivalents.

18

---



Results of OperationsThree months ended January 31, 2008 as compared to January 31, 2007

Comparative Financial Data for the Three Months Ended January 31,

(in thousands)

|Revenues:                                       |  | 2008 |        | 2007 |  | Increase
(Decrease) |        | % Change
|----------------------------------------------- |  | ---- | ------ | ---- |  | ------------------- | ------ | --------
|                                               
|Product sales                                   |  | $    | 6,028  |      |  | $                   | 725    |         
|Royalty and license fee income                  |  |      | 1,498  |      |  |                     | 909    |         
|Clinical laboratory services                    |  |      | 10,700 |      |  |                     | 8,960  |         
|Total revenues                                  |  |      | 18,226 |      |  |                     | 10,594 |         
|                                               
|Costs
    and expenses and other (income):      |  |      |        |      |  |                     |        |         
|Cost of products                                |  |      | 4,210  |      |  |                     | 412    |         
|Cost of laboratory services                     |  |      | 4,969  |      |  |                     | 4,067  |         
|Research and development                        |  |      | 2,449  |      |  |                     | 2,459  |         
|Selling, general and administrative             |  |      | 9,603  |      |  |                     | 7,168  |         
|Provision for uncollectible accounts receivable |  |      | 964    |      |  |                     | 1,180  |         
|Legal expenses                                  |  |      | 1,228  |      |  |                     | 1,952  |         
|Interest income                                 |  |      | (1,086 | )    |  |                     | (1,168 | )       
|Other income                                    |  |      | (100   | )    |  |                     | (699   | )       
|Total costs and expenses - net                  |  |      | 22,237 |      |  |                     | 15,371 |         
|                                               
|Loss before income taxes                        |  | ($   | 4,011  | )    |  | ($                  | 4,777  | )       

Consolidated Results:

The 2008 period and the 2007 period refer to the fiscal three months ended January 31, 2008 and 2007, respectively. Product revenues during three months ended January 31, 2008 were $6.0 million
compared to $0.7 million in the 2007 period, an increase of $5.3 million or 731%. The increase is due to the inclusion of Axxora product sales of $5.4 million for the quarter ended January 31, 2008 partially offset by a decline of $0.1 million in
product sales of Enzo Life Sciences New York (New York) products during the 2008 period versus the 2007 period.

Royalty and license fee income during three months ended January 31, 2008 was $1.5 million compared to $0.9 million in the 2007 period, an increase of $0.6 million or 65%. Royalties are earned from net sales of Digene
products subject to a license and from a License Agreement with Abbott which was entered into in the third quarter of fiscal 2007. During three months ended January 31, 2008, the Company recognized royalties of approximately $1.0 million from
Digene, an increase of approximately $0.1 million over the prior year ago period, and royalties and license fees of approximately $0.5 million under the Abbott License Agreement. There are no expenses relating to royalty and license fee
income.

Clinical laboratory revenues during three months ended January 31, 2008 were $10.7 million compared to $9.0 million in the 2007 period, an increase of $1.7 million or 19%. The increase in the 2008 period is primarily
attributable to the expansion of the insurance provider agreement with United Healthcare which occurred in January 2007, which increased service revenues during the entire 2008 period. The increase in service revenues was partially offset by an
increase in the contractual adjustment in the 2008 period, which reduced gross billings by 81.0% as compared to 77.6% in the 2007 period. The increase in the contractual adjustment is due to continued competitive pricing throughout the industry
which has negatively impacted reimbursement rates for tests.

The cost of product revenues during the three months ended January 31, 2008 was $4.2 million compared to $0.4 million in the 2007 period, an increase of $3.8 million. The increase is due to the inclusion of
Axxoras cost of product revenues of $3.9 million for the quarter ended January 31, 2008, which includes the impact of an inventory fair value adjustment of $0.4 million related to sales of inventory acquired from Axxora.

The cost of clinical laboratory services during the three months ended January 31, 2008 was $5.0 million as compared to $4.1 million in the 2007 period, an increase of $0.9 million or 22%.The increase is attributable
to the increased volume of patients serviced and tests performed. The Company incurred increased costs in the 2008 period primarily relating to reagent costs of $0.5 million and laboratory personnel costs of $0.3 million.

19

---



Research and development expenses were approximately $2.4 million during both the 2008 and 2007 periods. During the 2008 period, a decrease at the Therapeutic segment of $0.1 million in R&D costs was offset by the
inclusion of research and development incurred by Axxora of $0.2 million.

Selling, general and administrative expenses were approximately $9.6 million during the three months ended January 31, 2008 as compared to $7.2 million in the 2007 period, an increase of $2.4 million or 34%. Included
in the 2008 period is approximately $1.6 million of selling, general and administrative expenses related to Axxoras operations. The expense increases for the other Companies operations were in payroll and payroll related personnel costs
of $0.6 million and professional fees of $0.1 million.

The provision for uncollectible accounts receivable, relating to the clinical laboratory segment was $1.0 million for the three months ended January 31, 2008, compared to $1.2 million during the year ago period, a
decrease of $0.2 million or 18% due to improved billing and collection procedures.

Legal expense was $1.2 million during the three months ended January 31, 2008 compared to $1.9 million in the year ago period, a decrease of $0.7 million or 37%, due to a decrease in patent litigation activity in the
current the period compared to the 2007 period.

Interest income decreased by $0.1 million or 7% to $1.1 million during the three months ended January 31, 2008 compared to $1.2 million during the 2007 period. The Company earns interest by investing primarily in short
term (30 to 90 days) commercial paper with high credit ratings and money market funds. Despite higher invested balances during the 2008 period, interest income decreased because the rates offered on commercial paper and money market funds declined
in response to monetary policy actions taken by the U.S. Federal Reserve.

Other income was $0.1 million during the three months ended January 31, 2008 versus $0.7 million in the year ago period. During the 2007 period, the Company recognized a $0.7 million payment from a former distributor
under an expired distribution agreement which is presently subject to a lawsuit in which the Company is plaintiff.

The Companys effective tax rate (provision) for the three months ended January 31, 2008 was (1.0%), compared to (1.6%) during the three months ended January 31, 2007. The tax (provision) for the three months
ended January 31, 2008 was based on state and local taxes and book to tax differences for inventory acquired from Axxora and differed from the expected net operating loss carry forward benefit at the U.S. federal statutory rate of 34% primarily due
to the inability to recognize such benefit. The carry forward benefit cannot be recognized because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency.

The tax (provision) for the three months ended January 31, 2007 was based on state and local taxes, and differed from the expected net operating loss benefit at the U.S. federal statutory rate of 34% primarily due the
inability to recognize such benefit. The carry forward benefit cannot be recognized because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency, which would enable the Company to realize the federal
carry forward benefit.

20

---



Segment Results

The Life Sciences segments income before taxes was approximately $0.1 million for the three months ended January 31, 2008 as compared to $0.5 million in the 2007 period. Revenues from product shipments in the
2008 period increased by $5.3 million due to the inclusion of products sales of $5.4 million from Axxora, offset by a decline in New York product unit shipments. Royalty and license fee income in the 2008 period increased $0.6 million from the
existing Digene agreement and the Abbott License Agreement entered into in the third quarter of fiscal 2007.  The segments 2008 period gross margin of $3.3 million was negatively impacted by the $0.4 million fair value adjustment attributed to
the sale of inventory acquired from Axxora. Segment operating expenses, including selling, general and administrative and research and development, increased by approximately $1.8 million during the 2008 period primarily due to the inclusion of $1.7 million of Axxoras expenses for
the three months ended January 31, 2008. During the 2007 period, the Company recognized a $0.7 million payment from a former distributor under an expired distribution agreement which is presently subject to a lawsuit in which the Company is
plaintiff.

The Therapeutics segments loss before income taxes was approximately $1.4 million for the three months ended January 31, 2008 as compared to a loss of $1.6 million for the 2007 period. The decrease in the loss of
$0.2 million was primarily due to decreases in clinical trial activities and the recognition of $0.1 million from a government grant, included in other income in the consolidated financial statements.

The Clinical Laboratory segments income before taxes was $0.6 million for the three months ended January 31, 2008 as compared to loss of ($0.1) million in the 2007 period. The 2008 period was positively impacted
by an increase in laboratory service revenues of $1.7 million or 19%, due to the expansion of an insurance provider agreement effective January 2007, which increased gross profit by approximately $0.8 million. The increase in gross profit was offset
by an increase in selling, general and administrative costs of approximately $0.4 million during the 2008 period primarily due to increases in commissions and office support salaries and benefits, attributable to the increase in service revenues.
Segment operating results in the 2008 period were positively affected by a decrease in the provision for uncollectible accounts of $0.2 million as compared to the 2007 period.

The Other segments loss before taxes for the three months ended January 31, 2008 was approximately $3.4 million compared to $3.7 million in the 2007 period. The change reflects a decrease in legal expenses of
$0.7 million attributable to a decrease in patent litigation activities, offset by an increase in payroll and benefits of $0.2 million, an increase in professional fees of $0.1 million, and a decrease in interest income of $0.1 million due to lower
interest rates earned on short term investments.

21

---



Results of OperationsSix months ended January 31, 2008 as compared to January 31, 2007

Comparative Financial Data for the Six Months Ended January 31,(in thousands)

|                                                |  |      |        |      |  |                     |        |          |  |   |        |   |  |    
|----------------------------------------------- |  | ---- | ------ | ---- |  | ------------------- | ------ | -------- |  | - | ------ | - |  | ---
|Revenues:                                       |  | 2008 |        | 2007 |  | Increase
(Decrease) |        | % Change
|Product sales                                   |  | $    | 11,890 |      |  | $                   | 1,816  |          |  | $ | 10,074 |   |  | 555
|Royalty and license fee income                  |  |      | 3,816  |      |  |                     | 2,207  |          |  |   | 1,609  |   |  | 73 
|Clinical laboratory services                    |  |      | 21,965 |      |  |                     | 17,014 |          |  |   | 4,951  |   |  | 29 
|Total revenues                                  |  |      | 37,671 |      |  |                     | 21,037 |          |  |   | 16,634 |   |  | 79 
|                                               
|Costs and expenses and other (income):          |  |      |        |      |  |                     |        |          |  |   |        |   |  |    
|Cost of products                                |  |      | 8,644  |      |  |                     | 1,021  |          |  |   | 7,623  |   |  | 747
|Cost of laboratory services                     |  |      | 10,100 |      |  |                     | 7,563  |          |  |   | 2,537  |   |  | 34 
|Research and development                        |  |      | 4,151  |      |  |                     | 4,320  |          |  |   | (169   | ) |  | (4 
|Selling, general and administrative             |  |      | 17,007 |      |  |                     | 12,685 |          |  |   | 4,322  |   |  | 34 
|Provision for uncollectible accounts receivable |  |      | 2,124  |      |  |                     | 2,094  |          |  |   | 30     |   |  | 1  
|Legal expenses                                  |  |      | 3,677  |      |  |                     | 4,110  |          |  |   | (433   | ) |  | (11
|Interest income                                 |  |      | (2,546 | )    |  |                     | (2,079 | )        |  |   | (467   | ) |  | 22 
|Other income                                    |  |      | (126   | )    |  |                     | (2,699 | )        |  |   | 2,573  |   |  | (95
|Total costs and expenses - net                  |  |      | 43,031 |      |  |                     | 27,015 |          |  |   | 16,016 |   |  | 59 
|                                               
|Loss before income taxes                        |  | ($   | 5,360  | )    |  | ($                  | 5,978  | )        |  | $ | 618    |   |  | 10 

Consolidated Results:

The 2008 period and the 2007 period refer to the fiscal six months ended January 31, 2008 and 2007, respectively.

Product revenues during six months
    ended January 31, 2008 were $11.9 million compared to $1.8 million in the
    year ago period, an increase of $10.1 million or 555%. The increase is due
    to the inclusion of Axxora product sales of $10.4 million in the 2008 period
    partially offset by a decline of $0.3 million in product sales of Enzo Life
    Sciences New York (New York) products during 2008 period versus the 2007 period.

Royalty and license fee income during six months ended January 31, 2008 was $3.8 million compared to $2.2 million in the 2007 period, an increase of $1.6 million or 73%. Royalties are earned from net sales of Digene
products subject to a license and from a License Agreement with Abbott which was entered into in the third quarter of fiscal 2007. During six months ended January 31, 2008, the Company recognized royalties of approximately $2.9 million from Digene,
an increase of approximately $0.7 million over the prior year ago period, and royalties and license fees under the Abbott License Agreement of approximately $0.9 million. There are no expenses relating to royalty and license fee income.

Clinical
  laboratory revenues during six months ended January 31, 2008 were $22.0 million
    compared to $17.0 million in the 2007 period, an increase of $5.0 million
    or 29%. The Company experienced an increase in service revenues during the
    entire 2008 period primarily due to an expansion of an insurance provider
    agreement with United Healthcare which occurred in January 2007, which was
    partially offset by an increase in the contractual adjustment, which reduced
    gross billings by 80.8% as compared to 77.3% in the 2007 period. The increase
    in the contractual adjustment is due to continued competitive pricing throughout
    the industry which has negatively impacted reimbursement rates for tests.

The cost of product revenues during the six months ended January 31, 2008 was $8.6 million compared to $1.0 million in the 2007 period, an increase of $7.6 million. The increase is due to the inclusion of Axxoras
cost of product revenues of approximately $7.8 million for the 2008 period, which includes the impact of an inventory fair value adjustment of $1.0 million related to sales of inventory acquired from Axxora. Cost of product revenues relating to New
York products decreased $0.2 million due to the decline in its product revenues.

The cost of clinical laboratory services during the six months ended January 31, 2008 was $10.1 million as compared to $7.6 million in the prior period, an increase of $2.5 million or 34%. Due to the increased volume
of patients serviced and tests performed, the Company incurred increased costs primarily relating to reagent costs of $1.4 million, laboratory personnel costs of $0.7 million, and outside testing costs of $0.2 million.

22

---



Research and development expenses were approximately $4.1 million during the six months ended January 31, 2008, compared to $4.3 million in the 2007 period, a decrease of $0.2 million or 4%. The decrease was primarily
due to a decrease at the Therapeutic segment of $0.2 million in clinical trial activities, a decrease of $0.1 million in research supplies and related costs at Enzo Life Sciences  New York, partially offset by the inclusion of research and
development incurred by Axxora of $0.2 million.

Selling, general and administrative expenses were approximately $17.0 million during the six months ended January 31, 2008 as compared to $12.7 million in the 2007 period, an increase of $4.3 million or 34%. Included
in the 2008 period is approximately $3.1 million of selling, general and administrative expenses related to Axxoras operations. The increase in the other Companies operations of approximately $1.2 million was primarily due to payroll and
payroll related personnel costs approximating $0.8 million and professional fees of $0.2 million.

The provision for uncollectible accounts receivable, relating to the clinical laboratory segment was $2.1 million for the six months ended January 31, 2008 and comparable to the 2007 period despite the increase in
clinical laboratory revenue of 29% and the composition of patients being serviced, due to improved billing and collections procedures.

Legal expense was $3.7 million during the six months ended January 31, 2008 compared to $4.1 million in the 2007 period, a decrease of $0.4 million or 11%, due to a due to a decrease in patent litigation activity in
the current period.

Interest income increased by $0.5
    million or 22% to $2.5 million during the six months ended January 31, 2008
    compared to $2.0 million during the 2007 period. The increase was due to
    an increase in cash available for investment generated from the proceeds
    from the registered direct offerings of common stock in December 2006 and
    February 2007. The net cash proceeds from these fiscal 2007 offerings were
    $57.0 million. The Company earns interest by investing primarily in short
    term (30 to 90 days) commercial paper with high credit ratings and money
    market funds. During the 2008 period, the average interest rate earned was
5%.

Other income was $0.1 million during the six months ended January 31, 2008 versus $2.7 million in the year ago period. During the 2007 period, the Company recognized a $2.0 million gain on a patent litigation
settlement and a $0.7 million payment from a former distributor under an expired distribution agreement which is presently subject to a lawsuit in which the Company is plaintiff.

The Companys effective tax rate benefit for the six months ended January 31, 2008 was 1.4%, compared to a provision of (2.0%) during the 2007 period. The tax benefit for the six months ended January 31, 2008 was
based on state and local taxes and book to tax differences for inventory acquired from Axxora and differed from the expected net operating loss carry forward benefit at the U.S. federal statutory rate of 34% primarily due to the inability to
recognize such benefit. The carry forward benefit cannot be recognized because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency.

The tax provision for the six months ended January 31, 2007 was based on state and local taxes, and differed from the expected net operating loss benefit at the U.S. federal statutory rate of 34% primarily due the
inability to recognize such benefit. The carry forward benefit cannot be recognized because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency, which would enable the Company to realize the federal
carry forward benefit.

Segment Results

The Life Sciences segments income before
taxes was approximately $1.2 million for the six months ended January 31, 2008
as compared to $3.1 million in the 2007 period. The decrease is primarily due
to the  recognition in the 2007 period of the Companys $2.0 million patent
litigation settlement with Sigma Aldrich and a $0.7 million payment from a former
distributor under an expired distribution agreement which is presently subject
to a lawsuit in  which the Company is plaintiff. Revenues from product shipments
increased by $10.0 million due to the inclusion of products sales of $10.4 million
from Axxora in the 2008 period, offset by declines in New York product unit shipments.
Royalty and  license fee income increased $1.6 million from the existing Digene
agreement and the Abbott License Agreement entered into in the third quarter
of fiscal 2007. The segments gross margin of $7.1 million was negatively
impacted by $1.0 million  representing the fair value adjustment attributed to
the sale of inventory acquired from Axxora. Segment operating expenses, including
selling, general and administrative and research and development, increased by
approximately $3.2 million during the 2008 period primarily due to the inclusion
of Axxoras
expenses.

The Therapeutics segments loss before income taxes was approximately $2.3 million for the six months ended January 31, 2008 as compared to a loss of $2.6 million for the 2007 period. The decrease in the loss of
$0.3 million was primarily due to decreases in clinical trial activities, consulting, payroll and payroll related costs of $0.2 million, and the recognition of $0.1 million from a government grant, included in other income in the consolidated
financial statements.

23

---



The Clinical Laboratory segments income before taxes was $2.0 million for the six months ended January 31, 2008 as compared to $0.3 million in the 2007 period. The 2008 period was positively impacted by an
increase in laboratory service revenues of $5.0 million or 29%, due to the expansion of an insurance provider agreement effective January 2007, which increased gross profit by approximately $2.4 million. The increase in the 2008 periods gross
profit was offset by an increase in selling, general and administrative costs of approximately $0.8 million primarily due to increases in commissions and office support salaries, attributable to the increase in service revenues.  The segment also
earned interest in the 2008 period of $0.1 million on its cash generated by operations.

The Other segments loss before taxes for the six months ended January 31, 2008 was approximately $6.4 million as compared to $6.7 in the 2007 period. The Other segments 2008 period loss reflects an increase
in general and administrative expenses of $0.4 million offset by a decrease in legal expenses of $0.4 million due to a decrease in patent litigation activity in the current period compared to the 2007 period.  The increase in interest income of $0.3
million contributed to the reduced segment loss in the 2008 period.

Liquidity and Capital Resources

At January 31, 2008, our cash and cash equivalents were $98.6 million, a decrease of $6.6 million from cash and cash equivalents at July 31, 2007. The decrease in cash during the six months ended January 31, 2008 was
primarily due to the cash flow impacts discussed below. The Company had working capital of $109.4 million at January 31, 2008 compared to $113.9 million at July 31, 2007. The decrease in working capital was primarily the result of the decrease in
cash and cash equivalents and other changes in current assets of $8.3 million offset by a decrease in current liabilities of approximately $3.9 million due to the timing of disbursements for accrued expenses during the six month period.

Net cash used in operating activities for the six months ended January 31, 2008 was approximately $5.7 million as compared to $1.7 million for the six months ended January 31, 2007. The increase in net cash used by
operating activities in the 2008 period over the 2007 period of $4.0 million was primarily due to changes in operating assets and liabilities and in particular the decrease in accrued liabilities of $3.7 million in the 2008 period.

Net cash used in investing activities was approximately $1.3 million as compared to $0.4 million in the year ago period, primarily due to an increase in capital expenditures of $0.7 million.

Net cash provided by financing activities was approximately $0.4 million in the 2008 period from stock options exercise proceeds. In the 2007 period, net cash provided by financing activities were $43.2 million which
reflects $43.1 million in net proceeds from the registered direct offerings of shares of the Companys common stock in December 2006 and January 2007.

The Company believes that its current cash position is sufficient for its foreseeable liquidity and capital resource needs over the next 12 months, although there can be no assurance that future events will not alter
such view.

24

---



Contractual Obligations

There were no significant changes to the Contractual Obligations disclosed in the Annual Report on Form 10-K for the 2007 fiscal year.

Management is not aware of any material claims, disputes or settled matters concerning third party reimbursement that would have a material effect on our financial statements.

Critical Accounting Policies

General

The Companys discussion and analysis of its financial condition and results of operations are based upon Enzo Biochem, Inc.s consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses; these
estimates and judgments also affect related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to contractual adjustments, allowance for uncollectible accounts, inventory,
intangible assets and income taxes. The Company bases its estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Product revenues

Revenues from product sales are recognized when the products are shipped and title transfers, the sales price is fixed or determinable and collectibility is reasonably assured. The revenue from the non-exclusive
distribution agreements are recognized when shipments are made to their respective customers and reported to the Company. The Company has certain non-exclusive distribution agreements, which provide for consideration to be paid to the distributors
for the manufacture of certain products. The Company records such consideration provided to distributors under these non-exclusive distribution agreements as a reduction to product revenues. The Company did not recognize any revenue from these
distributors during the 2008 and 2007 periods. During the three and six months ended January 31, 2008, one customer in the Life Science segment represented 14% and 15%, respectively of total product revenues.

Royalties

Royalty revenues are recorded in the period earned. Royalties received in advance of being earned are recorded as deferred revenues.

License fees and multiple element arrangements

When evaluating multiple element arrangements, the Company considers whether the components of the arrangement represent separate units of accounting as defined in Emerging Issues Task Force (EITF) Issue
No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21). Application of this standard requires subjective determinations and requires management to make judgments about the fair value of the individual elements and
whether such elements are separable from the other aspects of the contractual relationship.

Revenues - Clinical laboratory services

Revenues from the clinical laboratory are recognized upon completion of the testing process for a specific patient and reported to the ordering physician. These revenues and the associated accounts receivable are based
on gross amounts billed or billable for services rendered, net of a contractual adjustment, which is the difference between amounts billed to payers and the expected approved reimbursable settlements from such payers.

The following are tables of the Clinical Labs segments net revenues and percentages by revenue category for the three and six months ended January 31, 2008 and 2007:

|Net revenues      |  | Three months ended |        | Three months ended
|----------------- |  | ------------------ | ------ | ------------------
|                  |  | January 31, 2008   |        | January 31, 2007  
|Revenue category  |  | (In thousands)     |        | (in %)            
|Medicare          |  | $                  | 1,809  |                   
|Third-party payer |  |                    | 6,586  |                   
|Patient self-pay  |  |                    | 1,307  |                   
|HMOs             |  |                    | 998    |                   
|Total             |  | $                  | 10,700 |                   

25

---



|Net revenues      |  | Six months ended |        | Six months ended
|----------------- |  | ---------------- | ------ | ----------------
|                  |  | January 31, 2008 |        | January 31, 2007
|Revenue category  |  | (In thousands)   |        | (in
    %)      
|Medicare          |  | $                | 3,954  |                 
|Third-party payer |  |                  | 13,093 |                 
|Patient self-pay  |  |                  | 2,823  |                 
|HMOs             |  |                  | 2,095  |                 
|Total             |  | $                | 21,965 |                 

The Company provides services to certain patients covered by various third-party payers, including the Federal Medicare program. Revenue, net of contractual adjustments, from direct billings under the Federal Medicare
program during the three and six months ended January 31, 2008 and 2007 were approximately 17% and 18%, and 22% and 23%, respectively, of the clinical lab segments revenue. Laws and regulations governing Medicare are complex and subject to
interpretation for which action for noncompliance includes fines, penalties and exclusion from the Medicare programs.

The Company believes that it is
    in compliance with all applicable laws and regulations and is not aware of
    any pending or threatened investigations involving allegations of potential
    wrongdoing.

Other than the Medicare program, one provider
whose programs are included in the Third-party payer and Health
Maintenance Organizations (HMOs) categories represented
23% and  24% of the Clinical Labs services net revenues for the three and six
months ended January 31, 2008. Other than the Medicare program, no other provider
included in the Third-party payer and HMOs categories exceeded
10% of the  Clinical Labs services net revenues for the three and six months
ended January 31, 2007.

Contractual Adjustment

The Companys estimate of contractual adjustment is based on significant assumptions and judgments, such as its interpretation of payer reimbursement policies, and bears the risk of change. The estimation process
is based on the experience of amounts approved as reimbursable and ultimately settled by payers, versus the corresponding gross amount billed to the respective payers. The contractual adjustment is an estimate that reduces gross revenue, based on
gross billing rates, to amounts expected to be approved and reimbursed. Gross billings are based on a standard fee schedule we set for all third-party payers, including Medicare, HMOs and managed care. The Company adjusts the contractual
adjustment estimate quarterly, based on its evaluation of current and historical settlement experience with payers, industry reimbursement trends and other relevant factors. The other relevant factors that affect our contractual adjustment include
the monthly and quarterly review of: 1) current gross billings and receivables and reimbursement by payer, 2) current changes in third party arrangements. 3) the growth of in-network provider arrangements and managed care plans specific to our
Company.

Our clinical laboratory business is primarily dependent upon reimbursement from third-party payers, such as Medicare (which principally serves patients 65 and older) and insurers. We are subject to variances in
reimbursement rates among different third-party payers, as well as constant changes of reimbursement rates. Changes that decrease reimbursement rates or coverage would negatively impact our revenues. The number of individuals covered under managed
care contracts or other similar arrangements has grown over the past several years and may continue to grow in the future. In addition, Medicare and other government healthcare programs continue to shift to managed care. These trends will continue
to reduce our revenues per test.

During the three and six months ended January 31, 2008 and 2007, the contractual adjustment percentages, determined using current and historical reimbursement statistics, were 81.0% and 80.8%, and 77.6% and 77.3%,
respectively, of gross billings. The Company believes the negative impact on revenues from the decline in reimbursement rates or the shift to managed care, other primary third-party payers, or similar arrangements may be offset by the positive
impact of an increase in the number of tests we perform. However, there can be no assurance that we can increase the number of tests we perform or that if we do increase the number of tests we perform, that we can maintain that higher number of
tests performed, or that an increase in the number of tests we perform would result in increased revenue.

The Company estimates (by using a sensitivity analysis) that each 1% point change in the contractual adjustment percentage could have resulted in a change in Clinical Labs services revenues of approximately $1,142,000
for the six months ended January 31, 2008, and could have resulted in a change in the net accounts receivable of approximately $327,000 as of January 31, 2008.

26

---



Our clinical laboratory financial billing system records gross billings using a standard fee schedule for all payers and does not record contractual adjustment by payer at the time of billing. Therefore, we are unable
to quantify the effect of contractual adjustment recorded during the current period that relate to revenue recorded in a previous period. However, we can reasonably estimate our contractual adjustment to revenue on a timely basis based on our
quarterly review process, which includes:

- an analysis of industry reimbursement trends;
- an evaluation of third-party reimbursement rates changes and changes in reimbursement arrangements with third-party payers;
- a rolling monthly analysis of current and historical claim settlement and reimbursement experience with payers;
- an analysis of current gross billings and receivables by payer.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period of the related revenue.

The following is a table of the Companys net accounts receivable by segment. The clinical laboratory segments net receivables are detailed by billing category and as a percent to its total net receivables.
At January 31, 2008 and July 31, 2007, approximately 70% and 69%, respectively, of the Companys net accounts receivable relates to its clinical laboratory business, which operates in the New York Metropolitan and New Jersey Metropolitan
areas.

The Life Sciences segments accounts receivable, of which $1.9 million or 48% and $1.8 million or 39% represents foreign receivables as of January 31, 2008 and July 31, 2007 respectively, includes royalty
receivables of $1.4 and $1.8 million, as of January 31, 2008 and July 31, 2007, respectively, of which approximately $1.0 and $1.5 million, respectively is from Digene Corporation (Note 12).

Net accounts receivable

|                          |  | As of
  January 31, 2008 |                | As of
  July 31, 2007
|------------------------- |  | ------------------------ | -------------- | ---------------------
|Billing category          |  |                          | (In thousands) |                      
|Clinical laboratory       |  |                          |                |                      
|Medicare                  |  | $                        | 1,546          |                      
|Third-party payers        |  |                          | 4,961          |                      
|Patient self-pay          |  |                          | 2,471          |                      
|HMOs                     |  |                          | 466            |                      
|Total Clinical laboratory |  | $                        | 9,444          |                      
|Total Life Sciences       |  |                          | 4,049          |                      
|Total accounts receivable |  | $                        | 13,493         |                      

Changes in the Companys allowance for doubtful accounts are as follows:

|In
    thousands                                |  | January 31, 2008 |        | July 31, 2007
|----------------------------------------------- |  | ---------------- | ------ | -------------
|Beginning balance                               |  | $                | 1,404  |              
|Provision for uncollectible accounts receivable |  |                  | 2,124  |              
|Write-offs                                      |  |                  | (2,149 | )            
|Ending balance                                  |  | $                | 1,379  |              

For the Clinical Labs segment, the allowance for doubtful accounts represents amounts that the Company does not expect to collect after the Company has exhausted its collection procedures. The Company estimates its
allowance for doubtful accounts in the period the related services are billed and adjusts the estimate in future accounting periods as necessary. It bases the estimate for the allowance on the evaluation of historical collection experience, the
aging profile of accounts receivable, the historical doubtful account write-off percentages, payer mix, and other relevant factors.

27

---



The allowance for doubtful accounts includes the balances, after receipt of the approved settlements from third-party payers for the insufficient diagnosis information received from the ordering physician, which result
in denials of payment, and the uncollectible portion of receivables from self payers, including deductibles and copayments, which are subject to credit risk and patients ability to pay. During the three and six months ended January 31, 2008
and 2007, the Company determined an allowance for doubtful accounts less than 210 days and wrote off 100% of accounts receivable over 210 days, as it assumed those accounts are uncollectible, except for certain fully reserved balances, principally
related to Medicare, until the payers filing date deadline occurs.

The Companys collection experience on Medicare receivables beyond 210 days has been insignificant. The Company adjusts the historical collection analysis for recoveries, if any, on an ongoing basis.

The Companys ability to collect outstanding receivables from third-party payers is critical to its operating performance and cash flows. The primary collection risk lies with uninsured patients or patients for
whom primary insurance has paid but a patient portion remains outstanding. The Company also assesses the current state of its billing functions in order to identify any known collection or reimbursement issues in order to assess the impact, if any,
on the allowance estimates, which involves judgment. The Company believes that the collectibility of its receivables is directly linked to the quality of its billing processes, most notably, those related to obtaining the correct information in
order to bill effectively for the services provided. Should circumstances change (e.g. shift in payer mix, decline in economic conditions or deterioration in aging of receivables), our estimates of net realizable value of receivables could be
reduced by a material amount.

Billing for laboratory services is complicated because of many factors, especially: the differences between our standard gross fee schedule for all payers and the reimbursement rates of the various payers we deal with,
disparity of coverage and information requirements among the various payers, and disputes with payers as to which party is responsible for reimbursement.

The following tables indicate the Clinical Labs Aged Gross Receivables by Payer Group (in thousands), which is prior to adjustment to gross receivables for 1) contractual adjustment, 2) fully reserved balances not yet
written off and 3) other revenue adjustments.

|                        |  |        |        |   |     |   |  |          |       |   |     |   |  |        | Third  |   |     |   |  |          |       |   |     |   |  |        |       |   |     |  
|----------------------- |  | ------ | ------ | - | --- | - |  | -------- | ----- | - | --- | - |  | ------ | ------ | - | --- | - |  | -------- | ----- | - | --- | - |  | ------ | ----- | - | --- | -
|                        |  |        |        |   |     |   |  |          |       |   |     |   |  |        | Party  |   |     |   |  |          |       |   |     |   |  |        |       |   |     |  
|(in thousands)          |  | Total  |        |   |     |   |  | Medicare |       |   |     |   |  | Payers |        |   |     |   |  | Self-pay |       |   |     |   |  | HMOs  |       |   |    
|As of January 31, 2008  |  | Amount |        | % |     |   |  | Amount   |       | % |     |   |  | Amount |        | % |     |   |  | Amount   |       | % |     |   |  | Amount |       | % |    
|1-30 days               |  | $      | 16,789 |   | 55  |   |  | $        | 3,310 |   | 42  |   |  | $      | 7,810  |   | 70  |   |  | $        | 2,067 |   | 27  |   |  | $      | 3,602 |   | 92  |  
|31-60 days              |  |        | 3,297  |   | 11  |   |  |          | 682   |   | 9   |   |  |        | 1,590  |   | 14  |   |  |          | 909   |   | 12  |   |  |        | 116   |   | 3   |  
|61-90 days              |  |        | 2,442  |   | 8   |   |  |          | 615   |   | 8   |   |  |        | 833    |   | 7   |   |  |          | 950   |   | 12  |   |  |        | 44    |   | 1   |  
|91-120 days             |  |        | 1,993  |   | 6   |   |  |          | 519   |   | 6   |   |  |        | 524    |   | 5   |   |  |          | 799   |   | 10  |   |  |        | 151   |   | 4   |  
|121-150 days            |  |        | 1,389  |   | 5   |   |  |          | 393   |   | 5   |   |  |        | 411    |   | 4   |   |  |          | 577   |   | 8   |   |  |        | 8     |   | -   |  
|Greater than 150 days*  |  |        | 4,842  |   | 15  |   |  |          | 2,419 |   | 30  |   |  |        | 45     |   | -   |   |  |          | 2,378 |   | 31  |   |  |        | -     |   | -   |  
|Totals                  |  | $      | 30,752 |   | 100 | % |  | $        | 7,938 |   | 100 | % |  | $      | 11,213 |   | 100 | % |  | $        | 7,680 |   | 100 | % |  | $      | 3,921 |   | 100 | %
|                       
|                        |  |        |        |   |     |   |  |          |       |   |     |   |  |        | Third  |   |     |   |  |          |       |   |     |   |  |        |       |   |     |  
|                        |  |        |        |   |     |   |  |          |       |   |     |   |  |        | Party  |   |     |   |  |          |       |   |     |   |  |        |       |   |     |  
|(in thousands)          |  | Total  |        |   |     |   |  | Medicare |       |   |     |   |  | Payers |        |   |     |   |  | Self-pay |       |   |     |   |  | HMOs  |       |   |    
|As of July 31, 2007     |  | Amount |        | % |     |   |  | Amount   |       | % |     |   |  | Amount |        | % |     |   |  | Amount   |       | % |     |   |  | Amount |       | % |    
|1-30 days               |  | $      | 18,120 |   | 50  |   |  | $        | 3,630 |   | 40  |   |  | $      | 8,561  |   | 59  |   |  | $        | 2,309 |   | 30  |   |  | $      | 3,620 |   | 69  |  
|31-60 days              |  |        | 5,306  |   | 15  |   |  |          | 614   |   | 7   |   |  |        | 2,731  |   | 19  |   |  |          | 1,434 |   | 19  |   |  |        | 527   |   | 10  |  
|61-90 days              |  |        | 3,795  |   | 10  |   |  |          | 629   |   | 7   |   |  |        | 1,735  |   | 12  |   |  |          | 1,222 |   | 16  |   |  |        | 209   |   | 4   |  
|91-120 days             |  |        | 2,811  |   | 8   |   |  |          | 530   |   | 6   |   |  |        | 881    |   | 6   |   |  |          | 732   |   | 10  |   |  |        | 668   |   | 13  |  
|121-150 days            |  |        | 1,589  |   | 4   |   |  |          | 405   |   | 4   |   |  |        | 263    |   | 2   |   |  |          | 779   |   | 10  |   |  |        | 142   |   | 2   |  
|Greater than 150 days** |  |        | 4,760  |   | 13  |   |  |          | 3,246 |   | 36  |   |  |        | 226    |   | 2   |   |  |          | 1,173 |   | 15  |   |  |        | 115   |   | 2   |  
|Totals                  |  | $      | 36,381 |   | 100 | % |  | $        | 9,054 |   | 100 | % |  | $      | 14,397 |   | 100 | % |  | $        | 7,649 |   | 100 | % |  | $      | 5,281 |   | 100 | %

|*  | Total includes $3,151 fully reserved over 210 days as of January 31, 2008.
|-- | --------------------------------------------------------------------------
|  
|** | Total includes $2,432 fully reserved over 210 days as of July 31, 2007.   

28

---



Income Taxes

The Company accounts for income taxes under the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The liability method requires that any tax benefits recognized for net operating loss carry forwards and
other items be reduced by a valuation allowance where it is not more likely than not the benefits will be realized in the foreseeable future. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled. Under the liability method, the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that
includes the enactment date.

On August 1, 2007, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109
(FIN 48). FIN 48 prescribes a more-likely-than-not threshold for the recognition and derecognition of tax positions, provides guidance on the accounting for interest and penalties relating to tax positions and requires that the
cumulative effect of applying the provisions of FIN 48 be reported as an adjustment to the opening balance of retained earnings or other appropriate components of equity or net assets in the statement of financial position. The Company did not have
any significant unrecognized tax positions and there was no material effect on our financial condition or results of operations as a result of implementing FIN 48.

Inventory

The Company values inventory at the lower of cost (first-in, first-out) or market. Work-in-process and finished goods inventories consist of material, labor, and manufacturing overhead. On a quarterly basis, we review
inventory quantities on hand and analyze the provision for excess and obsolete inventory based on our estimate of sales forecasts based on sales history and anticipated future demand. Our estimate of future product demand may not be accurate and we
may understate or overstate the provision for excess and obsolete inventory. Accordingly, unanticipated changes in demand could have a significant impact on the value of our inventory and results of operations. At January 31, 2008 and July 31, 2007,
respectively, the reserve for excess and obsolete inventory was $442,000 and $379,000.

Recent Accounting Pronouncements

In December 2007, the FASB issued Statement No. 141(R),Business Combinations(Statement 141 (R)), a replacement of FASB
Statement No. 141. Statement 141(R) is effective for fiscal years beginning on or after December 15, 2008 and applies to all business combinations. Statement 141(R) provides that, upon initially obtaining control, an acquirer shall recognize 100
percent of the fair values of acquired assets, including goodwill, and assumed liabilities, with only limited exceptions, even if the acquirer has not acquired 100 percent of its target. As a consequence, the current step acquisition model will be
eliminated. Additionally, Statement 141(R) changes current practice, in part, as follows: (1) contingent consideration arrangements will be fair valued at the acquisition date and included on that basis in the purchase price consideration; (2)
transaction costs will be expensed as incurred, rather than capitalized as part of the purchase price; (3) pre-acquisition contingencies, such as legal issues, will generally have to be accounted for in purchase accounting at fair value; and (4) in
order to accrue for a restructuring plan in purchase accounting, the requirements in FASB Statement No. 146,Accounting for Costs Associated with Exit or Disposal Activities, would have to be met at the acquisition date. While there is no expected impact to our consolidated financial statements on the accounting for acquisitions completed prior to July 31, 2009, the adoption of Statement 141(R) on
August 1, 2009 could materially change the accounting for business combinations consummated subsequent to that date.

In September 2006, the FASB issued Statement 157,Fair Value Measurement(Statement 157). Statement 157 defines fair value,
establishes a framework for measuring fair value in generally accepted accounting principles and establishes a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value. Statement 157 also expands financial statement
disclosures about fair value measurements. On February 6, 2008, the FASB issued FASB Staff Position (FSP) 157-2 which delays the effective date of Statement 157 for one year for all nonfinancial assets and nonfinancial liabilities, except those that
are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Statement 157 and FSP 157-2 are effective for financial statements issued for fiscal years beginning after November 15, 2007. When
required to adopt Statement 157, the Company expects to elect a partial deferral of Statement 157 as provided for under the provisions of FSP 157-2. The Company does not believe that the impact of partially adopting Statement 157 effective August 1,
2008 will have a material effect on the Companys consolidated financial statements.

29

---



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115. SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective of SFAS No. 159 is to provide opportunities to mitigate volatility in reported earnings
caused by measuring related assets and liabilities differently without having to apply hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that
choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company has not completed the assessment as to whether the impact of the adoption
of SFAS No. 159 will have a material impact on its financial condition or results of operations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Rate Risk

The financial reporting of our non-US. subsidiaries is denominated in currencies other than the U.S. dollar. Since the functional currency of our non-US. subsidiaries is the local currency, foreign currency translation
adjustments are accumulated as a component of accumulated other comprehensive income in stockholders equity. Assuming a hypothetical aggregate change of 10% in the exchange rates of foreign currencies against the U.S. dollar at January 31,
2008, our assets and liabilities would increase or decrease by approximately $1,446,000 and $506,000, respectively, and our net sales and net earnings would increase or decrease by approximately $1,309,000 and $42,000, respectively, on an annual
basis. We also maintain intercompany balances and loans receivable with subsidiaries with different local currencies. These amounts are at risk of foreign exchange losses if exchange rates fluctuate. Assuming a hypothetical aggregate change of 10%
in the exchange rates of foreign currencies against the U.S. dollar at January 31, 2008, our pre-tax earnings would be favorably or unfavorably impacted by approximately $34,000 on an annual basis.

Interest Rate Risk

Our excess cash is invested in highly liquid, short term (30  90 days) commercial paper and money market funds with high credit ratings. Changes in interest rates may affect the investment income we earn on cash
and cash equivalents debt and therefore affect our cash flows and results of operations. As of January 31, 2008, we were exposed to interest rate change market risk with respect to our short-term investments of $96.9 million. The short-term
investments earn interest ranging from 3.92% to 4.25%. Each 100 basis point (or 1%) fluctuation in interest rates would increase or decrease interest income on the short-term investments by approximately $1.0 million on an annual basis.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Companys management conducted an evaluation (as required under Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended (the
Exchange Act)) of the Companys disclosure controls and procedures (as such term is defined under the Exchange Act), under the supervision and with the participation of the principal executive officer and the principal
financial officer. Based on this evaluation, the principal executive officer and the principal financial officer concluded that the Companys disclosure controls and procedures are effective as of the end of the period covered by this report.
Notwithstanding the foregoing, a control system, no matter how well designed and operated can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise
required to be set forth in the Companys periodic reports.

(b) Changes in Internal Controls over Financial Reporting

There was no change in the Companys internal
controls over financial reporting during the fiscal quarter covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

30

---



PART II  OTHER INFORMATION

Item 1.Legal Proceedings

There have been no material developments with respect to previously reported legal proceedings discussed in the annual report on Form 10-K for the fiscal year ended July 31, 2007 filed with the Securities and Exchange
Commission.

Item 1A.Risk
Factors

There have been no material changes from the risk factors disclosed in Part 1, Item 1, of the Companys Annual Report on Form 10-K for the fiscal year ended July 31, 2007.

Item 4.Submission
of matters to a vote of security holders

(a) The Annual Meeting of Shareholders was held on January 24, 2008.

(b) The following matters were voted upon and the results were as follows:

(1) Barry W. Weiner, Melvin F. Lazar and Bernard Kasten were nominated by management and elected by the shareholders to serve as Class II Directors until the 2011 Annual Meeting of Shareholders or until their
respective successors are elected and qualified.

The shareholders voted 31,484,295, 31,746,813, and 31,754,041 shares in the affirmative for Barry W. Weiner, Melvin F. Lazar and Bernard Kasten, respectively, and withheld 1,065,222, 802,704, and 795,476 shares for
Barry W. Weiner, Melvin F. Lazar and Bernard Kasten, respectively.

(2) The shareholders voted 32,150,139 in the affirmative with respect to the ratification of Ernst & Young LLP as the Company's independent auditors for the fiscal year ending July 31, 2008, 324,930 shares against
and 71,449 shares abstained.

Item 6.Exhibits



| | Exhibit No. | Exhibit                                                                                                                                                         
| | ----------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1        | Certification of Elazar Rabbani, Ph.D.
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                           
| | 31.2        | Certification of Barry Weiner pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                    
| | 32.1        | Certification of Elazar
          Rabbani, Ph.D. pursuant to 18 U.S.C. ss. 1350,
          as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | 32.2        | Certification of Barry Weiner pursuant
        to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002.                  

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                     |  | ENZO BIOCHEM, INC.
|-------------------- |  | ------------------
|                     |  | (Registrant)      
|                    
|Date: March 11, 2008 |  | by:               
|                     |  |                   

31

---