|                                  
|----------------------------------
|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
 April 30, 2011                            
|                                                                           |                                                                                          
|or                                                                        
|                                                                           |                                                                                          
|o                                                                          | TRANSITION REPORT
 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                                           |                                                                                          
|For the transition period from ___________________ to
 ___________________
|Commission File Number 001-09974                                          
|                                                                           |                                                                                          
|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) |  |                    

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 xNoo

Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 45 of Regulation S-T (§232.405 of that
chapter) during the preceding 12 months (or such shorter period that the
registrant was required to submit and post such files).

Yes oNoo

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 o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o

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

Yes oNox

As of
June 1, 2011 the Registrant had approximately 38,589,100 shares of common
stock outstanding.

---



ENZO BIOCHEM, INC. 
FORM 10-Q 
April 30, 2011

INDEX

|                               |                                                                                                                                       |    |   
|------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------- | -- | --
|PART I - FINANCIAL INFORMATION
|                               |                                                                                                                                       |    |   
|Item 1.                        | Financial
 Statements                                                                                                                 |    |   
|                               |                                                                                                                                       |    |   
|                               | Consolidated
 Balance Sheets - April 30, 2011 (unaudited) and July 31, 2010 (audited)                                                 |    | 3 
|                               |                                                                                                                                       |    |   
|                               | Consolidated
 Statements of Operations for the three and nine months ended April 30, 2011
 and 2010 (unaudited)                       |    | 4 
|                               |                                                                                                                                       |    |   
|                               | Consolidated
 Statement of Stockholders Equity and Comprehensive (Loss) Income for the nine
 months ended April 30, 2011 (unaudited) |    | 5 
|                               |                                                                                                                                       |    |   
|                               | Consolidated
 Statements of Cash Flows for the nine months ended April 30, 2011 and 2010
 (unaudited)                                 |    | 6 
|                               |                                                                                                                                       |    |   
|                               | Notes to
 Consolidated Financial Statements                                                                                           |    | 7 
|                               |                                                                                                                                       |    |   
|Item 2.                        | Managements Discussion and Analysis of Financial Condition
 and Results of Operations                                                |    | 17
|                               |                                                                                                                                       |    |   
|Item 3.                        | Quantitative
 and Qualitative Disclosures About Market Risk                                                                           |    | 31
|                               |                                                                                                                                       |    |   
|Item 4.                        | Controls
 and Procedures                                                                                                              |    | 31
|                               |                                                                                                                                       |    |   
|Part II  OTHER INFORMATION   
|                               |                                                                                                                                       |    |   
|Item 1.                        | Legal
 Proceedings                                                                                                                    |    | 32
|                               |                                                                                                                                       |    |   
|Item 1A.                       | Risk
 Factors                                                                                                                         |    | 32
|                               |                                                                                                                                       |    |   
|Item 6.                        | Exhibits                                                                                                                              |    | 32
|                               |                                                                                                                                       |    |   
|Signatures                     |                                                                                                                                       | 32

2

---



Part 1Financial Information Item 1
Financial Statements

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

|                                                                                                                                          |  |                              |          |                           |   |          |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | -------- | ------------------------- | - | -------- | -
|                                                                                                                                          |  | April 30,
 2011
 (unaudited) |          | July 31,
 2010
 (audited) |  
|                                                                                                                                          |  |                              |          |                           |  
|ASSETS                                                                                                                                    |  |                              |          |                           |   |          |  
|Current assets:                                                                                                                           |  |                              |          |                           |   |          |  
|Cash and cash equivalents                                                                                                                 |  | $                            | 9,709    |                           | $ | 8,759    |  
|Short term investments                                                                                                                    |  |                              | 17,808   |                           |   | 24,807   |  
|Accounts receivable, net of allowances                                                                                                    |  |                              | 13,770   |                           |   | 13,006   |  
|Inventories                                                                                                                               |  |                              | 9,697    |                           |   | 8,882    |  
|Prepaid expenses                                                                                                                          |  |                              | 2,082    |                           |   | 2,284    |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|Total current assets                                                                                                                      |  |                              | 53,066   |                           |   | 57,738   |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|Property, plant and equipment, net                                                                                                        |  |                              | 10,908   |                           |   | 11,858   |  
|Goodwill                                                                                                                                  |  |                              | 25,819   |                           |   | 24,943   |  
|Intangible assets, net                                                                                                                    |  |                              | 20,040   |                           |   | 20,368   |  
|Other                                                                                                                                     |  |                              | 442      |                           |   | 338      |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|Total assets                                                                                                                              |  | $                            | 110,275  |                           | $ | 115,245  |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                      |  |                              |          |                           |   |          |  
|Current liabilities:                                                                                                                      |  |                              |          |                           |   |          |  
|Accounts payable  trade                                                                                                                  |  | $                            | 7,150    |                           | $ | 6,455    |  
|Accrued liabilities                                                                                                                       |  |                              | 8,105    |                           |   | 8,509    |  
|Other current liabilities                                                                                                                 |  |                              | 557      |                           |   | 572      |  
|Deferred taxes                                                                                                                            |  |                              | 53       |                           |   | 21       |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|Total current liabilities                                                                                                                 |  |                              | 15,865   |                           |   | 15,557   |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|Deferred taxes                                                                                                                            |  |                              | 2,672    |                           |   | 2,582    |  
|Other                                                                                                                                     |  |                              | 91       |                           |   | 90       |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|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: 39,034,441 at April 30, 2011 and 38,782,725
 at July 31, 2010 |  |                              | 390      |                           |   | 388      |  
|Additional paid-in capital                                                                                                                |  |                              | 305,654  |                           |   | 306,561  |  
|Less treasury stock at cost: 450,014 shares
 at April 30, 2011 and 623,848 shares at July 31, 2010                                        |  |                              | (6,387   | )                         |   | (8,854   | )
|Accumulated deficit                                                                                                                       |  |                              | (210,891 | )                         |   | (201,954 | )
|Accumulated other comprehensive income                                                                                                    |  |                              | 2,881    |                           |   | 875      |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|Total stockholders equity                                                                                                                |  |                              | 91,647   |                           |   | 97,016   |  
|                                                                                                                                          |  |                              |          |                           |   |          |  
|Total liabilities and stockholders equity                                                                                                |  | $                            | 110,275  |                           | $ | 115,245  |  
|                                                                                                                                          |  |                              |          |                           |   |          |  

The accompanying notes are an integral part
of these consolidated financial statements.

3

---



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

|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|------------------------------------------------ |  | ------------------------------ | ------ | ------------------------------ | - | ------ | - | ---- | ------ | - | - | ------- | -
|                                                 |  | Three
 Months Ended
 April 30, |        | Nine
 Months Ended 
 April 30, |  
|                                                 |  | 2011                           |        | 2010                           |   | 2011   |   | 2010 |       
|                                                 |  |                                |        |                                |   |        |   |      |       
|Revenues:                                        |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Product revenues                                 |  | $                              | 10,935 |                                | $ | 11,089 |   | $    | 31,356 |   | $ | 32,599  |  
|Royalty and license fee income                   |  |                                | 1,083  |                                |   | 1,894  |   |      | 5,380  |   |   | 7,044   |  
|Clinical laboratory services                     |  |                                | 13,809 |                                |   | 10,805 |   |      | 38,477 |   |   | 32,494  |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Total revenues                                   |  |                                | 25,827 |                                |   | 23,788 |   |      | 75,213 |   |   | 72,137  |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Operating expenses:                              |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Cost of product revenues                         |  |                                | 5,195  |                                |   | 5,394  |   |      | 15,708 |   |   | 15,771  |  
|Cost of clinical laboratory services             |  |                                | 8,268  |                                |   | 7,863  |   |      | 23,333 |   |   | 21,623  |  
|Research and development                         |  |                                | 2,053  |                                |   | 2,479  |   |      | 5,831  |   |   | 7,273   |  
|Selling, general, and administrative             |  |                                | 10,877 |                                |   | 11,795 |   |      | 33,450 |   |   | 36,841  |  
|Provision for uncollectible accounts
 receivable |  |                                | 1,005  |                                |   | 650    |   |      | 3,037  |   |   | 2,073   |  
|Legal                                            |  |                                | 695    |                                |   | (127   | ) |      | 2,767  |   |   | 1,030   |  
|Litigation settlement and related legal
 costs   |  |                                |       |                                |   |       |   |      |       |   |   | 3,698   |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Total operating expenses                         |  |                                | 28,093 |                                |   | 28,054 |   |      | 84,126 |   |   | 88,309  |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Operating loss                                   |  |                                | (2,266 | )                              |   | (4,266 | ) |      | (8,913 | ) |   | (16,172 | )
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Other income (expense):                          |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Interest income                                  |  |                                | 2      |                                |   | 3      |   |      | 10     |   |   | 13      |  
|Other                                            |  |                                | 71     |                                |   | 20     |   |      | 147    |   |   | 6       |  
|Foreign currency gain (loss)                     |  |                                | 191    |                                |   | (156   | ) |      | 135    |   |   | (351    | )
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Loss before income taxes                         |  |                                | (2,002 | )                              |   | (4,399 | ) |      | (8,621 | ) |   | (16,504 | )
|Provision for income taxes                       |  |                                | 108    |                                |   | 177    |   |      | 316    |   |   | 216     |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Net loss                                         |  | $                              | (2,110 | )                              | $ | (4,576 | ) | $    | (8,937 | ) | $ | (16,720 | )
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Net loss per common share:                       |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Basic and Diluted                                |  | $                              | (0.05  | )                              | $ | (0.12  | ) | $    | (0.23  | ) | $ | (0.44   | )
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Weighted average common shares outstanding:      |  |                                |        |                                |   |        |   |      |        |   |   |         |  
|Basic and Diluted                                |  |                                | 38,478 |                                |   | 38,095 |   |      | 38,279 |   |   | 37,950  |  
|                                                 |  |                                |        |                                |   |        |   |      |        |   |   |         |  

The accompanying notes are an integral part
of these consolidated financial statements.

4

---



ENZO
BIOCHEM, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
AND COMPREHENSIVE (LOSS) INCOME
Nine months ended April 30, 2011 
(UNAUDITED) 
(In thousands, except share data)

|                                                          |  |                   |            |                     |  |                       |   |                              |     |                         |   |                      |   |                                           |        |                              |   |                              |   |   |       |  |   |        |   |   |        |  
|--------------------------------------------------------- |  | ----------------- | ---------- | ------------------- |  | --------------------- | - | ---------------------------- | --- | ----------------------- | - | -------------------- | - | ----------------------------------------- | ------ | ---------------------------- | - | ---------------------------- | - | - | ----- |  | - | ------ | - | - | ------ | -
|                                                          |  | CommonStockShares |            | TreasuryStockShares |  | Common
 Stock
 Amount |   | Additional
 Paid-in
 Capital |     | Treasury
 Stock
 Amount |   | Accumulated
 Deficit |   | Accumulated
 Other
 Comprehensive
 Income |        | Total
 Stockholders
 Equity |   | Comprehensive
 (Loss) Income |  
|                                                          |  |                   |            |                     |  |                       |   |                              |     |                         |   |                      |   |                                           |        |                              |   |                              |  
|Balance at July 31, 2010                                  |  |                   | 38,782,725 |                     |  | 623,848               |   | $                            | 388 |                         | $ | 306,561              |   | $                                         | (8,854 | )                            | $ | (201,954                     | ) | $ | 875   |  | $ | 97,016 |   |   |        |  
|Net loss for the period ended April 30, 2011              |  |                   |           |                     |  |                      |   |                              |    |                         |   |                     |   |                                           |       |                              |   | (8,937                       | ) |   |      |  |   | (8,937 | ) | $ | (8,937 | )
|Vesting of restricted stock                               |  |                   | 251,716    |                     |  |                      |   |                              | 2   |                         |   |                     |   |                                           |       |                              |   |                             |   |   |      |  |   | 2      |   |   |       |  
|Stock based compensation charges                          |  |                   |           |                     |  |                      |   |                              |    |                         |   | 870                  |   |                                           |       |                              |   |                             |   |   |      |  |   | 870    |   |   |       |  
|Issuance of treasury stock for employee 401(k) plan match |  |                   |           |                     |  | (173,834              | ) |                              |    |                         |   | (1,777               | ) |                                           | 2,467  |                              |   |                             |   |   |      |  |   | 690    |   |   |       |  
|Foreign currency translation adjustments                  |  |                   |           |                     |  |                      |   |                              |    |                         |   |                     |   |                                           |       |                              |   |                             |   |   | 2,006 |  |   | 2,006  |   |   | 2,006  |  
|                                                          |  |                   |            |                     |  |                       |   |                              |     |                         |   |                      |   |                                           |        |                              |   |                              |   |   |       |  |   |        |   |   |        |  
|Comprehensive loss                                        |  |                   |            |                     |  |                       |   |                              |     |                         |   |                      |   |                                           |        |                              |   |                              |   |   |       |  |   |        |   | $ | (6,931 | )
|                                                          |  |                   |            |                     |  |                       |   |                              |     |                         |   |                      |   |                                           |        |                              |   |                              |   |   |       |  |   |        |   |   |        |  
|                                                          |  |                   |            |                     |  |                       |   |                              |     |                         |   |                      |   |                                           |        |                              |   |                              |   |   |       |  |   |        |   |   |        |  
|Balance at April 30, 2011                                 |  |                   | 39,034,441 |                     |  | 450,014               |   | $                            | 390 |                         | $ | 305,654              |   | $                                         | (6,387 | )                            | $ | (210,891                     | ) | $ | 2,881 |  | $ | 91,647 |   |   |        |  
|                                                          |  |                   |            |                     |  |                       |   |                              |     |                         |   |                      |   |                                           |        |                              |   |                              |   |   |       |  |   |        |   |   |        |  

The accompanying notes are an integral part
of these consolidated financial statements.

5

---



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

|                                                                             |  |                              |          |      |   |          |  
|---------------------------------------------------------------------------- |  | ---------------------------- | -------- | ---- | - | -------- | -
|                                                                             |  | Nine Months Ended
 April 30, |         
|                                                                             |  | 2011                         |          | 2010 |  
|                                                                             |  |                              |          |      |  
|Cash flows from operating activities:                                        |  |                              |          |      |   |          |  
|Net loss                                                                     |  | $                            | (8,937   | )    | $ | (16,720  | )
|Adjustments to reconcile net loss to net
 cash used in operating activities: |  |                              |          |      |   |          |  
|Depreciation and amortization of property,
 plant and equipment              |  |                              | 2,133    |      |   | 2,050    |  
|Amortization of intangible assets                                            |  |                              | 1,138    |      |   | 1,174    |  
|Provision for uncollectible accounts
 receivable                             |  |                              | 3,037    |      |   | 2,073    |  
|Provision for excess or
 obsolete inventory                                  |  |                              | 308      |      |   |         |  
|Deferred income tax benefit                                                  |  |                              | (126     | )    |   | (136     | )
|Share based compensation charges                                             |  |                              | 870      |      |   | 851      |  
|Share based 401(k) employer match expense                                    |  |                              | 500      |      |   | 923      |  
|Deferred revenue recognized                                                  |  |                              | (38      | )    |   | (337     | )
|Foreign currency (gain) loss on
 intercompany loan                           |  |                              | (183     | )    |   | 237      |  
|                                                                             |  |                              |          |      |   |          |  
|Changes in operating assets and liabilities:                                 |  |                              |          |      |   |          |  
|Accounts receivable                                                          |  |                              | (3,697   | )    |   | (1,574   | )
|Inventories                                                                  |  |                              | (968     | )    |   | (807     | )
|Prepaid expenses                                                             |  |                              | 215      |      |   | 388      |  
|Accounts payable  trade                                                     |  |                              | 736      |      |   | 336      |  
|Accrued liabilities                                                          |  |                              | (178     | )    |   | (1,985   | )
|Other current liabilities                                                    |  |                              | 23       |      |   | 286      |  
|Other liabilities                                                            |  |                              | 1        |      |   |         |  
|                                                                             |  |                              |          |      |   |          |  
|Total adjustments                                                            |  |                              | 3,771    |      |   | 3,479    |  
|                                                                             |  |                              |          |      |   |          |  
|Net cash used in operating activities                                        |  |                              | (5,166   | )    |   | (13,241  | )
|                                                                             |  |                              |          |      |   |          |  
|                                                                             |  |                              |          |      |   |          |  
|Cash flows from investing activities:                                        |  |                              |          |      |   |          |  
|Purchases of short term investments                                          |  |                              | (136,837 | )    |   | (177,028 | )
|Maturities of short term investments                                         |  |                              | 143,836  |      |   | 194,529  |  
|Capital expenditures                                                         |  |                              | (1,021   | )    |   | (2,569   | )
|(Increase) decrease in security deposits
 and other                          |  |                              | (105     | )    |   | 25       |  
|                                                                             |  |                              |          |      |   |          |  
|Net cash provided by investing activities                                    |  |                              | 5,873    |      |   | 14,957   |  
|                                                                             |  |                              |          |      |   |          |  
|                                                                             |  |                              |          |      |   |          |  
|Effect of exchange rate changes on cash and
 cash equivalents                |  |                              | 243      |      |   | (48      | )
|                                                                             |  |                              |          |      |   |          |  
|                                                                             |  |                              |          |      |   |          |  
|Increase in cash and cash equivalents                                        |  |                              | 950      |      |   | 1,668    |  
|Cash and cash equivalents - beginning of
 period                             |  |                              | 8,759    |      |   | 6,929    |  
|                                                                             |  |                              |          |      |   |          |  
|Cash and cash equivalents - end of period                                    |  | $                            | 9,709    |      | $ | 8,597    |  
|                                                                             |  |                              |          |      |   |          |  

The accompanying notes are an integral part
of these consolidated financial statements.

6

---



ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of April 30, 2011
and for the three and nine months ended 
April 30, 2011 and 2010 
(Unaudited)
(in thousands, except share data)

Note 1  Basis of Presentation

The accompanying consolidated financial statements include the accounts
of Enzo Biochem, Inc. and its wholly-owned subsidiaries, Enzo Life Sciences,
Enzo Clinical Labs, Enzo Therapeutics and Enzo Realty LLC, collectively
referred to as the Company or Companies. The consolidated balance sheet as
of April 30, 2011, the consolidated statement of stockholders equity and
comprehensive (loss) income for the nine months ended April 30, 2011, the
consolidated statements of cash flows for the nine months ended April 30, 2011
and 2010, and the consolidated statements of operations for the three and nine
months ended April 30, 2011 and 2010, are unaudited. In the opinion of
management, all adjustments (which include normal recurring adjustments)
necessary to present fairly the financial position and operating results for
the interim periods have been made. Certain information and footnote
disclosure, normally included in annual financial statements prepared in
accordance with accounting principles generally accepted in the United States,
have been condensed or omitted. The consolidated financial statements should be
read in conjunction with the consolidated financial statements for the year
ended July 31, 2010 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, 2010 has been derived from the audited
financial statements at that date. The results of operations for the three and
nine months ended April 30, 2011 are not necessarily indicative of the results
that may be expected for the fiscal year ending July 31, 2011.

Recent Accounting Pronouncements

In October 2009, the FASB issued a Consensus of the FASB Emerging
Issues Task Force relating to Multiple Deliverable Revenue Arrangements.This standard provides application
guidance on whether multiple deliverables exist, how the deliverables should be
separated and how the consideration should be allocated to one or more units of
accounting. This update establishes a selling price hierarchy for determining
the selling price of a deliverable. The selling price used for each deliverable
will be based on vendor-specific objective evidence, if available, third-party
evidence if vendor-specific objective evidence is not available, or estimated selling
price if neither vendor-specific or third-party evidence is available. This
guidance is effective for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010. The Company
adopted this guidance effective August 1, 2010 which did not have an effect on
its consolidated results of operations and financial condition.

Reclassifications

Certain amounts in prior year period have been reclassified to conform
to current year presentation. For the third quarter ended April 30, 2010, the
Company reclassified approximately $275 of payroll related expenses previously
included in selling, general and administrative expense to cost of clinical
laboratory services.

Note 2  Short-term Investments

At April 30, 2011 and July 31, 2010, the Companys short-term
investments, whose fair value approximates cost, are in U.S. Treasury bills,
which are purchased at discounts with remaining maturities of under ninety
days.

The authoritative guidance for fair value measurements establishes a
fair value hierarchy that prioritizes the inputs to valuation techniques used
to measure fair value. The hierarchy gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (level 1
measurements) and the lowest priority to unobservable inputs (level 3
measurements). The three levels of the fair value hierarchy under the guidance
are described below:

| |           |                                                                                                                                                                                                                                                                   
| | --------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Level
 1: | Valuations based on
 quoted market prices in active markets for identical assets or liabilities.                                                                                                                                                                  
| |           |                                                                                                                                                                                                                                                                   
| | Level2:   | Valuations based
 on quoted prices for similar assets or liabilities, quoted prices in markets
 that are not active, or other inputs that are observable or can be
 corroborated by observable data for substantially the full term of the assets
 or liabilities.

7

---



| |         |                                                                                                                                                         
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------
| | Level3: | Valuations based
 on inputs that are supported by little or no market activity and that are
 significant to the fair value of the assets or liabilities.

At April 30, 2011 and July 31, 2010 the Companys short-term
investments are classified as Level 1 assets.

Note 3  Net income (loss) per share

Basic net income (loss) per share represents net income (loss) divided
by the weighted average number of common shares outstanding during the period.
The dilutive effect of potential common shares, consisting of outstanding stock
options and unvested restricted stock, is determined using the treasury stock
method. Diluted weighted average shares outstanding for the three and nine
months ended April 30, 2011 and 2010 do not include the potential common shares
from stock options and unvested restricted stock because to do so would have
been antidilutive. Accordingly, basic and diluted net loss per share is the
same during these periods.

For the three and nine months ended April 30, 2011 and 2010, there were no potential net shares excluded from the computation
of diluted net loss per share from exercise of in the money stock options or from restricted stock awards.

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
 April 30, |         | Nine months ended
 April 30, | 
|                                                        |  | 2011                          |         | 2010                         |  | 2011      |  | 2010 |        
|                                                        |  |                               |         |                              |  |           |  |      |        
|Out of the money employee and director
 stock options |  |                               | 839,814 |                              |  | 1,132,400 |  |      | 996,851 |  |  | 1,163,400 | 
|                                                        |  |                               |         |                              |  |           |  |      |         |  |  |           | 

Note 4  Share-based compensation

The following table sets forth the amount of expense related to
share-based payment arrangements included in specific line items in the
accompanying statements of operations:

|                                     |  |                               |     |                              |   |      |  |      |     |  |   |     | 
|------------------------------------ |  | ----------------------------- | --- | ---------------------------- | - | ---- |  | ---- | --- |  | - | --- | 
|                                     |  | Three months ended
 April 30, |     | Nine months ended
 April 30, |  
|                                     |  | 2011                          |     | 2010                         |   | 2011 |  | 2010 |    
|                                     |  |                               |     |                              |   |      |  |      |    
|Cost of clinical laboratory services |  | $                             | 2   |                              | $ | 3    |  | $    | 8   |  | $ | 9   | 
|Research and development             |  |                               | 6   |                              |   | 4    |  |      | 16  |  |   | 10  | 
|Selling, general and administrative  |  |                               | 216 |                              |   | 264  |  |      | 846 |  |   | 832 | 
|                                     |  |                               |     |                              |   |      |  |      |     |  |   |     | 
|                                     |  | $                             | 224 |                              | $ | 271  |  | $    | 870 |  | $ | 851 | 
|                                     |  |                               |     |                              |   |      |  |      |     |  |   |     | 

No excess tax benefits were recognized during the nine month periods
ended April 30, 2011 and 2010.

Stock option plans

A summary of the activity relating to the Companys stock option plans
for the nine month period ended April 30, 2011 is as follows:

|                                              |  |         |           |                                   |   |                            |  |   |   | 
|--------------------------------------------- |  | ------- | --------- | --------------------------------- | - | -------------------------- |  | - | - | 
|                                              |  | Options |           | Weighted
 Average
 Exercise Price |   | Aggregate
 Intrinsic Value | 
|                                              |  |         |           |                                   |   |                            | 
|Outstanding at
 August 1, 2010                |  |         | 1,132,450 |                                   | $ | 14.30                      |  | $ |  | 
|                                              |  |         |           |                                   |   |                            |  |   |   | 
|Exercised                                     |  |         |          |                                   |   |                           |  |   |   | 
|Cancelled                                     |  |         | (292,636  | )                                 | $ | 12.69                      |  |   |   | 
|                                              |  |         |           |                                   |   |                            |  |   |   | 
|Outstanding and
 exercisable at end of period |  |         | 839,814   |                                   | $ | 14.86                      |  | $ |  | 
|                                              |  |         |           |                                   |   |                            |  |   |   | 

As of April 30, 2011, there was no unrecognized compensation cost
related to unvested stock option-based compensation.

8

---



Restricted Stock Awards

A summary of the activity pursuant to the Companys restricted stock
awards for the nine months ended April 30, 2011 is as follows:

|                            |  |        |          |                                |   |      | 
|--------------------------- |  | ------ | -------- | ------------------------------ | - | ---- | 
|                            |  | Awards |          | Weighted
 Average
 Award Price |  
|                            |  |        |          |                                |  
|Unvested at August
 1, 2010 |  |        | 417,578  |                                | $ | 5.50 | 
|Awarded                     |  |        | 4,000    |                                | $ | 4.43 | 
|Vested                      |  |        | (251,716 | )                              | $ | 5.02 | 
|Forfeited                   |  |        | (5,950   | )                              | $ | 7.27 | 
|                            |  |        |          |                                |   |      | 
|Unvested at end of
 period  |  |        | 163,912  |                                | $ | 6.15 | 
|                            |  |        |          |                                |   |      | 

The fair value of a restricted stock award is determined based on the
closing stock price on the award date. As of April 30, 2011, there was
approximately $0.8 million of unrecognized compensation cost related to
unvested restricted stock-based compensation to be recognized over a weighted
average remaining period of one year.

On January 14, 2011, the Companys stockholders approved the adoption
of the 2011 Incentive Plan (the 2011 Plan) which provides for the issuance of
equity awards, including among others, options, restricted stock and restricted
stock units for up to 3,000,000 Common Shares. No additional awards may be
granted under the 1999 or 2005 Plans. The exercise price of options granted
under the 2011 Plan, and consistent with other Plans, is equal to or greater
than fair market value of the Common Stock on the date of grant. Unless
terminated earlier by the Board of Directors the 2011 Plan will terminate at
the earliest of; (a) such time as no shares of Common Stock remain available
for issuance under the 2011 Plan or (b) tenth anniversary of the effective date
of the 2011 Plan. Awards outstanding upon expiration of the 2011 Plan shall
remain in effect until they have been exercised, terminated, or have expired.

The total number of shares available for grant as equity awards under
the 2011 Plan is 2,996,000 as of April 30, 2011.

Note 5  Supplemental disclosure for statement of cash flows

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

|                 |  |                              |     |      |   |     | 
|---------------- |  | ---------------------------- | --- | ---- | - | --- | 
|                 |  | Nine months ended
 April 30, |    
|                 |  | 2011                         |     | 2010 |  
|                 |  |                              |     |      |  
|Taxes paid  net |  | $                            | 104 |      | $ | 162 | 
|                 |  |                              |     |      |   |     | 
|Interest paid    |  | $                            | 28  |      | $ | 25  | 
|                 |  |                              |     |      |   |     | 

Note 6  Comprehensive loss and Accumulated Other Comprehensive Income

During the three months ended April 30, 2011 and 2010, total
comprehensive loss was approximately $1.1 million and $4.4 million,
respectively. During the nine months ended April 30, 2011 and 2010, total
comprehensive loss was approximately $6.9 million and $16.3 million,
respectively. At April 30, 2011 and July 31, 2010, the accumulated other
comprehensive income relates to foreign currency translation adjustments.

Note 7- Inventories

Inventories consist of the following:

|                  |  |                 |       |                |   |       | 
|----------------- |  | --------------- | ----- | -------------- | - | ----- | 
|                  |  | April 30,
 2011 |       | July 31,
 2010 |  
|                  |  |                 |       |                |  
|Raw materials     |  | $               | 1,029 |                | $ | 921   | 
|Work in process   |  |                 | 2,540 |                |   | 2,136 | 
|Finished products |  |                 | 6,128 |                |   | 5,825 | 
|                  |  |                 |       |                |   |       | 
|                  |  | $               | 9,697 |                | $ | 8,882 | 
|                  |  |                 |       |                |   |       | 

9

---



Note 8  Goodwill and intangible assets

The Companys change in the net carrying amount of goodwill by business
segment is as follows:

|                              |  |                     |        |                      |   |       |  |   |        | 
|----------------------------- |  | ------------------- | ------ | -------------------- | - | ----- |  | - | ------ | 
|                              |  | Enzo Life
 Sciences |        | Enzo
 Clinical
 Labs |   | Total | 
|                              |  |                     |        |                      |   |       | 
|Balance August 1,
 2010       |  | $                   | 17,491 |                      | $ | 7,452 |  | $ | 24,943 | 
|Foreign currency
 translation |  |                     | 876    |                      |   |      |  |   | 876    | 
|                              |  |                     |        |                      |   |       |  |   |        | 
|Balance April 30,
 2011       |  | $                   | 18,367 |                      | $ | 7,452 |  | $ | 25,819 | 
|                              |  |                     |        |                      |   |       |  |   |        | 

Intangible assets, all of which are included in the Life Sciences
segment, consist of the following:

|                                      |  |                |        |                           |   |         |   |       |        |                           |   |        |  |   |         |   |   |        | 
|------------------------------------- |  | -------------- | ------ | ------------------------- | - | ------- | - | ----- | ------ | ------------------------- | - | ------ |  | - | ------- | - | - | ------ | 
|                                      |  | April 30, 2011 |        | July 31, 2010             |  
|                                      |  |                |        |                           |  
|                                      |  | Gross          |        | Accumulated
 Amortization |   | Net     |   | Gross |        | Accumulated
 Amortization |   | Net    | 
|                                      |  |                |        |                           |   |         |   |       |        |                           |   |        | 
|Finite-lived intangible assets:       |  |                |        |                           |   |         |   |       |        |                           |   |        |  |   |         |   |   |        | 
|Patents                               |  | $              | 11,027 |                           | $ | (10,246 | ) | $     | 781    |                           | $ | 11,027 |  | $ | (10,154 | ) | $ | 873    | 
|Customer relationships                |  |                | 12,603 |                           |   | (3,152  | ) |       | 9,451  |                           |   | 12,099 |  |   | (2,248  | ) |   | 9,851  | 
|Non-compete and employment agreements |  |                | 521    |                           |   | (512    | ) |       | 9      |                           |   | 478    |  |   | (396    | ) |   | 82     | 
|Website and acquired content          |  |                | 1,044  |                           |   | (688    | ) |       | 356    |                           |   | 1,009  |  |   | (489    | ) |   | 520    | 
|Licensed technology and other         |  |                | 655    |                           |   | (332    | ) |       | 323    |                           |   | 628    |  |   | (285    | ) |   | 343    | 
|Indefinitely-lived intangible assets: |  |                |        |                           |   |         |   |       |        |                           |   |        |  |   |         |   |   |        | 
|Trademarks                            |  |                | 9,120  |                           |   |        |   |       | 9,120  |                           |   | 8,699  |  |   |        |   |   | 8,699  | 
|                                      |  |                |        |                           |   |         |   |       |        |                           |   |        |  |   |         |   |   |        | 
|Total                                 |  | $              | 34,970 |                           | $ | (14,930 | ) | $     | 20,040 |                           | $ | 33,940 |  | $ | (13,572 | ) | $ | 20,368 | 
|                                      |  |                |        |                           |   |         |   |       |        |                           |   |        |  |   |         |   |   |        | 

At April 30, 2011, the weighted average useful life of finite-lived
intangible assets was approximately eight years.

For financial reporting purposes, useful lives for intangibles acquired
in the Life Sciences acquisitions have been assigned as follows:

|                       |           
|---------------------- | ----------
|Customer relationships | 8-15 years
|Trademarks             | Indefinite
|Other intangibles      | 4-5 years 

Note 9  Accrued Liabilities and Other Current Liabilities

At April 30, 2011 and July 31, 2010, accrued liabilities consist of:

|                                    |  |                 |       |                |   |       | 
|----------------------------------- |  | --------------- | ----- | -------------- | - | ----- | 
|                                    |  | April 30,
 2011 |       | July 31,
 2010 |  
|                                    |  |                 |       |                |  
|Legal                               |  | $               | 970   |                | $ | 877   | 
|Payroll, benefits,
 and commissions |  |                 | 3,434 |                |   | 4,012 | 
|Professional fees                   |  |                 | 1,030 |                |   | 963   | 
|Research and
 development           |  |                 | 716   |                |   | 716   | 
|Other                               |  |                 | 1,955 |                |   | 1,941 | 
|                                    |  |                 |       |                |   |       | 
|                                    |  | $               | 8,105 |                | $ | 8,509 | 
|                                    |  |                 |       |                |   |       | 

At April 30, 2011 and July 31, 2010, other current liabilities consist
of:

|                 |  |                 |     |                |   |     | 
|---------------- |  | --------------- | --- | -------------- | - | --- | 
|                 |  | April 30,
 2011 |     | July 31,
 2010 |  
|                 |  |                 |     |                |  
|Deferred revenue |  | $               | 437 |                | $ | 496 | 
|Other            |  |                 | 120 |                |   | 76  | 
|                 |  |                 |     |                |   |     | 
|                 |  | $               | 557 |                | $ | 572 | 
|                 |  |                 |     |                |   |     | 

10

---



Note 10 - Income taxes

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

The Companys effective tax rate for the three months ended April 30,
2011 was 5.4% compared to 4.0% during the three months ended April 30, 2010.
The tax provision for the periods were based on state and local taxes, domestic
and foreign tax for tax deductible goodwill and indefinite lived intangibles,
and book to tax differences for inventory. The Companys effective tax rate for
the nine months ended April 30, 2011 was 3.7% compared to 1.3% during the nine
months ended April 30, 2010. The tax provision for the periods were based on
state and local taxes, domestic and foreign tax for tax deductible goodwill and
indefinite lived intangibles, and book to tax differences for inventory.

The Companys effective tax rate for both periods differed from the
expected net operating loss carryforward benefit at the U.S. federal statutory
rate of 34% primarily due to the inability to recognize such benefit. The
carryforward benefit cannot be recognized because of uncertainties relating to
future taxable income in terms of both its timing and its sufficiency, which
would enable the Company to realize the federal carryforward benefit.

The Company files a consolidated Federal income tax return. The Company
files combined returns with California and New York State and City for certain
subsidiaries. Other subsidiaries file separate state and foreign tax returns.
With few exceptions, the periods that remain subject to examination are fiscal
years ended July 31, 2008 through July 31, 2010.

The Companys policy is to recognize interest and penalties accrued on
any uncertain tax positions as a component of income tax expense. As of April
30, 2011, there is no liability related to unrecognized tax benefits.

Note 11  Royalty and licensing income

The Company has a license agreement with QIAGEN Gaithersburg Inc.
(Qiagen) that began in 2005, whereby the Company earns quarterly running
royalties on the net sales of Qiagen products subject to the license until the
expiration of the patent on April 24, 2018. During each of the three months
ended April 30, 2011 and 2010, the Company recorded royalty income under the
Agreement of approximately $1.1 million. During each of the nine months ended
April 30, 2011 and 2010, the Company recorded royalty income under the
Agreement of approximately $4.8 million.

In April 2007 Enzo Life Sciences, Inc. (Life Sciences) and Abbott
Molecular Inc. (Abbott) entered into an agreement, which is still in effect,
covering the supply of certain of Enzo Life Sciences products to Abbott for use
in their product line. The parties also entered into a limited non-exclusive
royalty bearing cross-licensing agreement (Licensing Agreement) for various
patents. The Licensing Agreement requires each party to pay royalties, as
defined through the lives of related non-expired patents. In connection with a
component of the Licensing Agreement, Abbott paid a one-time fee of $1.5
million relating to a fully paid-up license and sublicense, as defined. The
one-time fee was recognized as revenue through August 31, 2010 representing the
longest expected patent life of the related patents. Abbott has notified the
Company that they have made a final royalty payment because they are unaware of
any non-expired patents. The Company is presently reviewing its patent
portfolio and Abbotts position.The
Licensing Agreement between the parties remains in full force and effect and
the Company continues its commercialization efforts under the contract terms.

During the three months ended April 30, 2011, the Company recorded no
royalties or license fees under the Licensing Agreement. During the three
months ended April 30, 2010, the Company recorded approximately $0.8 million in
royalties and license fee income under the Licensing Agreement. During the nine
months ended April 30, 2011 and 2010, the Company recorded $0.5 and $2.2
million, respectively in royalties and license fees from the Licensing
Agreement. Royalty and licensing income is included in the Life Sciences
segment.

11

---



Note 12  Segment reporting

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

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

The following financial information represents the operating results of
the reportable segments of the Company:

Three months ended April 30, 2011

|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|----------------------------------------------- |  | ------------- | ------ | ------------- | - | ------------ | - | ----- | ---- | ------------ | - | ------ | - | - | ------ | -
|                                                |  | Life
Sciences |        | Clinical
Labs |   | Therapeutics |   | Other |      | Consolidated |  
|                                                |  |               |        |               |   |              |   |       |      |              |  
|Revenues:                                       |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Product revenues                                |  | $             | 10,935 |               |   |             |   |       |     |              |   |       |   | $ | 10,935 |  
|Royalty and license fee income                  |  |               | 1,083  |               |   |             |   |       |     |              |   |       |   |   | 1,083  |  
|Clinical laboratory services                    |  |               |       |               | $ | 13,809       |   |       |     |              |   |       |   |   | 13,809 |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               | 12,018 |               |   | 13,809       |   |       |     |              |   |       |   |   | 25,827 |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Operating expenses:                             |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Cost of product revenues                        |  |               | 5,195  |               |   |             |   |       |     |              |   |       |   |   | 5,195  |  
|Cost of clinical laboratory services            |  |               |       |               |   | 8,268        |   |       |     |              |   |       |   |   | 8,268  |  
|Research and development                        |  |               | 1,544  |               |   |             |   | $     | 509  |              |   |       |   |   | 2,053  |  
|Selling, general and administrative             |  |               | 4,280  |               |   | 4,526        |   |       |     |              | $ | 2,071  |   |   | 10,877 |  
|Provision for uncollectible accounts
receivable |  |               |       |               |   | 1,005        |   |       |     |              |   |       |   |   | 1,005  |  
|Legal                                           |  |               | 109    |               |   | 79           |   |       |     |              |   | 507    |   |   | 695    |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Total operating expenses                        |  |               | 11,128 |               |   | 13,878       |   |       | 509  |              |   | 2,578  |   |   | 28,093 |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Operating income (loss)                         |  |               | 890    |               |   | (69          | ) |       | (509 | )            |   | (2,578 | ) |   | (2,266 | )
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Other income (expense)                          |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Interest                                        |  |               | (1     | )             |   | (1           | ) |       |     |              |   | 4      |   |   | 2      |  
|Other                                           |  |               | (8     | )             |   | 7            |   |       |     |              |   | 72     |   |   | 71     |  
|Foreign exchange gain                           |  |               | 191    |               |   |             |   |       |     |              |   |       |   |   | 191    |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Income (loss) before income taxes               |  | $             | 1,072  |               | $ | (63          | ) | $     | (509 | )            | $ | (2,502 | ) | $ | (2,002 | )
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Depreciation and amortization included
above    |  | $             | 785    |               | $ | 256          |   | $     | 11   |              | $ | 32     |   | $ | 1,084  |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Share-based compensation included in above:     |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Cost of clinical laboratory services            |  |               |       |               | $ | 2            |   |       |     |              |   |       |   | $ | 2      |  
|Research and development                        |  | $             | 6      |               |   |             |   |       |     |              |   |       |   |   | 6      |  
|Selling, general and administrative             |  |               | 25     |               |   | 18           |   |       |     |              | $ | 173    |   |   | 216    |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Total                                           |  | $             | 31     |               | $ | 20           |   |       |     |              | $ | 173    |   | $ | 224    |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Capital expenditures                            |  | $             | 108    |               | $ | 340          |   |       |     |              | $ |       |   | $ | 448    |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  

12

---



Three months ended April 30, 2010

|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|----------------------------------------------- |  | ------------- | ------ | ------------- | - | ------------ | - | ----- | ---- | ------------ | - | ------ | - | - | ------ | -
|                                                |  | Life
Sciences |        | Clinical
Labs |   | Therapeutics |   | Other |      | Consolidated |  
|                                                |  |               |        |               |   |              |   |       |      |              |  
|Revenues:                                       |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Product revenues                                |  | $             | 11,089 |               |   |             |   |       |     |              |   |       |   | $ | 11,089 |  
|Royalty and license fee income                  |  |               | 1,894  |               |   |             |   |       |     |              |   |       |   |   | 1,894  |  
|Clinical laboratory services                    |  |               |       |               | $ | 10,805       |   |       |     |              |   |       |   |   | 10,805 |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               | 12,983 |               |   |             |   |       |     |              |   |       |   |   | 23,788 |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Operating expenses:                             |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Cost of product revenues                        |  |               | 5,394  |               |   |             |   |       |     |              |   |       |   |   | 5,394  |  
|Cost of clinical laboratory services            |  |               |       |               |   | 7,863        |   |       |     |              |   |       |   |   | 7,863  |  
|Research and development                        |  |               | 1,858  |               |   |              |   | $     | 621  |              |   |       |   |   | 2,479  |  
|Selling, general and administrative             |  |               | 5,028  |               |   | 4,446        |   |       |     |              | $ | 2,321  |   |   | 11,795 |  
|Provision for uncollectible accounts
receivable |  |               |       |               |   | 650          |   |       |     |              |   |       |   |   | 650    |  
|Legal                                           |  |               | 21     |               |   | 80           |   |       |     |              |   | (228   | ) |   | (127   | )
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Total operating expenses                        |  |               | 12,301 |               |   | 13,039       |   |       | 621  |              |   | 2,093  |   |   | 28,054 |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Operating income (loss)                         |  |               | 682    |               |   | (2,234       | ) |       | (621 | )            |   | (2,093 | ) |   | (4,266 | )
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Other income (expense)                          |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Interest                                        |  |               | (2     | )             |   |             |   |       |     |              |   | 5      |   |   | 3      |  
|Other                                           |  |               | 13     |               |   | 7            |   |       |     |              |   |       |   |   | 20     |  
|Foreign exchange loss                           |  |               | (156   | )             |   |             |   |       |     |              |   |       |   |   | (156   | )
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Income (loss) before income taxes               |  | $             | 537    |               | $ | (2,227       | ) | $     | (621 | )            | $ | (2,088 | ) | $ | (4,399 | )
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Depreciation and amortization included
above    |  | $             | 744    |               | $ | 249          |   | $     | 12   |              | $ | 33     |   | $ | 1,038  |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Share-based compensation included in above:     |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Cost of clinical laboratory services            |  | $             |       |               |   | 3            |   |       |     |              |   |       |   | $ | 3      |  
|Research and development                        |  |               | 4      |               | $ |             |   |       |     |              |   |       |   |   | 4      |  
|Selling, general and administrative and
legal   |  |               | 16     |               |   | 21           |   | $     |     |              | $ | 227    |   |   | 264    |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Total                                           |  | $             | 20     |               |   | 24           |   | $     |     |              | $ | 227    |   | $ | 271    |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  
|Capital expenditures                            |  | $             | 257    |               | $ | 268          |   | $     |     |              | $ |        |   | $ | 525    |  
|                                                |  |               |        |               |   |              |   |       |      |              |   |        |   |   |        |  

13

---



Nine months ended April 30, 2011

|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|----------------------------------------------- |  | ------------- | ------ | ------------- | - | ------------ | - | ----- | ------ | ------------ | - | ------ | - | - | ------ | -
|                                                |  | Life
Sciences |        | Clinical
Labs |   | Therapeutics |   | Other |        | Consolidated |  
|                                                |  |               |        |               |   |              |   |       |        |              |  
|Revenues:                                       |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Product revenues                                |  | $             | 31,356 |               |   |             |   |       |       |              |   |       |   | $ | 31,356 |  
|Royalty and license fee income                  |  |               | 5,380  |               |   |             |   |       |       |              |   |       |   |   | 5,380  |  
|Clinical laboratory services                    |  |               |       |               | $ | 38,477       |   |       |       |              |   |       |   |   | 38,477 |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|                                                |  |               | 36,736 |               |   | 38,477       |   |       |       |              |   |       |   |   | 75,213 |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Operating expenses:                             |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Cost of product revenues                        |  |               | 15,708 |               |   |             |   |       |       |              |   |       |   |   | 15,708 |  
|Cost of clinical laboratory services            |  |               |       |               |   | 23,333       |   |       |       |              |   |       |   |   | 23,333 |  
|Research and development                        |  |               | 4,301  |               |   |             |   | $     | 1,530  |              |   |       |   |   | 5,831  |  
|Selling, general and administrative             |  |               | 12,833 |               |   | 13,618       |   |       |       |              | $ | 6,999  |   |   | 33,450 |  
|Provision for uncollectible accounts
receivable |  |               |       |               |   | 3,037        |   |       |       |              |   |       |   |   | 3,037  |  
|Legal                                           |  |               | 303    |               |   | 241          |   |       |       |              |   | 2,223  |   |   | 2,767  |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Total operating expenses                        |  |               | 33,145 |               |   | 40,229       |   |       | 1,530  |              |   | 9,222  |   |   | 84,126 |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Operating income (loss)                         |  |               | 3,591  |               |   | (1,752       | ) |       | (1,530 | )            |   | (9,222 | ) |   | (8,913 | )
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Other income (expense)                          |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Interest                                        |  |               | (2     | )             |   | (4           | ) |       |       |              |   | 16     |   |   | 10     |  
|Other                                           |  |               | (4     | )             |   | 17           |   |       |       |              |   | 134    |   |   | 147    |  
|Foreign exchange gain                           |  |               | 135    |               |   |             |   |       |       |              |   |       |   |   | 135    |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Income (loss) before income taxes               |  | $             | 3,720  |               | $ | (1,739       | ) | $     | (1,530 | )            | $ | (9,072 | ) | $ | (8,621 | )
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Depreciation and amortization included
above    |  | $             | 2,391  |               | $ | 748          |   | $     | 35     |              | $ | 97     |   | $ | 3,271  |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Share-based compensation included in above:     |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Cost of clinical laboratory services            |  |               |       |               | $ | 8            |   |       |       |              |   |       |   | $ | 8      |  
|Research and development                        |  | $             | 16     |               |   |             |   |       |       |              |   |       |   |   | 16     |  
|Selling, general and administrative             |  |               | 71     |               |   | 51           |   |       |       |              | $ | 724    |   |   | 846    |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Total                                           |  | $             | 87     |               | $ | 59           |   |       |       |              | $ | 724    |   | $ | 870    |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  
|Capital expenditures                            |  | $             | 304    |               | $ | 717          |   |       |       |              | $ |       |   | $ | 1,021  |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |        |   |   |        |  

14

---



Nine months ended April 30, 2010

|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|----------------------------------------------- |  | ------------- | ------ | ------------- | - | ------------ | - | ----- | ------ | ------------ | - | ------- | - | - | ------- | -
|                                                |  | Life
Sciences |        | Clinical
Labs |   | Therapeutics |   | Other |        | Consolidated |  
|                                                |  |               |        |               |   |              |   |       |        |              |  
|Revenues:                                       |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Product revenues                                |  | $             | 32,599 |               |   |             |   |       |       |              |   |        |   | $ | 32,599  |  
|Royalty and license fee income                  |  |               | 7,044  |               |   |             |   |       |       |              |   |        |   |   | 7,044   |  
|Clinical laboratory services                    |  |               |       |               | $ | 32,494       |   |       |       |              |   |        |   |   | 32,494  |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|                                                |  |               | 39,643 |               |   | 32,494       |   |       |       |              |   |        |   |   | 72,137  |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Operating expenses:                             |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Cost of product revenues                        |  |               | 15,771 |               |   |             |   |       |       |              |   |        |   |   | 15,771  |  
|Cost of clinical laboratory services            |  |               |       |               |   | 21,623       |   |       |       |              |   |        |   |   | 21,623  |  
|Research and development                        |  |               | 5,348  |               |   |              |   | $     | 1,925  |              |   |        |   |   | 7,273   |  
|Selling, general, and administrative            |  |               | 15,156 |               |   | 13,674       |   |       |       |              | $ | 8,011   |   |   | 36,841  |  
|Provision for uncollectible accounts
receivable |  |               |       |               |   | 2,073        |   |       |       |              |   |        |   |   | 2,073   |  
|Legal                                           |  |               | 97     |               |   | 185          |   |       |       |              |   | 748     |   |   | 1,030   |  
|Litigation settlement and related legal
costs   |  |               |       |               |   |             |   |       |       |              |   | 3,698   |   |   | 3,698   |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Total operating expenses                        |  |               | 36,372 |               |   | 37,555       |   |       | 1,925  |              |   | 12,457  |   |   | 88,309  |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Operating income (loss)                         |  |               | 3,271  |               |   | (5,061       | ) |       | (1,925 | )            |   | (12,457 | ) |   | (16,172 | )
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Other income (expense):                         |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Interest                                        |  |               | (4     | )             |   |             |   |       |       |              |   | 17      |   |   | 13      |  
|Other                                           |  |               | (33    | )             |   | 39           |   |       |       |              |   |        |   |   | 6       |  
|Foreign exchange loss                           |  |               | (351   | )             |   |             |   |       |       |              |   |        |   |   | (351    | )
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Income (loss) before income taxes               |  | $             | 2,883  |               | $ | (5,022       | ) | $     | (1,925 | )            | $ | (12,440 | ) | $ | (16,504 | )
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Depreciation and amortization included
above    |  | $             | 2,352  |               | $ | 739          |   | $     | 39     |              | $ | 94      |   | $ | 3,224   |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Share-based compensation included in above:     |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Cost of clinical laboratory services            |  | $             |       |               | $ | 9            |   | $     |       |              | $ |        |   | $ | 9       |  
|Research and development                        |  |               | 10     |               |   |             |   |       |       |              |   |        |   |   | 10      |  
|Selling, general and administrative and
legal   |  |               | 82     |               |   | 62           |   |       |       |              |   | 688     |   |   | 832     |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Total                                           |  | $             | 92     |               | $ | 71           |   | $     |       |              | $ | 688     |   | $ | 851     |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  
|Capital expenditures                            |  | $             | 1,082  |               | $ | 1,425        |   | $     |       |              | $ | 62      |   | $ | 2,569   |  
|                                                |  |               |        |               |   |              |   |       |        |              |   |         |   |   |         |  

15

---



Note 13 - Contingencies

On or about September 22, 2010, Mayflower Partners, L.P. f/k/a Biomol
International, L.P. (Mayflower) filed an action against Enzo Biochem, Inc.
and Enzo Life Sciences, Inc. (together Enzo) in the United States District
Court for the Southern District of New York, alleging breach of the stock and
asset purchase agreement dated as of May 8, 2008 between Enzo and Mayflower
(the Agreement). Pursuant to the Agreement, the Company acquired the assets
of Mayflower, and agreed, among other things, to make certain contingent
earn-out payments to Mayflower, accounted for as additional purchase price
consideration, if certain performance thresholds were met for each of the two
annual periods following the closing. Mayflower alleges that Enzo breached the
Agreement by allegedly failing to operate the acquired business in good faith
during the second earn-out period and engaging in conduct the primary purpose
of which was to avoid making a second earn-out period payment under the
Agreement. In addition, Mayflower claims that Enzo breached the Agreement by
allegedly failing to provide the documentation appropriate to support the
calculation of defined financial criteria for the second earn-out period as
required under the Agreement. As part of the litigation, Mayflower moved by
Order to Show cause to enjoin the accounting procedure specified under the
Agreement. Mayflowers motion was heard by a U.S. District Court Judge on
September 27, 2010, who directed that the parties first go forward with the
accounting procedure, as provided under the Agreement, before moving further
with the litigation. The parties were unable to resolve the dispute through the
accounting procedure. On January 27, 2011, Mayflower filed an amended
complaint. On February 25, 2011, Enzo filed an answer to the amended complaint
and on March 4, 2011 filed an amended counterclaim seeking fees and expense of
the suit as provided under the Agreement. As provided under the Agreement,
Mayflowers maximum recovery in the event that it is successful on either the
accounting or in litigation is settlement of the $2.5 million contingent
earn-out in either Enzo common stock or cash, as set forth in the Agreement,
plus attorneys fees. Enzo denies that it is in breach of the Agreement and
will vigorously defend the suit.

Lawrence F. Glaser and Maureen Glaser, individually and on behalf of
Kimberly, Erin, Hannah, and Benjamin Glaser v. Hyman Gross, Barry Weiner, Enzo
Biochemical Inc., Elazar Rabbani, Shahram Rabbani, John Delucca, Dean Engelhardt,
Richard Keating, Doug Yates, and Does 1-50, Case No. CA-02-1242-A, U.S.
District Court for the Eastern District of Virginia. This action was commenced
on or about March 6, 2002 by an investor in the Company who had filed for
bankruptcy protection and for his family. The complaint alleged securities and
common law fraud and breach of fiduciary duty and sought in excess of $150
million in damages. On August 22, 2002, the complaint was voluntarily
dismissed; however a new substantially similar complaint was filed at the same
time. On October 21, 2002, the Company and the other defendants filed a motion
to dismiss the complaint, and the plaintiffs responded by amending the
complaint and dropping their claims against defendants Keating and Yates. On November
18, 2002, the Company and the other defendants again moved to dismiss the
Amended Complaint. On July 16, 2003, the Court issued a Memorandum Opinion
dismissing the Amended Complaint in its entirety with prejudice. Plaintiffs
thereafter moved for reconsideration but the Court denied the motion on
September 8, 2003. Plaintiffs thereafter appealed the decision to the United
States Court of Appeals for the Fourth Circuit. On March 21, 2005, the Fourth
Circuit affirmed the lower Courts prior dismissal of all claims asserted in
the action with the sole exception of a portion of the claim for common law
fraud and remanded that remaining portion of the action to the U.S. District
Court for the Eastern District of Virginia. On May 20, 2005, defendants again moved
the District Court to dismiss the sole remaining claim before it. On July 14,
2005, the District Court granted defendants renewed motion to dismiss. On July
29, 2005, Plaintiffs moved to amend their Complaint and for reconsideration. On
August 19, 2005, the Court denied Plaintiffs motion to amend and entered final
judgment dismissing the Complaint. Plaintiffs then appealed the order and
judgment to the Fourth Circuit. On September 21, 2006, the United States Court
of Appeals for the Fourth Circuit affirmed the dismissal of the Complaint.
Thereafter, in March 2007, the United States Supreme Court denied the Glazers
Petition for Certiorari. Nevertheless, on January 14, 2011, many years after it
was finally dismissed, Glaser filed a motion for reconsideration of the
dismissal of his case with the United States District Court for the
Eastern District of Virginia, along with a motion for sanctions, claiming in
pertinent part that the Court was defrauded. On April 8, 2011, the District Court denied Plaintiffs motion. Plaintiffs
thereafter appealed the denial of the motion to the Fourth Circuit. That appeal
is currently pending. The Company believes that the Plaintiffs appeal is
frivolous and will be swiftly rejected, and intends in all events to defend vigorously
any effort to re-open this long ago dismissed action.

16

---



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 consolidated financial
statements and related notes and other information included elsewhere in this
Quarterly Report on Form 10-Q.

Forward-Looking Statements

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

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

We do not assume any obligation to update or revise any forward-looking
statement that we make, even if new information becomes available or other
events occur in the future. We are also affected by other factors that may be
identified from time to time in our filings with the Securities and Exchange
Commission, some of which are set forth in Item 1A - Risk Factors in our Form
10-K filing for the 2010 fiscal year. You are advised to consult any further
disclosures we make on related subjects in our Forms 10-Q, 8-K and 10-K reports
to the Securities and Exchange Commission. Although we have attempted to
provide a list of important factors which may affect our business, investors
are cautioned that other factors may prove to be important in the future and
could affect our operating results. You should understand that it is not
possible to predict or identify all such factors or to assess the impact of
each factor or combination of factors on our business. Consequently, you should
not consider any such list to be a complete set of all potential risks or
uncertainties.

Overview

The Company is a growth-oriented integrated life sciences and
biotechnology company focused on harnessing biological processes to develop
research tools, diagnostics and therapeutics and serves as a provider of test
services, including esoteric tests, to the medical community. Since our
founding in 1976, our strategic focus has been on the development of enabling
technologies in research, development, manufacture, licensing and marketing of
innovative health care products, platforms and services based on molecular and
cellular technologies. Our pioneering work in genomic analysis coupled with its
extensive patent estate and enabling platforms have strategically positioned
the Company to play an important role in the rapidly growing life sciences and
molecular medicine marketplaces.

17

---



We are comprised of three wholly owned operating segments that have
evolved out of our core competencies: the use of nucleic acids as informational
molecules and the use of compounds for immune modulation. Below are brief
descriptions of each of the three operating segments (see Note 12 in the Notes
to Consolidated Financial Statements):

Enzo Life Sciencesmanufactures, develops and markets
functional biology and cellular biochemistry products and tools to research and
pharmaceutical customers world-wide and has amassed a large patent and
technology portfolio. Enzo Life Sciences, Inc. is a recognized leader in
labeling and detection technologies across research and diagnostic markets. Our
portfolio of proteins, antibodies, peptides, small molecules, labeling probes,
dyes and kits provides life science researchers tools for target
identification/validation, high content analysis, gene expression analysis,
nucleic acid detection, protein biochemistry and detection, and cellular
analysis. We are internationally recognized and acknowledged as a leader in
manufacturing, in-licensing, and commercialization of over 9,000 of our own
products and in addition distribute over 30,000 products made by over 40 other
original manufacturers.

Our strategic focus is directed to innovative high quality research
reagents and kits in the primary key research areas of protein homeostasis,
epigenetics, live cell analysis, molecular biology and immunoassays. The
segment is an established source for a comprehensive panel of products to
scientific experts in the fields of Natural Products/Antibiotics, Autophagy,
Cancer, Cell Cycle, Cell Death, Cell Signaling, Cellular Analysis,
Endocrinology/Hormones, DNA regulation, Compound Screening, Genomics/Molecular
Biology, GPCRs, Immunology, Inflammation, Metabolism, Neuroscience, Nitric
Oxide pathway, Obesity/Adipokines, Oxidative Stress, Proteases and Proteosomes,
Protein Expression and modification, Signal Transduction, Stress/Heat Shock
proteins and Ubiquitin/Ubl signaling.

Enzo Clinical Labsis a regional clinical laboratory
serving the greater New York, New Jersey and Eastern Pennsylvania medical
communities. The Company believes having clinical diagnostic services allows us
to capitalize firsthand on our extensive advanced molecular and cytogenetic
capabilities and the broader trends in predictive and personalized diagnostics.
We offer a menu of routine and esoteric clinical laboratory tests or procedures
used in general patient care by physicians to establish or support a diagnosis,
monitor treatment or medication, or search for an otherwise undiagnosed
condition. We operate a full-service clinical laboratory in Farmingdale, New
York, a network of approximately 30 patient service centers throughout greater
New York, New Jersey and Eastern Pennsylvania, a stand alone stat or rapid
response laboratory in New York City, and a full-service phlebotomy and
logistics department.

Enzo Therapeuticsis a biopharmaceutical venture that
has developed multiple novel approaches in the areas of gastrointestinal,
infectious, ophthalmic and metabolic diseases, many of which are derived from
the pioneering work of Enzo Life Sciences. The Company has focused its efforts
on developing treatment regimens for diseases and conditions in which current
treatment options are ineffective, costly, and/or cause unwanted side effects.
This focus has generated a clinical and preclinical pipeline, as well as more
than 45 patents and patent applications.

18

---



Results of
Operations 
Three months ended April 30, 2011 as compared to April 30, 2010

Comparative Financial Data for the Three Months Ended April 30,

|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|------------------------------------------------ |  | ---- | ------ | ---- | - | -------------------- | - | -------- | ----- | - |  | --- | --
|                                                 |  | 2011 |        | 2010 |   | Increase
 (Decrease) |   | % Change |      
|                                                 |  |      |        |      |   |                      |   |          |      
|Revenues:                                        |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Product revenues                                 |  | $    | 10,935 |      | $ | 11,089               |   | $        | (154  | ) |  | (1  | )%
|Royalty and license fee income                   |  |      | 1,083  |      |   | 1,894                |   |          | (811  | ) |  | (43 | ) 
|Clinical laboratory services                     |  |      | 13,809 |      |   | 10,805               |   |          | 3,004 |   |  | 28  |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Total revenues                                   |  |      | 25,827 |      |   | 23,788               |   |          | 2,039 |   |  | 9   |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Operating expenses:                              |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Cost of product revenues                         |  |      | 5,195  |      |   | 5,394                |   |          | (199  | ) |  | (4  | ) 
|Cost of clinical laboratory services             |  |      | 8,268  |      |   | 7,863                |   |          | 405   |   |  | 5   |   
|Research and development                         |  |      | 2,053  |      |   | 2,479                |   |          | (426  | ) |  | (17 | ) 
|Selling, general, and administrative             |  |      | 10,877 |      |   | 11,795               |   |          | (918  | ) |  | (8  | ) 
|Provision for uncollectible accounts
 receivable |  |      | 1,005  |      |   | 650                  |   |          | 355   |   |  | 55  |   
|Legal                                            |  |      | 695    |      |   | (127                 | ) |          | 822   |   |  | 647 |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Total operating expenses                         |  |      | 28,093 |      |   | 28,054               |   |          | 39    |   |  |    |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Operating loss                                   |  |      | (2,266 | )    |   | (4,266               | ) |          | 2,000 |   |  | 47  |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Other income (expense):                          |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Interest income                                  |  |      | 2      |      |   | 3                    |   |          | (1    | ) |  | (33 | ) 
|Other                                            |  |      | 71     |      |   | 20                   |   |          | 51    |   |  | 255 |   
|Foreign currency gain (loss)                     |  |      | 191    |      |   | (156                 | ) |          | 347   |   |  | 222 |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   
|Loss before income taxes                         |  | $    | (2,002 | )    | $ | (4,399               | ) | $        | 2,397 |   |  | 54  |   
|                                                 |  |      |        |      |   |                      |   |          |       |   |  |     |   

Consolidated Results:

The 2011 period and the 2010 period refer to the three months ended
April 30, 2011 and 2010, respectively.

Product
revenues were $10.9 million during the 2011 period as compared to $11.1 million
in the 2010 period, a decrease of $0.2 million or 1% primarily due to an
organic sales decline of 3% partially attributed to the ongoing strategy to
increase direct sales and rationalize certain distribution business partly
offset by a 2% positive impact from foreign currency translation.

Royalty
and license fee income during the 2011 period was $1.1 million compared to $1.9
million in the 2010 period, a decrease of $0.8 million or 43%. The 2011 period
royalties were earned from the reported net sales of Qiagen products subject to
a license agreement and are equal to Qiagen royalties earned during the 2010
period. The 2011 period decrease is due to Abbotts notification that they had
made a final payment under a license agreement since they are not aware of any
non-expired patents covered under the license agreement. Abbott and Enzo are in
communication as to patents covered and the license agreement between Abbott
and the Company, which includes other provisions, is in full force. Abbott
royalties and license fees earned during the 2010 period were $0.8 million.
There are no direct expenses relating to royalty and licensing income.

Clinical
laboratory revenues during the 2011 period were $13.8 million compared to $10.8
million in the 2010 period. The 2011 periods increase over the 2010 period of
$3.0 million or 28% was due to organic growth of 17%, in addition to an
increase of 11% in revenue related to a new payer contract with Empire Blue
Cross of New York, effective August 1, 2010.

The cost
of product revenues during the 2011 period decreased $0.2 million or 4% due to
the decline in product sales. Despite the decrease in product revenues the
gross profit margin was comparable, primarily due to product price increases
that went into effect during the 2011 period.

19

---



The cost
of clinical laboratory services during the 2011 period was $8.3 million as
compared to $7.9 million in the 2010 period, an increase of $0.4 million or 5%.
The Company incurred increased costs due to higher reagent costs and supplies
of $0.5 million, an increase in outside reference lab costs of $0.1 million and
an increase of $0.1 million in other outside labor costs, attributed to
increased service volume and test mix, offset by a decrease of payroll benefit
costs of $0.3 million. In the 2011 period the gross profit margin improved from
27% to 40% due to various factors including; increased revenues, process
improvements and the positive impact of greater service volume on fixed costs
coverage.

Research
and development expenses were approximately $2.1 million during the 2011
period, compared to $2.5 million in the 2010 period, a decrease of $0.4 million
or 17%. The decrease was principally attributed to lower costs of $0.4 million
at Enzo Life Sciences primarily due the realignment of the R&D workforce
that occurred in July 2010. There was a $0.1 million decline in clinical trial
and related activities and payroll costs at the Therapeutics segment.

Selling,
general and administrative expenses were approximately $10.9 million during the
2011 period as compared to $11.8 million in the 2010 period, a decrease of $0.9
million or 7%. The decrease is due to the Enzo Life Sciences segments decrease
of $0.8 million which principally included a decline of approximately $0.4
million of discretionary marketing costs due to refocused spending, and $0.2
million for a change in allocation of costs versus the 2010 period. The
Clinical Lab segment increased $0.1 million primarily due to increased payroll
and related benefits primarily due to increases in sales commissions directly
attributed to increased revenues of $3.0 million partially offset by decreases
in headcount arising from process improvement initiatives and self-insured
medical insurance costs arising from favorable claim experience. The Other
segments selling general and administrative decreased $0.2 million, primarily
due to decreases in outside consulting costs and professional fees of $0.3
million directly related to planned cost reductions effective August 1, 2010,
offset by increases in payroll and payroll related costs of $0.1 million.

The
provision for uncollectible accounts receivable, primarily relating to the
Clinical Labs segment was $1.0 million for the 2011 period as compared to $0.7
million in the 2010 period, an increase of $0.3 million. As a percentage of
Clinical Labs revenues, bad debts increased to 7.3% as compared to 6.0% in the
2010 period. The increase is attributed to the additional provision required
due to the increase in the patient revenue for the 2011 period as compared to
the 2010 period. With the on-going collections initiatives in process we expect
bad debts to improve as a percentage of Clinical Labs revenues.

Legal
expense was $0.7 million during the 2011 period compared to a credit of $0.1
million in the 2010 period, an increase of $0.8 million due to overall
increases in legal services in the 2011 period relating to general legal
matters and as compared to 2010 periods reduction in legal services provided
related to patent litigation and negotiated fee adjustments and settlements.

The 2011
period foreign exchange gain was approximately $0.2 million compared to a loss
of $0.1 million in the 2010 period. The foreign exchange gain or loss is
determined on two factors, an intercompany loan denominated in British pounds
sterling and transactions denominated in foreign currencies. During the 2011
period, the sterling appreciated compared to the dollar by 5%, as compared to
depreciation of the sterling during the 2010 period. Further, the Swiss franc
appreciated compared to all major currencies during the 2011 period, which
contributed to the foreign exchange benefit.

20

---



Segment Results

The Life Sciences segments income before taxes was $1.1 million for
the 2011 period as compared to $0.5 million for the 2010 period with the
improvement being directly attributed to the results of the on-going
integration of our businesses and related operational improvements and cost reductions.
Despite the improved results, product revenues decreased by $0.2 million or 1%
in the 2011 period primarily due to net organic sales decline of 3% partially
attributed to the on-going strategy to increase direct sales and rationalize
certain distribution business offset by favorable foreign exchange of 2%.
Royalty and license fee income decreased by $0.8 million in the 2011 period due
to the decrease in royalties from the Abbott license agreement. The segments
2011 period gross profit of $6.8 million decreased by $0.8
million due to the previously discussed decrease in product and royalty revenues partially offset by the decrease in cost of product
revenues. The segments other operating expenses, including selling, general
and administrative, legal and research and development, decreased by
approximately $1.0 million during the 2011 period due to the lower marketing
and selling expenses attributed to refocused and lower planned spending, change
in allocation of expenses and reduced research and development expenses
principally due to the realignment of research and development workforce that
occurred in July 2010.

The Clinical Labs segments loss before taxes was $0.1 million for the
2011 period as compared to a loss of $2.2 million in the 2010 period, with the
improvement arising from revenue growth, process improvements and cost
containment. The revenue from laboratory services increased in the 2011 period
by $3.0 million or 28% due to increased service volume from net organic growth
of 17% and the increased service revenue from the new payer contract with
Empire Blue Cross of New York of 11%, effective August 2010. The 2011 period
gross profit margin improvement from 27% to 40% is attributed to the previously
discussed changes in revenues and favorable impacts on cost of clinical laboratory
services arising from process improvements and benefits from the greater
service volume on fixed costs coverage. In the 2011 period, selling, general
and administrative expense increased by approximately $0.1 million primarily
due to increased payroll and related benefits primarily due to increases in
sales commissions directly attributed to increased revenues partially offset by
decreases in headcount arising from process improvement initiatives. As a
percentage of revenues, selling, general and administrative decreased to 33%
from 41%. The provision for uncollectible accounts receivables increased by
$0.4 million as compared to the 2010 period due the increase in patient service
volume.

The Therapeutics segments loss before income taxes was approximately
$0.5 million for the 2011 period as compared to $0.6 million for the 2010
period. The decrease of $0.1 million in the 2011 period was primarily due to
decreases in clinical trial activities being incurred and decreases in payroll
related expenses.

The Other segments
loss before taxes for the 2011 period was approximately $2.5 million as
compared to $2.1 million in the 2010 period, an increase of $0.4 million. For
the 2011 period overall general and administrative expenses decreased by $0.3
million, including professional fees and payroll and benefit costs and other
costs directly related to planned cost reductions effective August 1, 2010.
Legal costs increased by $0.7 million over the 2010 period due increased
general legal matters and proxy related costs.

21

---



Results of
Operations 
Nine months ended April 30, 2011 as compared to April 30, 2010

Comparative Financial Data for the Nine Months Ended April 30,

|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|------------------------------------------------ |  | ---- | ------ | ---- | - | -------------------- | - | -------- | ------ | - |  | ---- | --
|                                                 |  | 2011 |        | 2010 |   | Increase
 (Decrease) |   | % Change |       
|                                                 |  |      |        |      |   |                      |   |          |       
|Revenues:                                        |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Product revenues                                 |  | $    | 31,356 |      | $ | 32,599               |   | $        | (1,243 | ) |  | (4   | )%
|Royalty and
 license fee income                  |  |      | 5,380  |      |   | 7,044                |   |          | (1,664 | ) |  | (24  | ) 
|Clinical
 laboratory services                    |  |      | 38,477 |      |   | 32,494               |   |          | 5,983  |   |  | 18   |   
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Total revenues                                   |  |      | 75,213 |      |   | 72,137               |   |          | 3,076  |   |  | 4    |   
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Operating
 expenses:                             |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Cost of product
 revenues                        |  |      | 15,708 |      |   | 15,771               |   |          | (63    | ) |  | (1   | ) 
|Cost of clinical
 laboratory services            |  |      | 23,333 |      |   | 21,623               |   |          | 1,710  |   |  | 8    |   
|Research and
 development                        |  |      | 5,831  |      |   | 7,273                |   |          | (1,442 | ) |  | (20  | ) 
|Selling, general,
 and administrative            |  |      | 33,450 |      |   | 36,841               |   |          | (3,391 | ) |  | (9   | ) 
|Provision for
 uncollectible accounts receivable |  |      | 3,037  |      |   | 2,073                |   |          | 964    |   |  | 47   |   
|Legal                                            |  |      | 2,767  |      |   | 1,030                |   |          | 1,737  |   |  | 169  |   
|Litigation
 settlement and related legal costs   |  |      |       |      |   | 3,698                |   |          | (3,698 | ) |  | (100 | ) 
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Total operating
 expenses                        |  |      | 84,126 |      |   | 88,309               |   |          | (4,183 | ) |  | (5   | ) 
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Operating loss                                   |  |      | (8,913 | )    |   | (16,172              | ) |          | 7,259  |   |  | 45   |   
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Other income
 (expense):                         |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Interest income                                  |  |      | 10     |      |   | 13                   |   |          | (3     | ) |  | (23  | ) 
|Other                                            |  |      | 147    |      |   | 6                    |   |          | 141    |   |  | 2350 |   
|Foreign currency
 gain (loss)                    |  |      | 135    |      |   | (351                 | ) |          | 486    |   |  | 138  |   
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   
|Loss before income
 taxes                        |  | $    | (8,621 | )    | $ | (16,504              | ) | $        | 7,883  |   |  | 48   |   
|                                                 |  |      |        |      |   |                      |   |          |        |   |  |      |   

Consolidated Results:

The 2011 period and the 2010 period refer to the nine months ended
April 30, 2011 and 2010, respectively.

Product
revenues were $31.4 million in the 2011 period compared to $32.6 million in the
2010 period, a decrease of $1.2 million or 4% due to a decline of $1.0 million
or 3% in organic sales, partially attributed to the ongoing strategy to
increase direct sales and rationalize certain distribution business, and a 1%
negative impact from foreign currency translation. Approximately $1.1 million
of the 2011 period decrease in product revenues occurred in the first and
second fiscal quarters. Product revenues during the fiscal third quarter of the
2011 period increased over the fiscal second quarter of the 2011 period by 7%
or $0.7 million.

Royalty
and license fee income was $5.4 million in the 2011 period compared to $7.0
million in the 2010 period, a decrease of $1.7 million or 24%. Royalties are
primarily earned from the reported sales of Qiagen products subject to a
license agreement. During both the 2011 and 2010 periods, the Company
recognized royalties of approximately $4.8 million from Qiagen. The 2011 period
decrease is due to Abbotts notification that they had made a final payment
under a license agreement since they are not aware of any non-expired patents
covered under the license agreement. Abbott and the Company are in
communication as to patents covered and the license agreement between Abbott
and the Company, which includes other provisions, is in full force. During the
2011 period, the Company recognized royalties and license fees from the Abbott
agreement of approximately $0.5 versus $2.2 million in the 2010 period. There
are no direct expenses relating to royalty and licensing income.

Clinical
laboratory revenues during the 2011 period were $38.5 million compared to $32.5
million in the 2010 period. The 2011 periods increase over the 2010 period was
$6.0 million or 18% due to organic growth of 11%, in addition to an increase of
7% in revenue related to a new payer contract, with Empire Blue Cross of New
York, effective August 1, 2010.

The cost of product revenues during the 2011 period was $15.7 million
compared to $15.8 million in the 2010 period, a decrease of $0.1 million or
approximately 1%. Although product sales declined during the 2011 period, cost
of product revenues was negatively impacted by higher salaries and changes in
cost allocations to the cost of production.

22

---



The cost
of clinical laboratory services during the 2011 period was $23.3 million as
compared to $21.6 million in the 2010 period, an increase of $1.7 million or
8%. The Company incurred increased costs due to higher reagent costs and
supplies of $1.5 million, primarily due to increased service volume and reagent
costs for certain tests that were previously sent to outside reference labs,
higher laboratory personnel and related costs of $0.1 million primarily due to
incremental increases in salaries and other costs of $0.2 million offset by a
decrease of outside reference lab costs of $0.1 million. In the 2011 period the
gross profit margin improved from 33% to 39% due to increased revenues, process
improvements and the positive impact of greater service volume on fixed costs
coverage.

Research
and development expenses were approximately $5.8 million during the 2011
period, compared to $7.3 million in the 2010 period, a decrease of $1.5 million
or 20%. The decrease was principally attributed to lower costs of $1.1 million
at Enzo Life Sciences primarily due the realignment of the R&D workforce
that occurred in July 2010. There was a $0.4 million decline in clinical trial
and related activities and payroll costs at the Therapeutics segment.

Selling,
general and administrative expenses were approximately $33.4 million during the
2011 period as compared to $36.8 million in the 2010 period, a decrease of $3.4
million or 9%. The decrease for the Enzo Life Sciences segment was $2.3 million
principally comprised of a decline of approximately $1.2 million of
discretionary marketing costs due to refocused spending, reduced payroll and
related benefits of $0.3 million, recruitment costs of $0.1 million, and
changes in allocation of expenses of $0.4 million. The Clinical Lab segments
selling general and administrative decreased by $0.1 million primarily due to a
decline in payroll and related benefits of $0.3 million and a decline in other
expenses of $0.1 million, partially offset by an increase in sales commission
of $0.3 million, the result of the increased service revenues. The Other
segments selling general and administrative decreased $1.0 million, primarily
due to decreases in outside consulting costs of $0.5 million, professional fees
of $0.3 million and the decrease in public company expenses of $0.2 million,
directly related to planned cost reductions effective August 1, 2010.

The
provision for uncollectible accounts receivable, primarily relating to the
Clinical Labs segment was $3.0 million for the 2011 period as compared to $2.0
million in the 2010 period, an increase of $1.0 million attributed to an
increase in patient service revenue. As a percentage of Clinical Lab revenues
bad debts increased to 7.9% as compared to 6.4% in the 2010 period. With the
on-going collection initiatives in process we expect bad debts to improve as a percentage of Clinical Labs revenues.

Legal
expense was $2.7 million during the 2011 period compared to $1.0 million in the
2010 period, an increase of $1.7 million due to overall increases in legal
services in the 2011 period of $0.7 million relating to general legal matters
and proxy related matters, and the impact of the recording $0.5 million in
insurance reimbursements and $0.5 million in negotiation and settlement
adjustments in the 2010 period.

During the 2010 period, in connection with the litigation settlement
with Mr. Shahram K. Rabbani to settle all of his claims against the Company,
and certain of its executive officers, the Company agreed to pay a lump sum
payment of $2.7 million. The Company recorded a settlement expense of
approximately $3.7 million, consisting of the lump sum payment of $2.7 million
and approximately $1.0 million of legal expenses incurred in connection with
the claims.

The 2011
period foreign exchange benefit was approximately $0.1 million compared to a
loss of $0.4 million in the 2010 period. The foreign exchange benefit or loss is
determined on two factors, an intercompany loan denominated in British pounds
sterling, and transactions denominated in foreign currencies. During the 2011
period, the sterling appreciated compared to the dollar by 6.5%, as compared to
depreciation of the sterling during the 2010 period of 7.3%, an improvement of
13.8%.

23

---



Segment Results

The Life Sciences segments income before taxes was $3.7 million for
the 2011 period as compared to $2.9 million for the 2010 period with the
improvement being directly attributed to the results on the on-going
integration of our businesses and related operational improvements and cost
reductions. Despite the improved results product revenues decreased by $1.2
million or 4% in the 2011 period primarily due to a decline of organic sales of
3% partially attributed to the on-going strategy to increase direct sales and
rationalize certain distribution business and unfavorable impact of foreign
exchange of 1%. The decrease in royalty and license fee income of $1.7 million
in the 2011 period was attributed to no royalty payments received under the
Abbott license agreement after the first quarter of the 2011 period. The
segments gross profit of $21.0 million in the 2011 period was negatively
impacted by the previously discussed changes in revenues and cost of product
revenues. The segments other operating expenses, including selling, general
and administrative, legal and research and development, decreased by
approximately $3.2 million during the 2011 period primarily due to the lower
marketing and selling expenses attributed to refocused and lower planned
spending, a decline in payroll and payroll related costs, changes in expense
allocations and reduced research and development expenses principally due to
the realignment of research and development workforce that occurred in July
2010.

The Clinical Labs segments loss before taxes was $1.7 million for the
2011 period as compared to $5.0 million in the 2010 period. The revenue from
laboratory services increased in the 2011 period by $6.0 million due to organic
growth of 11% and the 7% increase in revenue due to the new payer contract with
Empire Blue Cross of New York effective August 2010. The 2011 period gross
profit of $15.1 million improved the gross profit margin from 33% to 39% over
the 2010 period due to the previously discussed changes in service revenues and
favorable impacts on cost of clinical laboratory from process improvements and
benefits resulting from the greater service volume on fixed costs coverage.
Selling, general and administrative expense decreased by approximately $0.1
million primarily due to decreases in benefits and other costs, partially
offset by increases in sales commissions directly the result of increased
service revenues. The provision for uncollectible accounts receivables
increased by $1.0 million as compared to the 2010 period due to the increase in
patient service volume.

The Therapeutics segments loss before income taxes was approximately
$1.5 million for the 2011 period as compared to a loss of $1.9 million for the
2010 period. The decrease in the segment loss of $0.4 million was primarily due
to decreases in clinical trial activities incurred and a decrease in payroll
related expenses.

The Other segments loss before taxes for the 2011 period was
approximately $9.1 million as compared to $12.4 million in the 2010 period, a
decrease of $3.3 million. During the 2011 period, there was an increase in
other income of $0.1 million and a decrease of $1.0 million in selling, general
and administrative due to lower consulting costs and professional fees,
partially attributed to the July 2010 planned cost reductions offset by an
increase of $1.5 million in legal fees for general legal and proxy related
costs and the impact of the recording $0.5 million in insurance
reimbursements and $0.5 million in negotiation and settlement adjustments in
the 2010 period.
Further, the 2010 period loss included a litigation settlement and related
legal costs of $3.7 million.

Liquidity and Capital Resources

At April 30, 2011, the Company had cash and cash equivalents of $9.7
million and short-term investments of $17.8 million, or $27.5 million in
aggregate as compared to $33.6 million at July 31, 2010. Short term investments
are in U.S. Government Treasury bills. The Company had working capital of $37.2
million at April 30, 2011 compared to $42.2 million at July 31, 2010. The
decrease in working capital of $5.0 million was primarily the result of the net
loss and funding capital expenditures during the 2011 period.

Net cash used in operating activities for the nine months ended April
30, 2011 was approximately $5.1 million as compared to $13.2 million for the
nine months ended April 30, 2010. The decrease in net cash used in operating
activities in the 2011 period over the 2010 period of approximately $8.1
million was primarily attributed to the decrease in the net loss of $7.8
million and an increase in non-cash adjustments in the 2011 period over the
2010 period of $0.8 million offset by a net increase in the changes in
operating assets and liabilities of $0.5 million from the 2010 to 2011 period,
primarily relating to accounts receivable and accrued liabilities.

Net cash provided by investing activities was approximately $5.9
million compared to $15.0 million in the year ago period, a decrease of $9.1
million. The decrease is primarily due to the net maturities of short term
investments in US Government instruments of $7.0 million in the 2011 period as
compared to $17.5 million in the 2010 period offset by capital expenditures of
$1.0 million in 2011 period as compared to $2.6 million in the 2010 period.

24

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Biomol International L.P.

On or about September 22, 2010, Mayflower Partners, L.P. f/k/a Biomol
International, L.P. (Mayflower) filed an action against Enzo Biochem, Inc.
and Enzo Life Sciences, Inc. (together Enzo) in the United States District
Court for the Southern District of New York, alleging breach of the stock and
asset purchase agreement dated as of May 8, 2008 between Enzo and Mayflower
(the Agreement). Pursuant to the Agreement, the Company acquired the assets
of Mayflower, and agreed, among other things, to make certain contingent
earn-out payments to Mayflower, accounted for as additional purchase price
consideration, if certain performance thresholds were met for each of the two
annual periods following the closing. Mayflower alleges that Enzo breached the
Agreement by allegedly failing to operate the acquired business in good faith
during the second earn-out period and engaging in conduct the primary purpose
of which was to avoid making a second earn-out period payment under the
Agreement. In addition, Mayflower claims that Enzo breached the Agreement by
allegedly failing to provide the documentation appropriate to support the
calculation of defined financial criteria for the second earn-out period as
required under the Agreement. As part of the litigation, Mayflower moved by
Order to Show cause to enjoin the accounting procedure specified under the
Agreement. Mayflowers motion was heard by a U.S. District Court Judge on
September 27, 2010, who directed that the parties first go forward with the
accounting procedure, as provided under the Agreement, before moving further
with the litigation. The parties were unable to resolve the dispute through the
accounting procedure. On January 27, 2011, Mayflower filed an amended
complaint. On February 25, 2011, Enzo filed an answer to the amended complaint
and on March 4, 2011 filed an amended counterclaim seeking fees and expense of
the suit as provided under the Agreement. As provided under the Agreement,
Mayflowers maximum recovery in the event that it is successful on either the
accounting or in litigation is settlement of the $2.5 million contingent
earn-out in either Enzo common stock or cash, as set forth in the Agreement,
plus attorneys fees. Enzo denies that it is in breach of the Agreement and
will vigorously defend the suit.

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.

Contractual Obligations

There have been no material changes to our Contractual Obligations as
reported in our Form 10-K for the fiscal year ended July 31, 2010.

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.

Off Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements as such
term is defined in Item 303(a)(4) of Regulation S-K.

Critical Accounting Policies

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

Product revenues

Revenues from product sales are recognized when the products are
shipped and title transfers, the sales price is fixed or determinable and
collectibility is reasonably assured.

Royalties

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

25

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License fees and multiple element
arrangements

When evaluating multiple element arrangements, the Company considers
whether the components of the arrangement represent separate units of
accounting, which requires subjective determinations and requires management to
make judgments about the fair value of the individual elements and whether such
elements are separable from the other aspects of the contractual relationship.

Revenues  Clinical laboratory services

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

The following are tables of the Clinical Labs segments net revenues
and percentages by revenue category for the three and nine months ended April
30, 2011 and 2010:

Net revenues

|                  |  |                                    |        |                                    |  |     |   |   |        |  |  |     |  
|----------------- |  | ---------------------------------- | ------ | ---------------------------------- |  | --- | - | - | ------ |  |  | --- | -
|                  |  | Three months ended
 April 30, 2011 |        | Three months ended
 April 30, 2010 | 
|                  |  |                                    |        |                                    | 
|Revenue category  |  |                                    |        |                                    |  |     |   |   |        |  |  |     |  
|Medicare          |  | $                                  | 3,237  |                                    |  | 23  | % | $ | 2,711  |  |  | 25  | %
|Third-party payer |  |                                    | 6,375  |                                    |  | 46  |   |   | 4,714  |  |  | 44  |  
|Patient self-pay  |  |                                    | 2,966  |                                    |  | 21  |   |   | 2,247  |  |  | 21  |  
|HMOs             |  |                                    | 1,231  |                                    |  | 10  |   |   | 1,133  |  |  | 10  |  
|                  |  |                                    |        |                                    |  |     |   |   |        |  |  |     |  
|Total             |  | $                                  | 13,809 |                                    |  | 100 | % | $ | 10,805 |  |  | 100 | %
|                  |  |                                    |        |                                    |  |     |   |   |        |  |  |     |  

Net revenues

|                  |  |                                   |        |                                   |  |     |   |   |        |  |  |     |  
|----------------- |  | --------------------------------- | ------ | --------------------------------- |  | --- | - | - | ------ |  |  | --- | -
|                  |  | Nine months ended
 April 30, 2011 |        | Nine months ended
 April 30, 2010 | 
|                  |  |                                   |        |                                   | 
|Revenue category  |  |                                   |        |                                   |  |     |   |   |        |  |  |     |  
|Medicare          |  | $                                 | 8,862  |                                   |  | 23  | % | $ | 8,279  |  |  | 25  | %
|Third-party payer |  |                                   | 17,699 |                                   |  | 46  |   |   | 14,275 |  |  | 44  |  
|Patient self-pay  |  |                                   | 8,167  |                                   |  | 21  |   |   | 6,402  |  |  | 20  |  
|HMOs             |  |                                   | 3,749  |                                   |  | 10  |   |   | 3,538  |  |  | 11  |  
|                  |  |                                   |        |                                   |  |     |   |   |        |  |  |     |  
|Total             |  | $                                 | 38,477 |                                   |  | 100 | % | $ | 32,494 |  |  | 100 | %
|                  |  |                                   |        |                                   |  |     |   |   |        |  |  |     |  

The Company provides services to certain patients covered by various
third-party payers, including the Federal Medicare program. Laws and
regulations governing Medicare are complex and subject to interpretation for
which action for noncompliance includes fines, penalties and exclusion from the
Medicare programs. The Company believes that it is in compliance with all
applicable laws and regulations and is not aware of any pending or threatened investigations
involving allegations of potential wrongdoing.

Other than the Medicare program, two providers each exceeded 10% of the
Clinical Labs net revenues during some or all of the periods presented. The
first provider, whose programs are included in the Third-party payer and Health
Maintenance Organizations (HMOs) categories represented 22% and 25% of the
Clinical Labs net revenues for the three months ended April 30, 2011 and 2010,
respectively, and 22% and 25% for the nine months ended April 30, 2011 and
2010, respectively.The second provider, whose
programs are included in the Third-party payer category, represented 12% and
10% of the Clinical Labs net revenues for the three and nine months ended April
30, 2011, respectively.

26

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Contractual Adjustment

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

The other relevant factors that affect our contractual adjustment
include the monthly and quarterly review of: 1) current gross billings and receivables
and reimbursement by payer, 2) current changes in third party arrangements, 3)
the growth of in-network provider arrangements and managed care plans specific
to our Company.

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

During the three months ended April 30, 2011 and 2010, the contractual
adjustment percentages, determined using current and historical reimbursement
statistics, were 84.3% and 83.1%, respectively, of gross billings. During the
nine months ended April 30, 2011 and 2010, the contractual adjustment
percentages, determined using current and historical reimbursement statistics,
were 84.1% and 82.9%, respectively, of gross billings. The Company believes the
negative impact on revenues from the decline in reimbursement rates or the
shift to managed care, other primary third party payers, or similar
arrangements may be offset by the positive impact of the number of tests we
perform. However, there can be no assurance that we can increase the number of
tests we perform or that if we do increase the number of tests we perform, that
we can maintain that higher number of tests performed, or that an increase in
the number of tests we perform would result in increased revenue.

The Company estimates (by using a sensitivity analysis) that each 1%
point change in the contractual adjustment percentage could result in a change
in clinical laboratory services revenues of approximately $2,397,000 and
$1,901,000 for the nine months ended April 30, 2011 and 2010, respectively, and
a change in the net accounts receivable of approximately $439,000 as of April
30, 2011.

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

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

27

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Accounts Receivable and Allowance for Doubtful
Accounts

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

The following is a table of the Companys net accounts receivable by
segment. The Clinical Labs segments net receivables are detailed by billing
category and as a percent to its total net receivables. At April 30, 2011 and
July 31, 2010, approximately 53% and 45%, respectively, of the Companys net
accounts receivable relates to its Clinical Labs business, which operates in
the New York, New Jersey, and Eastern Pennsylvania medical communities.

The Life Sciences segments accounts receivable, of which approximately
$2.5 million or 39% and $2.0 million or 28% represents foreign receivables as
of April 30, 2011 and July 31, 2010 respectively, includes royalty receivables
of $1.2 million and $3.2 million, as of April 30, 2011 and July 31, 2010,
respectively, of which approximately $1.2 million and $2.6 million,
respectively is from Qiagen Corporation (Note 11).

Net accounts receivable

|                          |  |                       |        |                      |  |     |   |   |        |  |  |     |  
|------------------------- |  | --------------------- | ------ | -------------------- |  | --- | - | - | ------ |  |  | --- | -
|Billing category          |  | As of
 April 30, 2011 |        | As of
 July 31, 2010 | 
|                          |  |                       |        |                      | 
|Clinical Labs             |  |                       |        |                      |  |     |   |   |        |  |  |     |  
|Medicare                  |  | $                     | 1,492  |                      |  | 20  | % | $ | 849    |  |  | 14  | %
|Third party payers        |  |                       | 2,567  |                      |  | 35  |   |   | 2,664  |  |  | 46  |  
|Patient self-pay          |  |                       | 3,001  |                      |  | 41  |   |   | 2,024  |  |  | 35  |  
|HMOs                     |  |                       | 260    |                      |  | 4   |   |   | 296    |  |  | 5   |  
|                          |  |                       |        |                      |  |     |   |   |        |  |  |     |  
|Total Clinical Labs       |  |                       | 7,320  |                      |  | 100 | % |   | 5,833  |  |  | 100 | %
|                          |  |                       |        |                      |  |     |   |   |        |  |  |     |  
|Total Life Sciences       |  |                       | 6,450  |                      |  |     |   |   | 7,173  |  |  |     |  
|                          |  |                       |        |                      |  |     |   |   |        |  |  |     |  
|Total accounts receivable |  | $                     | 13,770 |                      |  |     |   | $ | 13,006 |  |  |     |  
|                          |  |                       |        |                      |  |     |   |   |        |  |  |     |  

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

|                                |  |                                     |        |                                      |   |        |  
|------------------------------- |  | ----------------------------------- | ------ | ------------------------------------ | - | ------ | -
|                                |  | Nine months
 ended
 April 30,
 2011 |        | Twelve months
 ended
 July 31,
 2010 |  
|                                |  |                                     |        |                                      |  
|Beginning balance               |  | $                                   | 2,839  |                                      | $ | 4,786  |  
|Provision for doubtful accounts |  |                                     | 3,037  |                                      |   | 3,480  |  
|Write-offs, net                 |  |                                     | (2,997 | )                                    |   | (5,427 | )
|                                |  |                                     |        |                                      |   |        |  
|Ending balance                  |  | $                                   | 2,879  |                                      | $ | 2,839  |  
|                                |  |                                     |        |                                      |   |        |  

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

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 nine months ended April 30, 2011
and 2010, the Company determined an allowance for doubtful accounts less than
210 days and wrote off 100% of accounts receivable over 210 days, as it assumed
those accounts are uncollectible, except for certain fully reserved balances,
principally related to Medicare. These accounts have not been written off
because the payers filing date deadline has not occurred or the collection
process has not been exhausted. The Companys collection experience on Medicare
receivables beyond 210 days has been insignificant. The Company adjusts the
historical collection analysis for recoveries, if any, on an ongoing basis.

The Companys
ability to collect outstanding receivables from third party payers is critical
to its operating performance and cash flows. The primary collection risk lies
with uninsured patients or patients for whom primary insurance has paid but a
patient portion remains outstanding. The Company also assesses the current
state of its billing functions in order to identify any known collection or
reimbursement issues in order to assess the impact, if any, on the allowance
estimates, which involves judgment.

28

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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 table indicates the Clinical Labs aged gross receivables
by payer group which is prior to adjustment to gross receivables for: 1)
contractual adjustment, 2) fully reserved balances not yet written off, and 3)
other revenue adjustments.

|                       |  |               |        |   |  |                  |   |   |       |                              |  |     |   |                  |        |   |  |             |   |   |       |  |  |     |   |   |       |  |  |     |  
|---------------------- |  | ------------- | ------ | - |  | ---------------- | - | - | ----- | ---------------------------- |  | --- | - | ---------------- | ------ | - |  | ----------- | - | - | ----- |  |  | --- | - | - | ----- |  |  | --- | -
|As of April 30, 2011   |  | Total
 Amount |        | % |  | Medicare
 Amount |   | % |       | Third
 Party
 Payers
 Amount |  | %   |   | Self-pay
 Amount |        | % |  | HMO
 Amount |   | % |      
|                       |  |               |        |   |  |                  |   |   |       |                              |  |     |   |                  |        |   |  |             |   |   |      
|1-30 days              |  | $             | 26,789 |   |  | 62               | % | $ | 5,833 |                              |  | 64  | % | $                | 12,663 |   |  | 60          | % | $ | 4,904 |  |  | 51  | % | $ | 3,389 |  |  | 98  | %
|31-60 days             |  |               | 5,855  |   |  | 14               | % |   | 609   |                              |  | 7   | % |                  | 3,046  |   |  | 14          | % |   | 2,149 |  |  | 22  | % |   | 51    |  |  | 2   | %
|61-90 days             |  |               | 3,649  |   |  | 8                | % |   | 613   |                              |  | 7   | % |                  | 1,709  |   |  | 8           | % |   | 1,323 |  |  | 14  | % |   | 4     |  |  |    | %
|91-120 days            |  |               | 2,465  |   |  | 6                | % |   | 370   |                              |  | 4   | % |                  | 1,379  |   |  | 7           | % |   | 711   |  |  | 8   | % |   | 5     |  |  |    | %
|121-150 days           |  |               | 1,476  |   |  | 3                | % |   | 327   |                              |  | 4   | % |                  | 811    |   |  | 4           | % |   | 331   |  |  | 3   | % |   | 7     |  |  |    | %
|Greater than 150 days* |  |               | 2,917  |   |  | 7                | % |   | 1,396 |                              |  | 14  | % |                  | 1,366  |   |  | 7           | % |   | 145   |  |  | 2   | % |   | 10    |  |  |    | %
|                       |  |               |        |   |  |                  |   |   |       |                              |  |     |   |                  |        |   |  |             |   |   |       |  |  |     |   |   |       |  |  |     |  
|Totals                 |  | $             | 43,151 |   |  | 100              | % | $ | 9,148 |                              |  | 100 | % | $                | 20,974 |   |  | 100         | % | $ | 9,563 |  |  | 100 | % | $ | 3,466 |  |  | 100 | %
|                       |  |               |        |   |  |                  |   |   |       |                              |  |     |   |                  |        |   |  |             |   |   |       |  |  |     |   |   |       |  |  |     |  

|                        |  |               |        |   |  |                  |   |   |       |                              |  |     |   |                  |        |   |  |             |   |   |       |  |  |     |   |   |       |  |  |     |  
|----------------------- |  | ------------- | ------ | - |  | ---------------- | - | - | ----- | ---------------------------- |  | --- | - | ---------------- | ------ | - |  | ----------- | - | - | ----- |  |  | --- | - | - | ----- |  |  | --- | -
|As of July 31, 2010     |  | Total
 Amount |        | % |  | Medicare
 Amount |   | % |       | Third
 Party
 Payers
 Amount |  | %   |   | Self-pay
 Amount |        | % |  | HMO
 Amount |   | % |      
|                        |  |               |        |   |  |                  |   |   |       |                              |  |     |   |                  |        |   |  |             |   |   |      
|1-30 days               |  | $             | 21,678 |   |  | 66               | % | $ | 2,886 |                              |  | 57  | % | $                | 10,846 |   |  | 64          | % | $ | 4,242 |  |  | 59  | % | $ | 3,704 |  |  | 99  | %
|31-60 days              |  |               | 4,256  |   |  | 13               | % |   | 439   |                              |  | 9   | % |                  | 2,458  |   |  | 15          | % |   | 1,344 |  |  | 18  | % |   | 15    |  |  | 1   | %
|61-90 days              |  |               | 2,565  |   |  | 8                | % |   | 281   |                              |  | 6   | % |                  | 1,337  |   |  | 8           | % |   | 935   |  |  | 13  | % |   | 12    |  |  |    | %
|91-120 days             |  |               | 1,771  |   |  | 5                | % |   | 248   |                              |  | 5   | % |                  | 850    |   |  | 5           | % |   | 671   |  |  | 9   | % |   | 2     |  |  |    | %
|121-150 days            |  |               | 936    |   |  | 3                | % |   | 236   |                              |  | 4   | % |                  | 696    |   |  | 4           | % |   | 2     |  |  |    | % |   | 2     |  |  |    | %
|Greater than 150 days** |  |               | 1,733  |   |  | 5                | % |   | 967   |                              |  | 19  | % |                  | 711    |   |  | 4           | % |   | 52    |  |  | 1   | % |   | 3     |  |  |    | %
|                        |  |               |        |   |  |                  |   |   |       |                              |  |     |   |                  |        |   |  |             |   |   |       |  |  |     |   |   |       |  |  |     |  
|Totals                  |  | $             | 32,939 |   |  | 100              | % | $ | 5,057 |                              |  | 100 | % | $                | 16,898 |   |  | 100         | % | $ | 7,246 |  |  | 100 | % | $ | 3,738 |  |  | 100 | %
|                        |  |               |        |   |  |                  |   |   |       |                              |  |     |   |                  |        |   |  |             |   |   |       |  |  |     |   |   |       |  |  |     |  

|   |                                                                          
|-- | -------------------------------------------------------------------------
|*  | Total includes
 $1,178 fully reserved over 210 days as of April 30, 2011.
|   |                                                                          
|** | Total includes
 $805 fully reserved over 210 days as of July 31, 2010.   

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 on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

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. Write downs of inventories to market value
are based on a review of inventory quantities on hand and estimated sales
forecasts based on sales history and anticipated future demand. Unanticipated
changes in demand could have a significant impact on the value of our inventory
and require additional write downs of inventory which would impact our results
of operations.

29

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Goodwill and Indefinite-Lived Intangibles

Goodwill, representing the cost of acquired businesses in excess of the
fair value of net assets acquired, and indefinite-lived intangibles are not
amortized, but are evaluated annually for impairment. The Company performs its
annual impairment test as of the first day of its fiscal fourth quarter or on
an earlier date if indicators of potential impairment exist. Goodwill is
considered impaired if the carrying amount of the reporting unit exceeds its
estimated fair value. In assessing the recoverability of goodwill, the Company
reviews both quantitative as well as qualitative factors to support its
assumptions with regard to fair value. The fair value of a reporting unit,
which is based on geographic region, is estimated using both a discounted cash
flow model and weighted average multiple of revenues and earnings before
interest, taxes, depreciation and amortization.

In determining fair value, the Company makes certain judgments,
including the identification of reporting units and the selection of comparable
companies. Trademarks are considered impaired if the carrying amount exceeds
their estimated fair value. The fair value of the trademarks is estimated based
on a discounted cash flow model. If these estimates or their related
assumptions change in the future as a result of changes in strategy and/or
market conditions, the Company may be required to record an impairment charge.
To date, there has been no impairment charges recorded.

Intangible Assets

Intangible assets (exclusive of patents), arose primarily from
acquisitions and primarily consist of customer relationships, trademarks,
licenses, employment and non-compete agreements, and website and database
content. Finite-lived intangible assets are amortized according to their
estimated useful lives, which range from 4 to 15 years. The Company has
capitalized certain legal costs directly incurred in pursuing patent
applications as patent costs. When such applications result in an issued
patent, the related costs are amortized over a ten year period or the life of
the patent, whichever is shorter, using the straight-line method. The Company
reviews its issued patents and pending patent applications, and if it
determines to abandon a patent application or that an issued patent no longer
has economic value, the unamortized balance relating to that patent is
immediately expensed.

Accrual for Self-funded Medical

Accruals for self-funded medical insurance are determined based on a number
of assumptions and factors, including historical payment trends, claims history
and current estimates. These estimated liabilities are not discounted. If
actual trends differ from these estimates, the financial results could be
impacted. As of April 30, 2011, the Company has established a reserve of $0.4
million, which is included in accrued liabilities, for claims that have been
reported but not paid and for claims incurred but not reported.

Recent Accounting Pronouncements

In October 2009, the FASB issued a Consensus of the FASB Emerging
Issues Task Force relating to Multiple Deliverable Revenue Arrangements.This standard provides application
guidance on whether multiple deliverables exist, how the deliverables should be
separated and how the consideration should be allocated to one or more units of
accounting. This update establishes a selling price hierarchy for determining
the selling price of a deliverable. The selling price used for each deliverable
will be based on vendor-specific objective evidence, if available, third-party
evidence if vendor-specific objective evidence is not available, or estimated
selling price if neither vendor-specific or third-party evidence is available.
This guidance is effective for revenue arrangements entered into or materially
modified in fiscal years beginning on or after June 15, 2010. The Company
adopted this guidance effective August 1, 2010 which did not have an effect on
its consolidated results of operations and financial condition.

30

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Item 3. Quantitative
and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in foreign currency exchange
rates and, to a much lesser extent, interest rates on investments in short-term
instruments, which could impact our results of operations and financial
position. We do not currently engage in any hedging or market risk management
tools. There have been no material changes with respect to market risk
previously disclosed in our Annual Report on Form 10-K for our 2010 fiscal
year.

Foreign Currency Exchange Rate Risk

The financial reporting of our non-U.S.
subsidiaries is denominated in currencies other than the U.S. dollar. Since the
functional currency of our non-U.S. subsidiaries is the local currency, foreign
currency translation adjustments are accumulated as a component of accumulated
other comprehensive income in stockholders equity. Assuming a hypothetical
aggregate change of 10% in the exchange rates of foreign currencies against the
U.S. dollar at April 30, 2011, our assets and liabilities would increase or
decrease by $2.1 million and $0.9 million, respectively, and our net sales and
net (loss) or earnings would increase or decrease by $1.6 million and $0.1
million, respectively, on an annual basis.

We also maintain intercompany balances and
loans receivable with subsidiaries with different local currencies. These
amounts are at risk of foreign exchange losses if exchange rates fluctuate.
Assuming a hypothetical aggregate change of 10% in the exchange rates of
foreign currencies against the U.S. dollar at April 30, 2011, our pre-tax
earnings would be favorably or unfavorably impacted by approximately $0.3
million, on an annual basis.

Interest Rate Risk

Our excess cash is invested in highly liquid short term money market
funds and short term investments in U.S. Treasury bills. Changes in interest
rates may affect the investment income we earn on money market funds and short
term investments and therefore affect our cash flows and results of operations.
As of April 30, 2011, we were exposed to interest rate change market risk with
respect to our money market accounts and short term investments totaling $20.2
million. The money market accounts and short-term investments yield or bear
interest rates ranging from 0% to 0.4%. As of April 30, 2011, based on the
investments held, it is determined that we have no material interest rate risk.

As of April 30, 2011, we did not maintain any fixed or variable
interest rate financing.

Item 4. Controls
and Procedures

(a)
Evaluation of Disclosure Controls and Procedures

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

(b) Changes
in Internal Controls over Financial Reporting

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

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PART
II  OTHER INFORMATION

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

There have been no other material developments with respect to
previously reported legal proceedings discussed in the annual report on Form
10-K for the fiscal year ended July 31, 2010 filed with the Securities and
Exchange Commission except as discussed in Note 13.

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

There have been no material changes from the risk factors disclosed in
Part 1, Item 1, of the Companys Annual Report on Form 10-K for the fiscal year
ended July 31, 2010.

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

|             |  |                                                                                                            
|------------ |  | -----------------------------------------------------------------------------------------------------------
|Exhibit
 No. |  | Exhibit                                                                                                    
|             |  |                                                                                                            
|31.1         |  | Certification of
 Elazar Rabbani, Ph.D. pursuant to Section 302 of the Sarbanes-Oxley Act of
 2002.        
|             |  |                                                                                                            
|31.2         |  | Certification of
 Barry Weiner pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                  
|             |  |                                                                                                            
|32.1         |  | Certification of
 Elazar Rabbani, Ph.D. pursuant to 18 U.S.C. §1350, as adopted pursuant to
 Section 906 of
|             |  | the Sarbanes-Oxley
 Act of 2002.                                                                           
|             |  |                                                                                                            
|32.2         |  | Certification of
 Barry Weiner pursuant to 18 U.S.C. §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: June 9, 2011 | by:                | /s/ Barry Weiner                                                              
|                   |                    |                                                                               
|                   |                    | Chief Financial Officer, Principal Accounting Officer, Treasurer and
 Director

32

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