UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 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, 2007

                                       or

|_| 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 001-09974

                               ENZO 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)

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.01 par value                  New York Stock Exchange
-----------------------------                  -----------------------
(Title of Class)                               (Name of Each Exchange
                                               on which Registered)

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.

                               Yes |X|   No |_|

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 filer  |_| Accelerated filer  |X| Non- accelerated filer |_|

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

                               Yes |_|   No |X|

     As of March 1, 2007, the Registrant had approximately 36,650,300 shares of
Common Stock outstanding.
<PAGE>


                               ENZO BIOCHEM, INC.
                                    FORM 10-Q
                                January 31, 2007

                                      INDEX


                         PART I - FINANCIAL INFORMATION
                         ------------------------------

Item 1.  Consolidated Financial Statements

         Consolidated Balance Sheets
         January 31, 2007 (unaudited) and July 31, 2006                        3

         Consolidated Statements of Operations
         For the three and six months ended January 31, 2007
         and 2006 (unaudited)                                                  4

         Consolidated Statements of Cash Flows
         For the six months ended January 31, 2007 and 2006 (unaudited)        5

         Notes to Consolidated Financial Statements                            6

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations                        16

Item 3.  Quantitative and Qualitative Disclosures About Market Risk           28

Item 4.  Controls and Procedures                                              28


                           Part II - OTHER INFORMATION
                           ---------------------------

Item 1.  Legal Proceedings                                                    28

Item 1A.  Risk Factors                                                        29

Item 4.  Submission of Matters to a Vote of Security Holders                  29

Item 6.  Exhibits                                                             29

Signatures                                                                    29

                                       2
<PAGE>


PART 1 - FINANCIAL INFORMATION
ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS


                               ENZO BIOCHEM, INC.
                           CONSOLIDATED BALANCE SHEETS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

ASSETS                                                  January 31,    July 31,
                                                               2007       2006
Current assets:                                         (unaudited)    (Note 1)
                                                        -----------    --------
  Cash and cash equivalents                                $110,916    $ 69,854
  Accounts receivable, net of allowances                     10,249      10,447
  Inventories                                                 2,383       2,401
  Prepaid expenses                                              772       1,465
  Recoverable and prepaid income taxes                        1,807       1,931
                                                           --------    --------
Total current assets                                        126,127      86,098

Property, plant, and equipment, net of accumulated
  depreciation and amortization                               5,669       5,848
Goodwill                                                      7,452       7,452
Patent costs, net of accumulated amortization                 1,218       1,257
Other                                                           989         869
                                                           --------    --------
Total assets                                               $141,455    $101,524
                                                           ========    ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable - trade                                 $    985    $  1,304
  Accrued liabilities                                         6,408       4,403
  Other current liabilities                                     470         230
                                                           --------    --------
Total current liabilities                                     7,863       5,937

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: 36,232,800 at
    January 31, 2007 and 32,844,200 at July 31, 2006            362         328
  Additional paid-in capital                                280,258     236,002
  Less treasury stock at cost: 582,474 shares at
    January 31, 2007 and 569,700 shares at July 31, 2006     (8,686)     (8,499)
  Accumulated deficit                                      (138,342)   (132,244)
                                                           --------    --------
Total stockholders' equity                                  133,592      95,587
                                                           --------    --------
Total liabilities and stockholders' equity                 $141,455    $101,524
                                                           ========    ========


                                        3

                 The accompanying notes are an integral part of
                     these consolidated financial statements
<PAGE>


                               ENZO BIOCHEM, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                         Three Months Ended             Six Months Ended
                                                             January 31,                   January 31,
Revenues:                                                2007           2006           2007           2006
                                                       -------        -------        -------        -------
<S>                                                    <C>            <C>            <C>            <C>
  Product revenues                                        $725         $1,434         $1,816         $2,721
  Royalty income                                           909            675          2,207          1,534
  Clinical laboratory services                           8,960          8,007         17,014         16,026
                                                       -------        -------        -------        -------
                                                        10,594         10,116         21,037         20,281

Costs and expenses and other (income):
  Cost of product revenues                                 370            385            925            926
  Cost of clinical laboratory services                   4,067          3,431          7,563          6,912
  Research and development expense                       2,459          1,911          4,320          3,461
  Selling, general, and administrative expense           7,210          7,326         12,781         12,781
  Provision for uncollectible accounts receivable        1,180          1,209          2,094          2,354
  Legal expense                                          1,952          1,632          4,110          3,494
  Interest income                                       (1,168)          (680)        (2,079)        (1,387)
  Other income                                            (699)            --         (2,699)            --
                                                       -------        -------        -------        -------
                                                        15,371         15,214         27,015         28,541
                                                       -------        -------        -------        -------

Loss before income taxes                                (4,777)        (5,098)        (5,978)        (8,260)
(Provision) benefit for income taxes                       (75)           659           (120)           536
                                                       -------        -------        -------        -------
Net loss                                               ($4,852)       ($4,439)       ($6,098)       ($7,724)
                                                       =======        =======        =======        =======

Net loss per common share:
  Basic                                                 ($0.14)        ($0.14)        ($0.18)        ($0.24)
                                                       =======        =======        =======        =======
  Diluted                                               ($0.14)        ($0.14)        ($0.18)        ($0.24)
                                                       =======        =======        =======        =======

Weighted average common shares outstanding:
  Basic                                                 34,486         32,200         33,382         32,179
                                                       =======        =======        =======        =======
  Diluted                                               34,486         32,200         33,382         32,179
                                                       =======        =======        =======        =======
</TABLE>


                                        4

                 The accompanying notes are an integral part of
                     these consolidated financial statements
<PAGE>


                                ENZO BIOCHEM, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    UNAUDITED
                                 (IN THOUSANDS)


                                                            Six Months Ended
                                                              January  31,
OPERATING ACTIVITIES                                       2007          2006
                                                         --------      --------
Net loss                                                  ($6,098)      ($7,724)

Adjustments to reconcile net loss to net cash
used in operating activities:
    Depreciation and amortization of property,
      plant and equipment                                     489           526
    Amortization of patent costs                               39            37
    Provision for uncollectible accounts receivable         2,094         2,354
    Deferred taxes                                             --           640
    Share based compensation charges                          870           869
    Accrual for 401(k) employer match                         418            --
    Issuance of stock for 401(k) employer match                --           401
    Loss on marketable securities                              --           153
    Other                                                      10            --

Changes in operating assets and liabilities:
    Accounts receivable                                    (1,896)         (585)
    Inventories                                                18          (104)
    Prepaid expenses                                          693           868
    Recoverable and prepaid income taxes                      124        (1,204)
    Accounts payable - trade                                 (319)         (765)
    Accrued liabilities                                     1,587        (1,343)
    Other current liabilities                                 240          (509)
                                                         --------      --------
 Adjustments                                                4,367         1,338
                                                         --------      --------

           Net cash used in operating activities           (1,731)       (6,386)
                                                         --------      --------

INVESTING ACTIVITIES
    Capital expenditures                                     (310)         (948)
    Sales of marketable securities                             --         6,761
    Purchases of marketable securities                         --           (69)
    Increase in cash surrender values                        (117)          (51)
    Increase in security deposits                              (3)            1
                                                         --------      --------
        Net cash (used in) provided by
          investing activities                               (430)        5,694
                                                         --------      --------

FINANCING ACTIVITIES
    Net proceeds from issuance of common stock             43,106            --
    Proceeds from the exercise of stock options               117            73
                                                         --------      --------
        Net cash provided by financing activities          43,223            73
                                                         --------      --------

Net increase (decrease) in cash and cash equivalents       41,062          (619)
Cash and cash equivalents at the beginning of period       69,854        76,981
                                                         --------      --------
Cash and cash equivalents at the end of period           $110,916       $76,362
                                                         ========      ========


                                        5

                 The accompanying notes are an integral part of
                     these consolidated financial statements
<PAGE>


                               ENZO BIOCHEM, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             As of January 31, 2007
                  and for the three and six month periods ended
                            January 31, 2007 and 2006
                                   (Unaudited)

Note 1 - Basis of Presentation
------------------------------

The  accompanying   unaudited  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 (the "Company"
or "Companies").  The consolidated  balance sheet as of January 31, 2007 and the
consolidated statements of operations and statements of cash flows for the three
and six month  periods ended January 31, 2007 and 2006 are unaudited and reflect
all adjustments  (consisting only of normal recurring adjustments) which are, in
the opinion of management,  necessary for a fair  presentation  of the financial
position  and  operating  results  for the  interim  periods.  The  consolidated
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  for the year  ended  July  31,  2006  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, 2006 has
been derived from the audited financial  statements at that date. The results of
operations  for  the  three  and six  months  ended  January  31,  2007  are not
necessarily  indicative of the results to be expected for the entire fiscal year
ending July 31, 2007.

Recent Accounting Pronouncements

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections  ("SFAS  154"),  a  replacement  of APB Opinion  No. 20,  Accounting
Changes,  and FASB  Statement  No. 3,  Reporting  Accounting  Changes in Interim
Financial Statements".  SFAS 154 changes the requirements for the accounting for
and reporting of a change in accounting  principle.  Previously,  most voluntary
changes in accounting  principles  required  recognition via a cumulative effect
adjustment  within net income for the period of the  change.  SFAS 154  requires
retrospective  application to prior periods' financial statements,  unless it is
impracticable to determine either the period-specific  effects or the cumulative
effect of the change.  SFAS 154 is  effective  for  accounting  changes  made in
fiscal years  beginning  after  December 15,  2005;  however,  SFAS 154 does not
change the transition provisions of any existing accounting pronouncements.  The
adoption of SFAS 154 did not have a material  impact on the Company's  financial
condition or results of operations.

In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an  interpretation  of FASB Statement No. 109,
Accounting  for Income  Taxes"  ("SFAS  109")",  to clarify the  accounting  for
uncertainty in income taxes recognized in an enterprise's  financial  statements
in  accordance  with SFAS 109.  This  Interpretation  prescribes  a  recognition
threshold and measurement  attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN
48  also  provides  guidance  on  derecognition,  classification,  interest  and
penalties,  accounting  in interim  periods,  disclosure,  and  transition.  The
provisions of FIN 48 are effective for fiscal years beginning after December 15,
2006.  The  Company  has not  evaluated  the  impact of FIN 48 on its  financial
statements at this time.

                                       6
<PAGE>


In  September  2006,  the  SEC  released  Staff  Accounting   Bulletin  No.  108
"Considering   the  Effects  of  Prior  Year   Misstatements   When  Quantifying
Misstatements  in  Current  Year  Financial  Statements"  ("SAB  108").  SAB 108
provides  interpretative  guidance on how public  companies  quantify  financial
statement misstatements.  There have been two common approaches used to quantify
such errors.  Under an income statement  approach,  the "roll-over"  method, the
error is quantified as the amount by which the current year income  statement is
misstated.  Alternatively,  under a balance sheet  approach,  the "iron curtain"
method,  the error is quantified as the  cumulative  amount by which the current
year balance sheet is  misstated.  In SAB 108, the SEC  established  an approach
that requires  quantification of financial statement  misstatements based on the
effects of the misstatements on each of the company's  financial  statements and
the related financial statement disclosures.  This model is commonly referred to
as a "dual approach" because it requires quantification of errors under both the
roll-over and iron curtain  methods.  SAB 108 is effective for the Company as of
August 1,  2007.  The  adoption  of SAB 108 is not  expected  to have a material
impact on the Company's consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". This
Statement  defines fair value,  establishes a framework for measuring fair value
and expands  disclosure  about fair value  measurements,  and is  effective  for
financial  statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years. The Company has not evaluated the
effect that the adoption of this Statement will have on its financial statements
at this time.

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 159").  This statement  permits  entities to choose to
measure many financial  instruments  and certain other items at fair value.  The
objective  is to improve  financial  reporting by  providing  entities  with the
opportunity  to mitigate  volatility  in reported  earnings  caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions. SFAS 159 is effective as of the beginning of fiscal years
that begin after  November 15, 2007.  The Company has not  evaluated  the effect
that the adoption of this  Statement  will have on its  financial  statements at
this time.

Reclassifications

Certain balances in the prior period have been  reclassified to conform with the
presentation in the current period.

Note 2 - 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, 2007
and 2006.  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, 2007 and 2006, 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.

                                       7
<PAGE>


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
(In thousands)                                  January 31,        January 31,
                                                2007   2006        2007   2006
                                                ----   ----        ----   ----
Potential net shares, issued from                691    427         562    496
exercise of "in the money" employee and         ====   ====        ====   ====
director  stock options and  restricted
stock awards, excluded from diluted net
loss per share calculation


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
(In thousands)                                  January 31,        January 31,
                                                2007   2006        2007   2006
                                                ----   ----        ----   ----
"Out of the money"  stock options                905    963         905    963
                                                ====   ====        ====   ====


Note 3 - 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,  2007 and 2006  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 123R.

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,
-----------------------------------
                                                2007   2006        2007    2006
                                                ----   ----        ----    ----
Stock options                                   $367   $420        $676    $840
Restricted stock awards                          133     29         194      29
                                                ----   ----        ----    ----
Total                                           $500   $449        $870    $869
                                                ====   ====        ====    ====

Impact on basic and diluted net loss per
common share                                   $0.02  $0.01       $0.03   $0.03
                                               =====  =====       =====   =====

As included in the statements of operations
-------------------------------------------
Cost of product revenues                        $  3   $  0        $  6    $ 38
Research and development                          51     71          98     142
Selling, general and administrative              446    348         766     689
                                                ----   ----        ----    ----
                                                $500   $449        $870    $869
                                                ====   ====        ====    ====

No excess tax benefits  were  recognized  during the three and six month periods
ended January 31, 2007 and 2006.

                                       8
<PAGE>


STOCK OPTION PLANS

A summary of the activity  relating to the Company's  stock option plans for the
six month period ended January 31, 2007 is as follows:

                                                        Weighted
                                                         Average      Aggregate
                                                        Exercise      Intrinsic
                                           Options        Price         Value
                                          ---------     --------      ----------
Outstanding at August 1, 2006             2,877,727       $13.20      $3,700,000
Granted                                          --           --      ==========
Exercised                                   (35,359)       $8.59
Cancelled                                   (69,098)      $13.09
                                          ---------
Outstanding at end of period              2,773,270       $13.27      $8,138,000
                                          =========                   ==========
Exercisable at end of period              2,588,409       $13.31      $7,733,000
                                          =========                   ==========
Available for grant at January 31, 2007     600,900
                                          =========

The Company did not grant stock options  during the six months ended January 31,
2007.  As of  January  31,  2007,  there  was  approximately  $594,000  of total
unrecognized   compensation   cost  related  to  nonvested  stock   option-based
compensation,  which  will  be  recognized  over  a  weighted  average  life  of
approximately one year.

During the six months ended January 31, 2007 and 2006, the Company received cash
proceeds of approximately $117,000 and $73,000, respectively,  from the exercise
of 35,359 and 227,816 stock options, respectively. The aggregate intrinsic value
of stock  options  exercised  during the six months  ended  January 31, 2007 and
2006,  including  the  non-cash  transactions  (Note 4) was  approximately  $0.2
million and $1.7 million, respectively.

During the year ended July 31, 2006, the Company  granted  100,000  options to a
consultant  with an exercise  price of $24.84,  which vested over six months and
have a two year term.  The fair value of these options on September 6, 2006 (the
vesting  date) was $89,000.  The fair value of the options,  which was accounted
for as a variable instrument, was fair valued and recognized as expense over the
six month vesting  term.  The  assumptions  used to fair value this option grant
were as follows:  risk free  interest  rate of 4.97%,  expected term of 2 years,
expected  volatility  of 49%,  and no dividend  yield.  In  connection  with the
options  issued  to this  consultant,  the  Company  recognized  an  expense  of
approximately  $9,000 in  selling,  general  and  administrative  expense in the
accompanying statement of operations for the six months ended January 31, 2007.

                                       9
<PAGE>


RESTRICTED STOCK AWARDS

During the six months ended January 31, 2007, the compensation  committee of the
Company's  board  of  directors   approved  grants  of  restricted   stock-based
compensation  awards  (the  "Awards")  of 72,400  shares to certain  independent
directors, executive officers and employees. During the six months ended January
31,  2006,  the  compensation  committee  of the  Company's  board of  directors
approved  Awards  of 45,000  shares  to  certain  independent  directors  and an
employee.

A summary of the activity  pursuant to the  Company's  Awards for the six months
ended January 31, 2007 is as follows:

                                                           Weighted Average
                                               Awards         Award Price
                                              --------     ----------------
Nonvested at August 1, 2006                     77,450          $12.21
Granted                                         72,400          $14.85
Vested                                         (14,375)         $13.64
Forfeited                                       (6,800)         $13.41
                                               -------
Nonvested at end of period                     128,675          $13.47
                                               =======

The fair value of  nonvested  shares is  determined  based on the closing  stock
price on the grant date. As of January 31, 2007,  there was  approximately  $1.5
million of total unrecognized  compensation cost related to nonvested restricted
stock-based  compensation to be recognized over a weighted average period of two
years.

Note 4 - Supplemental disclosure for statement of cash flows
------------------------------------------------------------

Supplemental  information with respect to the Company's consolidated  statements
of cash flows is as follows:

                                             Six months ended January 31,
(In thousands)                                    2007          2006
                                                  ----          ----
Taxes (refunded) paid - net                       $(56)          $28
                                                  ====          ====

During  the six months  ended  January  31,  2007,  an  officer  of the  Company
exercised  24,021  stock  options  in  a  non-cash   transaction.   The  officer
surrendered  12,774 shares of previously  acquired  common stock to exercise the
stock options. The Company recorded approximately $0.2 million, the market value
of the surrendered shares, as treasury stock.

During the six months ended  January 31, 2006,  certain  officers of the Company
exercised  221,116  stock  options  in  a  non-cash  transaction.  The  officers
surrendered  180,411 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 5 - Inventories
--------------------

Inventories,  net of reserves for excess and  obsolete  inventory of $57,000 and
$238,000, respectively, consist of the following, as of:

  (In thousands)                         January 31, 2007    July 31, 2006
  --------------                         ----------------    -------------
  Raw materials                                  $19                $38
  Work in process                              1,357              1,518
  Finished products                            1,007                845
                                              ------             ------
                                              $2,383             $2,401
                                              ======             ======

                                       10
<PAGE>


Note 6 - Accrued liabilities and other current liabilities

Accrued liabilities consist of:

In 000's                                 January 31, 2007   July 31, 2006
--------                                 ----------------   -------------
  Legal                                      $1,940             $1,974
  Payroll, benefits, and commissions          2,396                868
  Research and development                      589                408
  Professional fees                             625                369
  Outside reference lab testing                 277                122
  Other                                         581                662
                                             ------             ------
                                             $6,408             $4,403
                                             ======             ======

Other current liabilities consist of:

In 000's                                 January 31, 2007   July 31, 2006
--------                                 ----------------   -------------
  Installment payable                          $150               $150
  Deferred revenue                              320                 80
                                             ------             ------
                                               $470               $230
                                             ======             ======

Note 7 - 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 tax  provisions  for the three and six months  ended  January  31, 2007 were
based on state and local  taxes,  and 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 tax benefit for the three months ended  January 31, 2006  differed  from the
expected net operating loss  carryforward  benefit at the U.S. federal statutory
rate of 34% primarily due to limitations on the timing of the recognition of the
Company's then available  federal tax carryback  benefit for taxes paid in prior
years.  The tax benefit  also  differs  from the  expected  net  operating  loss
carryforward  benefit  due to the  inability  to  recognize  such  benefit.  The
carryforward  benefit could not be recognized because of uncertainties  relating
to future taxable income, in terms of both its timing and its sufficiency, which
would have enabled the Company to realize the federal carryforward benefit.

The tax benefit for the six months  ended  January  31, 2006  differed  from the
expected net operating loss  carryforward  benefit at the U.S. federal statutory
rate of 34% primarily due to limitations on the timing of the recognition of the
Company's then available  federal tax carryback  benefit for taxes paid in prior
years.  The tax benefit  also  differs  from the  expected  net  operating  loss
carryforward  benefit  due to the  inability  to  recognize  such  benefit.  The
carryforward  benefit could not be recognized because of uncertainties  relating
to future taxable income, in terms of both its timing and its sufficiency, which
would have enabled the Company to realize the federal carryforward benefit. Also
due to these uncertainties, the Company recorded during the first quarter of the
2006  period  a  valuation  allowance  equal  to its net  deferred  tax  assets,
including the federal net operating loss  carryforward  benefit generated during
the first  quarter  of the 2006  period.  The  Company  recorded  the  valuation
allowance  as it  concluded  that it was not more  likely  than not that its net
deferred  tax  assets  would be  realized  in the  foreseeable  future  based on
positive and negative evidence available at the time.

                                       11
<PAGE>


In November 2005, the FASB issued FSP FAS 123(R)-3, "Transition Election Related
to Accounting for the Tax Effects of Share-Based  Payment Awards", to provide an
alternate transition method for the implementation of SFAS 123(R).  Because some
entities do not have,  and may not be able to re-create,  information  about the
net excess tax benefits  that would have  qualified  as such had those  entities
adopted  SFAS 123(R) for  recognition  purposes,  this FSP  provides an elective
alternative   transition  method.  The  method  comprises  (a)  a  computational
component that establishes a beginning balance of the additional paid in capital
pool ("APIC pool") related to employee  compensation and (b) a simplified method
to determine the subsequent  impact on the APIC pool of employee awards that are
fully  vested and  outstanding  upon the  adoption of SFAS  123(R).  The Company
adopted the principles set forth in this FSP to determine its APIC pool.

Note 8 - Royalty 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. Royalty income arising from the Agreement is included in the Life Sciences
segment (see Note 11).

Note 9 - Other income
---------------------

GAIN ON PATENT LITIGATION SETTLEMENT

The Company as plaintiff and Sigma Aldrich  ("Sigma")  entered into a Settlement
Agreement and Release effective September 15, 2006 (the "Settlement Agreement").
Pursuant to the Settlement  Agreement,  the Company's  litigation with Sigma was
dismissed  and the Company  recognized  a $2 million  gain on patent  litigation
settlement included in "Other income" in the accompanying consolidated statement
of operations for the six months ended January 31, 2007.

PAYMENT FROM FORMER DISTRIBUTOR

During the quarter  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 has
been included in "Other income" in the accompanying  consolidated  statements of
operations for the three and six months ended January 31, 2007.

                                       12
<PAGE>


Note 10 - Stockholders' Equity
------------------------------

On December 8, 2006,  the Securities and Exchange  Commission  ("SEC")  declared
effective  the shelf  Registration  Statement  the Company  filed on Form S-3 on
November 13, 2006. The shelf Registration  Statement allows the Company to offer
and sell up to an aggregate of $100 million of common stock from time to time in
one or more  offerings.  The terms of any such offering  would be established at
the time of such offering.

On December 14, 2006, the Company  entered into a Placement Agent Agreement with
Lazard  Capital  Markets  LLC,  as  exclusive  placement  agent,  relating  to a
"registered  direct"  offering  ("Offering")  of shares of the Company's  common
stock. On December 15, 2006, the Company entered into a definitive  Subscription
Agreement  with  various  institutional  investors  relating  to the  sale of an
aggregate of 3,285,715 shares of common stock for a purchase price of $14.00 per
share.  Net  proceeds  from  the  Offering  aggregating  $43.1  million,  net of
placement  fees and  financing  costs of $2.9  million,  were credited to common
stock and additional paid-in capital.  On December 15, 2006, the Company filed a
prospectus   supplement  with  the  SEC  relating  to  the  Offering  under  the
Registration Statement and supplement thereto.

Subsequent  to January 31,  2007,  the Company  entered  into a Placement  Agent
Agreement  with Lazard  Capital  Markets  LLC,  as  exclusive  placement  agent,
relating to a "registered direct" offering ("Subsequent  Offering") of shares of
the  Company's  common  stock.  Further,  the Company  entered into a definitive
Subscription  Agreement with an investor relating to the sale of an aggregate of
1,000,000  shares of common stock for a purchase price of $15.00 per share.  Net
proceeds from the Subsequent Offering aggregated $14.2 million, net of placement
fees and financing  costs of $800,000 and were received on February 7, 2007. The
shares  of  common  stock  were  registered  under  the   aforementioned   shelf
Registration  Statement  on Form S-3. On February 5, 2007,  the Company  filed a
prospectus supplement with the SEC relating to the Subsequent Offering under the
Registration Statement and supplement thereto.

                                       13
<PAGE>


Note 11 - 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
medical  community.  Prior to the fourth  quarter ended July 31, 2006,  the Life
Sciences and  Therapeutics  segments were reported  together as the Research and
Development  segment. The January 31, 2006 segment information has been restated
to reflect this  change.  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.
Certain expenses were reclassified among segments in the fiscal 2006 periods for
comparative purposes.

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 critical accounting policies.

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

THREE MONTHS ENDED JANUARY 31, 2007

<TABLE>
<CAPTION>
Revenues:                                             Life Sciences    Therapeutics    Clinical Labs      Other    Consolidated
--------                                              -------------    ------------    -------------      -----    ------------
<S>                                                           <C>           <C>               <C>       <C>            <C>
Product revenues                                               $725              --               --         --            $725
Royalty income                                                  909              --               --         --             909
Clinical laboratory services                                     --              --           $8,960         --           8,960
                                                            -------         -------          -------   --------        --------
                                                              1,634              --            8,960         --          10,594

Cost and expenses and other (income):
Cost of products                                                370              --               --         --             370
Cost of clinical laboratory services                             --              --            4,067         --           4,067
Research and development                                        903          $1,556               --         --           2,459
Provision for uncollectible accounts                             --              --            1,180         --           1,180
Selling, general and administrative and legal                   510              --            3,807     $4,845           9,162
Interest income                                                  --              --               --     (1,168)         (1,168)
Other income                                                   (699)             --               --         --            (699)
                                                            -------         -------          -------   --------        --------

Income (loss) before income taxes                              $550         ($1,556)            $(94)   $(3,677)        $(4,777)
                                                            =======         =======          =======   ========        ========

Depreciation and amortization included above                    $44              $4             $201         $9            $258
                                                            =======         =======          =======   ========        ========

Share-based compensation included in above:
   Cost of products                                              $3              --               --         --              $3
   Research and development                                      18             $33               --         --              51
   Selling, general and administrative and legal                  8              --             $152       $286             446
                                                            -------         -------          -------   --------        --------

   Total                                                        $29             $33             $152       $286            $500
                                                            =======         =======          =======   ========        ========

Capital expenditures                                            $18         $    --             $135   $     --            $153
                                                            =======         =======          =======   ========        ========
</TABLE>

                                       14
<PAGE>


THREE MONTHS ENDED JANUARY 31, 2006

<TABLE>
<CAPTION>
Revenues:                                             Life Sciences    Therapeutics    Clinical Labs      Other    Consolidated
--------                                              -------------    ------------    -------------      -----    ------------
<S>                                                          <C>            <C>               <C>       <C>             <C>
Product revenues                                             $1,434              --               --         --          $1,434
Royalty income                                                  675              --               --         --             675
Clinical laboratory services                                     --              --           $8,007         --           8,007
                                                             ------         -------          -------   --------        --------
                                                              2,109              --            8,007         --          10,116

Cost and expenses and other (income):
-------------------------------------
Cost of products                                                385              --               --         --             385
Cost of clinical laboratory services                             --              --            3,431         --           3,431
Research and development                                        791          $1,120               --         --           1,911
Provision for uncollectible accounts                             --              --            1,209         --           1,209
Selling, general and administrative and legal                   569              --            3,922     $4,467           8,958
Interest income                                                  --              --               --       (680)           (680)
                                                             ------         -------          -------   --------        --------

Income (loss) before income taxes                              $364         ($1,120)           $(555)   $(3,787)        $(5,098)
                                                             ======         =======          =======   ========        ========

Depreciation and amortization included above                    $45              $3             $226         $7            $281
                                                             ======         =======          =======   ========        ========

Share-based compensation included in above:
-------------------------------------------
   Cost of products                                             $30              --               --         --             $30
   Research and development                                      35             $36               --         --              71
   Selling, general and administrative and legal                 22              --             $139       $187             348
                                                             ------         -------          -------   --------        --------

   Total                                                        $87             $36             $139       $187            $449
                                                             ======         =======          =======   ========        ========

Capital expenditures                                            $18         $    --             $135   $     --            $153
                                                             ======         =======          =======   ========        ========

SIX MONTHS ENDED JANUARY 31, 2007

Revenues:                                             Life Sciences    Therapeutics    Clinical Labs      Other    Consolidated
--------                                              -------------    ------------    -------------      -----    ------------
Product revenues                                             $1,816              --               --         --          $1,816
Royalty income                                                2,207              --                                       2,207
Clinical laboratory services                                     --              --          $17,014         --          17,014
                                                            -------        --------          -------   --------        --------
                                                              4,023              --           17,014         --          21,037

Cost and expenses and other (income):
-------------------------------------
Cost of products                                                925              --               --         --             925
Cost of clinical laboratory services                             --              --            7,563         --           7,563
Research and development                                      1,732          $2,588               --         --           4,320
Provision for uncollectible accounts                             --              --            2,094         --           2,094
Selling, general and administrative and legal                 1,008              --            7,083     $8,800          16,891
Interest income                                                  --              --               --     (2,079)         (2,079)
Other income                                                 (2,699)             --               --         --          (2,699)
                                                            -------        --------          -------   --------        --------

Income (loss) before income taxes                            $3,057         ($2,588)            $274    $(6,721)        $(5,978)
                                                            =======        ========          =======   ========        ========

Depreciation and amortization included above                    $92              $7             $411        $18            $528
                                                            =======        ========          =======   ========        ========

Share-based compensation included in above:
-------------------------------------------
   Cost of products                                              $6              --               --         --              $6
   Research and development                                      36             $62               --         --              98
   Selling, general and administrative and legal                 15              --             $238       $513             766
                                                            -------        --------          -------   --------        --------

   Total                                                        $57             $62             $238       $513            $870
                                                            =======        ========          =======   ========        ========

Capital expenditures                                            $61              $7             $242   $     --            $310
                                                            =======        ========          =======   ========        ========
</TABLE>

                                       15
<PAGE>


SIX MONTHS ENDED JANUARY 31, 2006

<TABLE>
<CAPTION>
Revenues:                                             Life Sciences    Therapeutics    Clinical Labs      Other    Consolidated
--------                                              -------------    ------------    -------------      -----    ------------
<S>                                                            <C>          <C>                <C>      <C>             <C>
Product revenues                                             $2,721              --               --         --          $2,721
Royalty income                                                1,534              --               --         --           1,534
Clinical laboratory services                                     --              --          $16,026         --          16,026
                                                             ------        --------         --------   --------        --------
                                                              4,255              --           16,026         --          20,281

Cost and expenses and other (income):
-------------------------------------
Cost of products                                                926              --               --         --             926
Cost of clinical laboratory services                             --              --            6,912         --           6,912
Research and development                                      1,780          $1,681               --         --           3,461
Provision for uncollectible accounts                             --              --            2,354         --           2,354
Selling, general and administrative and legal                 1,093              --            7,252     $7,930          16,275
Interest income                                                  --              --               --     (1,387)         (1,387)
                                                             ------        --------         --------   --------        --------

Income (loss) before income taxes                              $456         ($1,681)           $(492)   $(6,543)        $(8,260)
                                                             ======        ========         ========   ========        ========

Depreciation and amortization included above                    $91              $6             $448        $18            $563
                                                             ======        ========         ========   ========        ========

Share-based compensation included in above:
-------------------------------------------
   Cost of products                                             $38              --               --         --             $38
   Research and development                                      70             $72               --         --             142
   Selling, general and administrative and legal                 40              --             $292       $357             689
                                                             ------        --------         --------   --------        --------
   Total                                                       $148             $72             $292       $357            $869
                                                             ======        ========         ========   ========        ========

Capital expenditures                                            $12            $ --             $615       $321            $948
                                                             ======        ========         ========   ========        ========
</TABLE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

The following  discussion  of our financial  condition and results of operations
should be read in conjunction  with our financial  statements and related notes.
This  discussion  contains  forward-looking  statements  that involve  risks and
uncertainties. Our actual results could differ materially from those anticipated
in  these  forward-looking   statements.  See  "Forward-Looking  and  Cautionary
Statements" in our Form 10-K for the year ended July 31, 2006.  Because of those
factors,  you should not rely on past  financial  results  as an  indication  of
future  performance.  We  believe  that  period-to-period   comparisons  of  our
financial  results to date are not  necessarily  meaningful  and expect that our
results of operations might fluctuate from period to period in the future.

The Company is a life sciences and  biotechnology  company focused on harnessing
genetic  processes to develop  research tools and therapeutics and the provision
of diagnostic services to the medical community. Since its founding in 1976, the
Company's strategic focus has been on the development,  for commercial purposes,
of enabling  technologies in the life sciences field.  The Company's  pioneering
work in genomic  analysis  coupled with its extensive patent estate and enabling
platforms  have  strategically  positioned  the  Company  to  play  a  crucially
important  role in the rapidly  growing  life  sciences and  molecular  medicine
marketplaces.

The Company is comprised of three  interconnected  operating companies that have
evolved  out of the  Company's  core  competence:  the use of  nucleic  acids as
informational molecules and the use of compounds for immune response modulation.
These wholly owned operating  Companies  conduct their operations  through three
segments (see Note 11 in the notes to consolidated financial statements).

                                       16
<PAGE>


The  Company's  sources of revenue  from the Life  Sciences  segment is 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 income.  The Company's other source
of revenue is 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  laboratory'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.  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 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.

For the three months ended January 31, 2007 and 2006,  approximately  7% and 14%
of the  Company's  operating  revenues  were  derived  from  product  sales  and
approximately  8% and 7% were  derived from royalty  income,  respectively,  and
approximately  85% and 79%  were  derived  from  clinical  laboratory  services,
respectively.  For the six months ended January 31, 2007 and 2006, approximately
9% and 13% of the Company's  operating  revenues were derived from product sales
and approximately 10% and 8% were derived from royalty income, respectively, and
approximately  81% and 79%  were  derived  from  clinical  laboratory  services,
respectively.

                                       17
<PAGE>


Comparative Operating Data
--------------------------

(in 000's)                               Three months ended
                                             January 31,       Increase     %
Revenues:                                 2007        2006    (Decrease)  Change
---------                               --------    --------   --------   ------
Product revenues                            $725      $1,434     $(709)    (49)
Royalty income                               909         675       234      35
Clinical laboratory services               8,960       8,007       953      12
                                        --------    --------     -----
Total revenues                            10,594      10,116       478       5

Costs and expenses and other (income):
--------------------------------------
Cost of products                             370         385       (15)     (4)
Cost of laboratory services                4,067       3,431       636      19
Research & development                     2,459       1,911       548      29
Selling, general and administrative        7,210       7,326      (116)     (2)
Provision for uncollectible A/R            1,180       1,209       (29)     (2)
Legal expenses                             1,952       1,632       320      20
Interest income                           (1,168)       (680)     (488)     72
Other income                                (699)         --      (699)     --
                                        --------    --------     -----
Total costs and expenses - net            15,371      15,214       157       1
                                        --------    --------     -----

Loss before income taxes                 ($4,777)    ($5,098)     $321       6%
                                         =======     =======      ====


                              RESULTS OF OPERATIONS
       THREE MONTHS ENDED JANUARY 31, 2007 AS COMPARED TO JANUARY 31, 2006

CONSOLIDATED RESULTS

Product  revenues  during the three  months  ended  January  31,  2007 were $0.7
million  compared to $1.4  million in the year ago  quarter,  a decrease of $0.7
million or 49% due to the continuing competitiveness in the industry.

Royalty  income  during the three months ended January 31, 2007 was $0.9 million
compared to $0.7 million in the year ago quarter, an increase of $0.2 million or
35%.  Royalties  are  earned  from net sales of  Digene  products  subject  to a
license, as reported to the Company by Digene. There are no expenses relating to
royalty income.

Clinical  laboratory  revenues  during the three month period ended  January 31,
2007 was $9.0  million  compared  to $8.0  million in the year ago  quarter,  an
increase of $1.0 million or 12%. The Company  experienced an increase in service
revenues during the 2007 period due to an expansion of a provider agreement with
an  insurance  provider,  which  was  partially  offset  by an  increase  in the
contractual  adjustment expense, which reduces gross billings, to 77.6% of gross
billings  as  compared  to 74.3% in the year ago  period.  The  increase  in the
contractual   adjustment  expense  is  due  to  continued   competitive  pricing
throughout the industry.

The cost of products  during both the three month periods ended January 31, 2007
and 2006 was comparable at $0.4 million.  Gross profit was  negatively  affected
during the 2007 period due to the decline in product revenues.

The cost of clinical  laboratory  services  during the three month  period ended
January  31, 2007 was $4.1  million as compared to $3.4  million in the year ago
period,  an increase of $0.6  million or 19%. The increase was due to the number
of tests performed and higher costs associated with certain routine and esoteric
tests related to the increase in the number of patients being serviced.

                                       18
<PAGE>


Research and  development  expenses were  approximately  $2.4 million during the
three  months ended  January 31, 2007,  compared to $1.9 million in the year ago
quarter,  an increase of $0.5 million or 29%. The increase was  primarily due to
an increase  in clinical  trial  activities  of $0.3  million and an increase in
payroll costs approximating $0.1 million at the Therapeutic segment.

Selling,  general and  administrative  expenses of  approximately  $7.2  million
during the three months ended  January 31, 2007 were  comparable to the year ago
period amount of $7.3 million.

The provision for  uncollectible  accounts  receivable  relating to the clinical
laboratory segment for the three months ended January 31, 2007 was comparable to
the year ago period.

Legal  expense was $1.9 million  during the three months ended  January 31, 2007
compared to $1.6 million in the year ago period,  an increase of $0.3 million or
20%, due to an increase in ongoing patent litigation and corporate activities.

Interest  income  increased by $0.5  million or 72% to $1.2  million  during the
three months  ended  January 31, 2007  compared to $0.7 million  during the 2006
period,  due to an increase in invested  cash from the sale of common stock in a
registered  direct offering which closed in December 2006. The net cash proceeds
from the offering were $43.1 million.  See Liquidity and Capital Resources.  The
Company  earns  interest by  investing  primarily  in short term (30 to 90 days)
commercial paper and money market funds with high credit ratings.

Other income was $0.7 million during the three months ended January 31, 2007 due
to a  payment  of $0.7  million  from  Perkin  Elmer  for  amounts  due  under a
Distribution Agreement (the "Distribution  Agreement") which terminated December
31, 2004,  compared to $0 during the 2006 period. 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 under
the  Distribution  Agreement 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.

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  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 tax benefit for the three months ended  January 31, 2006  differed  from the
expected net operating loss  carryforward  benefit at the U.S. federal statutory
rate of 34% primarily due to limitations on the timing of the recognition of the
Company's then available  federal tax carryback  benefit for taxes paid in prior
years.  The tax benefit  also  differs  from the  expected  net  operating  loss
carryforward  benefit  due to the  inability  to  recognize  such  benefit.  The
carryforward  benefit could not be recognized because of uncertainties  relating
to future taxable income, in terms of both its timing and its sufficiency, which
would have enabled the Company to realize the federal carryforward benefit.

                                       19
<PAGE>


SEGMENT RESULTS

The Life Sciences  segment's income before taxes was approximately  $0.6 million
for the three months  ended  January 31, 2007 as compared to $0.4 million in the
year ago quarter. Segment operating income increased primarily as a result of an
increase in royalty  income of $0.2  million.  Revenues  from product  shipments
declined $0.7 million due to the continuing competitiveness in the industry. The
segment's  income was  positively  impacted  by a payment of $0.7  million  from
Perkin Elmer for amounts due under a  Distribution  Agreement  which  terminated
December 31, 2004.  Segment  operating  expenses  (research and  development and
selling, general and administrative) in both periods were comparable.

The Therapeutics  segment's loss before taxes was approximately $1.6 million for
the three  months  ended  January 31, 2007 as compared to a loss of $1.1 million
for the  earlier  quarter.  The 2007 period  increase  in the  segment  loss was
primarily due to an increase in clinical trial activities of $0.4 million.

The  Clinical  Laboratory  segment  loss before  taxes was $0.1  million for the
period ended January 31, 2007 as compared to segment loss of $0.6 million in the
year ago  quarter.  The 2007  period was  positively  impacted by an increase in
service revenues of $1.0 million  primarily due to the expansion of an insurance
provider  agreement which increased gross profit by  approximately  $0.3 million
and a reduction in selling general and administrative costs of $0.1 million.

The Other  segment's loss before income taxes for the three months ended January
31, 2007 was approximately  $3.7 million and comparable to the year ago quarter.
The segment loss reflects an increase in interest  income of $0.5 million offset
by expense increases.

                              RESULTS OF OPERATIONS
        SIX MONTHS ENDED JANUARY 31, 2007 AS COMPARED TO JANUARY 31, 2006

Comparative Operating Data
--------------------------

(in 000's)                                Six months ended
                                             January 31,       Increase     %
Revenues:                                 2007        2006    (Decrease)  Change
---------                               --------    --------   --------   ------
Product revenues                          $1,816      $2,721      $(905)    (33)
Royalty income                             2,207       1,534        673      44
Clinical laboratory services              17,014      16,026        988       6
                                        --------    --------    -------
Total revenues                            21,037      20,281        756       4

Costs and expenses and other (income):
--------------------------------------
Cost of products                             925         926         (1)     --
Cost of laboratory services                7,563       6,912        651       9
Research & development                     4,320       3,461        859      25
Selling, general and administrative       12,781      12,781         --      --
Provision for uncollectible A/R            2,094       2,354       (260)    (11)
Legal expenses                             4,110       3,494        616      18
Interest income                           (2,079)     (1,387)      (692)     50
Other income                              (2,699)         --     (2,699)
                                        --------    --------    -------
Total costs and expenses - net            27,015      28,541     (1,526)     (5)
                                        --------    --------    -------

Loss before income taxes                 ($5,978)    ($8,260)    $2,282      28%
                                        ========    ========    =======

                                       20
<PAGE>


CONSOLIDATED RESULTS

Product  revenues  during the six months ended January 31, 2007 was $1.8 million
compared to $2.7 million in the year ago quarter,  a decrease of $0.9 million or
33%, due to the continuing competitiveness in the industry.

Royalty  income  during the six months  ended  January 31, 2007 was $2.2 million
compared to $1.5 million in the year ago quarter, an increase of $0.7 million or
44%.  Royalties  are  earned  from net sales of  Digene  products  subject  to a
license, as reported to the Company by Digene. There are no expenses relating to
royalty income.

Clinical  laboratory revenues during the six month period ended January 31, 2007
were $17.0 million compared to $16.0 million in the 2006 period,  an increase of
$1.0  million or 6%. The Company  experienced  an  increase in service  revenues
during the 2007 period  primarily  due to an expansion of an insurance  provider
agreement,  which  was  partially  offset  by an  increase  in  the  contractual
adjustment expense,  which reduces gross billings, to 77.3% of gross billings as
compared  to  74.7%  in the  prior  period.  The  increase  in  the  contractual
adjustment  expense  is due to  continued  competitive  pricing  throughout  the
industry.

The cost of products  during both the six month  periods  ended January 31, 2007
and 2006 was comparable at $0.9 million.  Gross profit was  negatively  affected
during the 2007 period due to the decline in product revenues.

The cost of  clinical  laboratory  services  during the six month  period  ended
January  31,  2007 was $7.6  million as  compared  to $6.9  million in the prior
period, an increase of $0.7 million or 9%. The increase was due to the number of
tests  performed and higher costs  associated  with certain routine and esoteric
tests related to the increase in the number of patients being serviced.

Research and development expenses were approximately $4.3 million during the six
months ended January 31, 2007,  compared to $3.5 million in the 2006 period,  an
increase of $0.8 million or 25%. The increase was  primarily  due to an increase
in clinical  trial  activities  of $0.5 million and an increase in payroll costs
approximating $0.2 million at the Therapeutic segment.

Selling,  general and  administrative  expenses of  approximately  $12.8 million
during the six months ended January 31, 2007 are comparable to the 2006 period.

The provision for  uncollectible  accounts  receivable  relating to the clinical
laboratory  segment for the six months ended  January 31, 2007 was $2.1 million,
compared to $2.4 million during the year ago period,  a decrease of $0.3 million
or  11%.  The  provision   declined  due  to  improved  billing  and  collection
procedures.

Legal  expense was $4.1  million  during the six months  ended  January 31, 2007
compared to $3.5 million in the year ago period,  an increase of $0.6 million or
18%, due to an increase in ongoing patent litigation and corporate activities.

Other  income was $2.7  million  during the six months  ended  January  31, 2007
versus  $0 in the year ago  period.  During  the 2007  period,  the  Company  as
plaintiff and Sigma Aldrich  ("Sigma")  entered into a Settlement  Agreement and
Release effective September 15, 2006 (the "Settlement  Agreement").  Pursuant to
the Settlement Agreement,  the Company's litigation with Sigma was dismissed and
the Company recognized a $2 million gain on patent litigation  settlement during
the six months ended January 31, 2007. In addition,  during the 2007 period, the
Company  received a payment of $0.7  million  from Perkin  Elmer for amounts due
under  a  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

                                       21
<PAGE>


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  under the  Distribution
Agreement  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.

Interest income  increased by $0.7 million or 50% to $2.1 million during the six
months ended January 31, 2007  compared to $1.4 million  during the 2006 period,
due to an  increase  in  invested  cash  from  the  sale of  common  stock  in a
registered  direct offering which closed in December 2006. The net cash proceeds
from the offering were $43.1 million.  See Liquidity and Capital Resources.  The
Company  earns  interest by  investing  primarily  in short term (30 to 90 days)
commercial paper and money market funds with high credit ratings.

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  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 tax benefit for the six months  ended  January  31, 2006  differed  from the
expected net operating loss  carryforward  benefit at the U.S. federal statutory
rate of 34% primarily due to limitations on the timing of the recognition of the
Company's then available  federal tax carryback  benefit for taxes paid in prior
years.  The tax benefit  also  differed  from the expected  net  operating  loss
carryforward  benefit  due to the  inability  to  recognize  such  benefit.  The
carryforward  benefit could not be recognized because of uncertainties  relating
to future taxable income, in terms of both its timing and its sufficiency, which
would have enabled the Company to realize the federal carryforward benefit. Also
due to these uncertainties, the Company recorded during the first quarter of the
2006  period  a  valuation  allowance  equal  to its net  deferred  tax  assets,
including the federal net operating loss  carryforward  benefit generated during
the first  quarter  of the 2006  period.  The  Company  recorded  the  valuation
allowance  as it  concluded  that it was not more  likely  than not that its net
deferred  tax  assets  would be  realized  in the  foreseeable  future  based on
positive and negative evidence available at the time.

SEGMENT RESULTS

The Life Sciences  segment's income before taxes was approximately  $3.1 million
for the six months  ended  January 31,  2007 as compared to $0.5  million in the
2006 period.  The increase is primarily the result of the Company's $2.0 million
patent  litigation  settlement  with Sigma Aldrich and a payment of $0.7 million
from  Perkin  Elmer  for  amounts  due  under  a  Distribution  Agreement  which
terminated  December 31, 2004.  Revenues  from product  shipments  declined $0.9
million due to the continuing competitiveness in the industry,  partially offset
by an increase in royalty  income of $0.7 million.  Segment  operating  expenses
(research  and  development  and selling,  general and  administrative)  in both
periods were comparable.

The  Therapeutics  segment's  loss before  income taxes was  approximately  $2.6
million for the six months ended  January 31, 2007 as compared to a loss of $1.7
million for the 2006 period.  The increase was  primarily  due to an increase in
clinical  trial  activities  of $0.5  million,  an  increase  in  payroll  costs
approximating  $0.2  million,  and an increase in patent  related  costs of $0.1
million.

                                       22
<PAGE>


The Clinical  Laboratory  segment's income before taxes was $0.3 million for the
six months  ended  January 31, 2007 as compared to a loss of $0.5 million in the
2006 period.  The 2007 period was positively  impacted by an increase in service
revenues  due  to  the  expansion  of an  insurance  provider  agreement,  which
increased  gross  profit by  approximately  $0.3  million,  a reduction  of $0.3
million in the provision for  uncollectible  accounts due to continued  improved
billing  and  collection  procedures,  and a  reduction  in selling  general and
administrative costs of $0.2 million.

The Other  segment's loss before taxes for the six months ended January 31, 2007
was approximately $6.7 million as compared to a loss of $6.5 million in the 2006
period.  The increase in the loss before taxes was  primarily due to an increase
in legal fees of $0.6  million due to an increase in ongoing  patent  litigation
and corporate  activities and an increase in compensation costs of approximately
$0.2  million,  partially  offset  by an  increase  in  interest  income of $0.7
million.

LIQUIDITY AND CAPITAL RESOURCES

On December 14, 2006, the Company  entered into a Placement Agent Agreement with
Lazard  Capital  Markets  LLC,  as  exclusive  placement  agent,  relating  to a
"registered  direct"  offering  ("Offering")  of shares of the Company's  common
stock. On December 15, 2006, the Company entered into a definitive  Subscription
Agreement  with  various  institutional  investors  relating  to the  sale of an
aggregate of 3,285,715 shares of common stock for a purchase price of $14.00 per
share.  Net  proceeds  from  the  Offering  aggregating  $43.1  million,  net of
placement  fees and  financing  costs of $2.9  million,  were credited to common
stock and additional paid-in capital.  On December 15, 2006, the Company filed a
prospectus  supplement  with  the SEC  relating  to the  Offering  under a shelf
Registration  Statement  on Form S-3 which was  effective  December  8, 2006 and
supplement thereto.

At January 31,  2007,  our cash and cash  equivalents  were $110.9  million,  an
increase of $41.1 million from cash and cash  equivalents  at July 31, 2006. The
increase in cash during the six months ended  January 31, 2007 was primarily due
to the Offering  proceeds,  a $2.0 million  settlement gain on patent litigation
and cash flow impacts discussed below. The Company had working capital of $118.3
million at January 31,  2007  compared to $80.2  million at July 31,  2006.  The
increase in working capital was primarily the result of the Offering,  offset by
an increase in current liabilities of approximately $2.0 million.

Net cash used in operating  activities for the six months ended January 31, 2007
was  approximately  $1.7  million  as  compared  to net cash  used in  operating
activities  of $6.4 million in the 2006 period.  The decline in net cash used in
operating activities in the 2007 period over the 2006 period of $4.7 million was
primarily due to a decrease in net loss of $1.6 million,  partially attributable
to the other income of $2.7  million in the 2007 period,  and by the net changes
of approximately $3.1 million in operating assets and liabilities, primarily due
to the increase in accrued  liabilities  and the decrease in recoverable  income
taxes during the 2007 period.

Net cash used in investing  activities for the six months ended January 31, 2007
was  approximately  $0.4  million as compared to net cash  provided by investing
activities of $5.7 million in the year ago period, primarily due to a decline in
the sales of marketable securities of approximately $6.7 million. During the six
months ended January 31, 2006,  all  investments in marketable  securities  were
sold and the proceeds reinvested in cash equivalents.

Net cash provided by financing  activities  for the six months ended January 31,
2007 was $43.2  million as compared to $0.1 million in the year ago period.  The
increase was due to the proceeds from the Offering of $43.1  million  previously
discussed.

Subsequent  to January 31,  2007,  the  Company  completed  another  "registered
direct" offering ("Subsequent Offering") for an aggregate of 1,000,000 shares of
common stock for a purchase  price of $15.00 per share.  Net  proceeds  from the
Subsequent  Offering  aggregating  $14.2  million,  net of  placement  fees  and
financing costs of $800,000, were received on February 7, 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.

                                       23
<PAGE>


CONTRACTUAL OBLIGATIONS

There were no significant  changes to the Contractual  Obligations  disclosed in
the Annual Report on Form 10-K for the 2006 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 of America.  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,  the
sales price is fixed or determinable and collectibility is reasonably assured.

ROYALTIES
---------

Royalty  revenues are recorded in the period earned and no royalty related costs
exist.  Royalties  received in advance of being  earned are recorded as deferred
revenues.

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  laboratory  segment's net revenues and percentages by revenue category
for the three and six months ended January 31, 2007 and 2006:

Net revenues                      Three months ended        Three months ended
                                   January 31, 2007          January 31, 2006
                                 --------------------      ---------------------
Revenue category                 (In 000's)    (in %)      (In 000's)     (in %)
----------------                 ----------    ------      ----------     ------
Medicare                           $2,008         22         $1,968         24
Third party carriers                5,583         62          3,852         48
Patient self-pay                      756          9          1,727         22
HMO's                                 613          7            460          6
                                   ------        ---         ------        ---
Total                              $8,960        100%        $8,007        100%
                                   ======        ===         ======        ===

                                       24
<PAGE>


Net revenues                       Six months ended          Six months ended
                                   January 31, 2007          January 31, 2006
                                 --------------------      ---------------------
Revenue category                 (In 000's)    (in %)      (In 000's)     (in %)
----------------                 ----------    ------      ----------     ------
Medicare                            $3,962         23         $3,803         24
Third party carriers                10,595         63          8,565         53
Patient self-pay                     1,388          8          2,730         17
HMO's                                1,069          6            928          6
                                    ------        ---         ------        ---
Total                               $17,014       100%        $16,026       100%
                                    ======        ===         ======        ===

The Company provides services to certain patients covered by various third-party
payers,  including the Federal  Medicare  program.  Revenue,  net of contractual
adjustments,  from gross billings under the Federal  Medicare program during the
three and six months ended January 31, 2007 and 2006 were  approximately 22% and
24%, and 23% and 24%, 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.

CONTRACTUAL ADJUSTMENTS
-----------------------

The  Company's  estimate  of  contractual  adjustments  is based on  significant
assumptions and judgments,  such as its interpretation of the applicable payer's
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.   The  Company   adjusts   the   contractual   adjustment   estimate
periodically,  based on its evaluation of historical  settlement experience with
payers, industry reimbursement trends, and other relevant factors.

During the three and six months ended January 31, 2007 and 2006, the contractual
adjustment  percentages,   determined  using  average  historical  reimbursement
statistics,  were  77.6% and 74.3% and 77.3% and 74.7%,  respectively,  of gross
billings.  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  laboratory  services revenues of approximately  $749,000 for
the six months ended  January 31, 2007,  and could have  resulted in a change in
the net accounts receivable of approximately $245,000 as of January 31, 2007.

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.

For the  clinical  laboratory  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.

                                       25
<PAGE>


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, 2007
and 2006,  the Company  determined an allowance for doubtful  accounts less than
210 days and wrote off 100% of accounts  receivable  (for all  payers)  over 210
days, as it assumed those accounts are  uncollectible.  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.

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, 2007 and
July 31,  2006,  approximately  88% of the  Company's  net  accounts  receivable
relates to its clinical laboratory business,  which operates in the New York and
New Jersey Metropolitan area.

Net accounts receivable                 As of                      As of
                                   January 31, 2007            July 31, 2006
                                 --------------------      ---------------------
Billing category                 (In 000's)    (in %)      (In 000's)     (in %)
----------------                 ----------    ------      ----------     ------
Clinical laboratory
  Medicare                          $1,573         17         $1,367         15
  Third party carriers               4,883         54          4,025         44
  Patient self-pay                   2,008         22          3,294         36
  HMO's                                586          6            475          5
                                   -------        ---        -------        ---
Total Clinical laboratory            9,050        100%         9,161        100%
                                                              ======        ===
Total Life Sciences                  1,199                     1,286
                                   -------                   -------
Total accounts receivable          $10,249                   $10,447
                                   =======                   =======

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.

                                       26
<PAGE>


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, 2007 and
July 31, 2006,  respectively,  the reserve for excess and obsolete inventory was
$57,000 and $238,000.

Recent Accounting Pronouncements

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections  ("SFAS  154"),  a  replacement  of APB Opinion  No. 20,  Accounting
Changes,  and FASB  Statement  No. 3,  Reporting  Accounting  Changes in Interim
Financial Statements".  SFAS 154 changes the requirements for the accounting for
and reporting of a change in accounting  principle.  Previously,  most voluntary
changes in accounting  principles  required  recognition via a cumulative effect
adjustment  within net income for the period of the  change.  SFAS 154  requires
retrospective  application to prior periods' financial statements,  unless it is
impracticable to determine either the period-specific  effects or the cumulative
effect of the change.

SFAS 154 is effective  for  accounting  changes  made in fiscal years  beginning
after  December  15,  2005;  however,  SFAS 154 does not change  the  transition
provisions of any existing accounting  pronouncements.  The adoption of SFAS 154
did not have a material impact on the Company's  financial  condition or results
of operations.

In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an  interpretation  of FASB Statement No. 109,
Accounting  for Income  Taxes"  ("SFAS  109")",  to clarify the  accounting  for
uncertainty in income taxes recognized in an enterprise's  financial  statements
in  accordance  with SFAS 109.  This  Interpretation  prescribes  a  recognition
threshold and measurement  attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN
48  also  provides  guidance  on  derecognition,  classification,  interest  and
penalties,  accounting  in interim  periods,  disclosure,  and  transition.  The
provisions of FIN 48 are effective for fiscal years beginning after December 15,
2006.  The  Company  has not  evaluated  the  impact of FIN 48 on its  financial
statements at this time.

In  September  2006,  the  SEC  released  Staff  Accounting   Bulletin  No.  108
"Considering   the  Effects  of  Prior  Year   Misstatements   When  Quantifying
Misstatements  in  Current  Year  Financial  Statements"  ("SAB  108").  SAB 108
provides  interpretative  guidance on how public  companies  quantify  financial
statement misstatements.  There have been two common approaches used to quantify
such errors.  Under an income statement  approach,  the "roll-over"  method, the
error is quantified as the amount by which the current year income  statement is
misstated.  Alternatively,  under a balance sheet  approach,  the "iron curtain"
method,  the error is quantified as the  cumulative  amount by which the current
year balance sheet is  misstated.  In SAB 108, the SEC  established  an approach
that requires  quantification of financial statement  misstatements based on the
effects of the misstatements on each of the company's  financial  statements and
the related financial statement disclosures.  This model is commonly referred to
as a "dual approach" because it requires quantification of errors under both the
roll-over and iron curtain  methods.  SAB 108 is effective for the Company as of
August 1,  2007.  The  adoption  of SAB 108 is not  expected  to have a material
impact on the Company's consolidated financial statements.

                                       27
<PAGE>


In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". This
Statement  defines fair value,  establishes a framework for measuring fair value
and expands  disclosure  about fair value  measurements,  and is  effective  for
financial  statements issued for fiscal years beginning after November 15, 2007,
and  interim  periods  within  those  fiscal  years.  The  Company is  currently
evaluating  the effect  that the  adoption  of this  Statement  will have on its
financial statements at this time.

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 159").  This statement  permits  entities to choose to
measure many financial  instruments  and certain other items as fair value.  The
objective  is to improve  financial  reporting by  providing  entities  with the
opportunity  to mitigate  volatility  in reported  earnings  caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions. SFAS 159 is effective as of the beginning of fiscal years
that begin after  November 15, 2007.  The Company has not  evaluated  the effect
that the adoption of this  Statement  will have on its  financial  statements at
this time.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company  does not have an  exposure  to market risk from  changes in foreign
currency  exchange  rates,  commodity price risk or other market risk. We do not
engage in any hedging or market risk management tools. The Company does not have
interest risk with respect to interest rates on cash and cash  equivalents  that
could  impact  our  results  of  operations  and  financial  position  since the
investments are in highly liquid  corporate debt  instruments with maturities of
three months or less. There have been no material changes with respect to market
risk previously  disclosed in our Annual Report on Form 10-K for our 2006 fiscal
year.

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 Company's  most  recently  completed  interim  fiscal period that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings
         -----------------

There have been no material  developments  with respect to  previously  reported
legal proceedings  except as noted in Note 9. See the annual report on Form 10-K
for the fiscal year ended July 31, 2006 filed with the  Securities  and Exchange
Commission for a discussion of the Company's ongoing legal proceedings.

                                       28
<PAGE>


Item 1A. Risk Factors
         ------------

Risk and uncertainties  that, if they were to occur, could materially  adversely
affect our business or that could cause our actual results to differ  materially
from the results  contemplated by the  forward-looking  statements  contained in
this Report and other public  statements we make were set forth in the "Item 1A.
- Risk  Factors"  section of our  Annual  Report on Form 10-K for the year ended
July 31,  2006.  There  have  been no  material  changes  from the risk  factors
disclosed in that Form 10-K.

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

(a) The Annual Meeting of Shareholders was held on January 23, 2007.

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

(1) Shahram Rabbani and Irwin C. Gerson were nominated by management and elected
by the  shareholders to serve as Class I Directors until the 2010 Annual Meeting
of  Shareholders  or until  their  respective  successors  are elected and shall
qualify.

The shareholders  voted 27,356,311 and 26,892,987  shares in the affirmative for
Shahram  Rabbani and Irwin C. Gerson,  respectively,  and  withheld  386,949 and
850,273 shares for Shahram Rabbani and Irwin C. Gerson, respectively.

(2) The  shareholders  voted  27,604,956 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,  2007,  68,176  shares  against and 70,128  shares
abstained.

Item 6.  Exhibits
         --------

         Exhibit No.    Exhibit
         -----------    -------
         31(a)          Certification  of  Elazar  Rabbani,  Ph.D.  pursuant  to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

         31(b)          Certification of Barry Weiner pursuant to Section 302 of
                        the Sarbanes-Oxley Act of 2002.

         32(a)          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(b)          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 12, 2007                              by: /s/Barry Weiner
                                                      ---------------
                                                      Chief Financial Officer

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