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

Mark one

|                                                                      |  |                                                             
|--------------------------------------------------------------------- |  | ------------------------------------------------------------
|x                                                                     |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF         
|                                                                      |  | THE SECURITIES EXCHANGE ACT OF 1934                         
|                                                                      |  |                                                             
|For the quarterly
    period ended October 31, 2007                  
|                                                                      |  |                                                             
|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.

Yesþ      Noo

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

Large accelerated filero            Accelerated
filerþ            Non-
accelerated filero

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

Yeso      Noþ

As of December 1, 2007 the Registrant had approximately 36,719,000 shares of common stock outstanding.



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|           |    |                                                                                |    | 
|---------- | -- | ------------------------------------------------------------------------------ | -- | 
|           |    | ENZO BIOCHEM, INC.                                                             |    | 
|           |    | FORM 10-Q                                                                      |    | 
|           |    | October 31, 2007                                                               |    | 
|           |    |                                                                                |    | 
|           |    | INDEX                                                                          |    | 
|          
|           |    | PART I - FINANCIAL INFORMATION                                                 |    | 
|Item 1.    |    | Financial Statements                                                           |    | 
|           |    |                                                                                |    | 
|           |    | Consolidated Balance Sheets                                                    |    | 
|           |    | October 31, 2007 (unaudited) and July 31, 2007                                 | 3  | 
|           |    |                                                                                |    | 
|           |    | Consolidated Statements of Operations                                          |    | 
|           |    | For the three months ended October 31, 2007 and 2006 (unaudited)               | 4  | 
|           |    |                                                                                |    | 
|           |    | Consolidated Statement of Stockholders Equity and Comprehensive Income (Loss) |    | 
|           |    | For the three months ended October 31, 2007 (unaudited)                        | 5  | 
|           |    |                                                                                |    | 
|           |    | Consolidated Statements of Cash Flows                                          |    | 
|           |    | For the three months ended October 31, 2007 and 2006 (unaudited)               | 6  | 
|           |    |                                                                                |    | 
|           |    | Notes to Consolidated Financial Statements                                     | 7  | 
|           |    |                                                                                |    | 
|Item 2.    |    | Management's Discussion and Analysis of                                        |    | 
|           |    | Financial Condition and Results of Operations                                  | 16 | 
|           |    |                                                                                |    | 
|Item 3.    |    | Quantitative and Qualitative Disclosures About Market Risk                     | 27 | 
|           |    |                                                                                |    | 
|Item 4.    |    | Controls and Procedures                                                        | 28 | 
|           |    |                                                                                |    | 
|           |    | Part II  OTHER INFORMATION                                                    |    | 
|           |    |                                                                                |    | 
|Item 1.    |    | Legal Proceedings                                                              | 28 | 
|           |    |                                                                               
|Item 1A.   |    | Risk Factors                                                                   | 28 | 
|           |    |                                                                                |    | 
|Item 6.    |    | Exhibits                                                                       | 28 | 
|           |    |                                                                               
|Signatures | 29 |                                                                               

2

---



|                                                                       |                       |             |   |             |           |   |          | 
|---------------------------------------------------------------------- | --------------------- | ----------- | - | ----------- | --------- | - | -------- | 
|Part 1                                                                 | Financial Information |             |   |             |           |   |         
|Item 1                                                                 | Financial Statements  |             |   |             |           |   |         
|                                                                      
|                                                                      
|ENZO BIOCHEM, INC.                                                    
|CONSOLIDATED BALANCE SHEETS                                           
|(in thousands, except share data)                                     
|                                                                      
|ASSETS                                                                 |                       |             |   | October 31, |           |   | July 31, | 
|                                                                       |                       |             |   | 2007        |           |   | 2007     | 
|Current assets:                                                        |                       | (unaudited) |   |             | (audited) |  
|Cash and cash equivalents                                              |                       | $ 103,786   |   |             | $ 105,149 |  
|Accounts receivable, net of allowances                                 |                       | 14,534      |   |             | 14,353    |  
|Inventories                                                            |                       | 6,413       |   |             | 7,022     |  
|Prepaid expenses                                                       |                       | 1,637       |   |             | 1,767     |  
|Total current assets                                                   |                       | 126,370     |   |             | 128,291   |  
|                                                                      
|Property, plant, and equipment, net                                    |                       | 6,695       |   |             | 6,621     |  
|Goodwill                                                               |                       | 13,908      |   |             | 13,676    |  
|Intangible assets, net                                                 |                       | 9,217       |   |             | 9,338     |  
|Other                                                                  |                       | 1,194       |   |             | 1,076     |  
|Total assets                                                           |                       | $ 157,384   |   |             | $ 159,002 |  
|                                                                      
|LIABILITIES AND STOCKHOLDERS' EQUITY                                   |                       |             |   |             |           |  
|                                                                      
|Current liabilities:                                                   |                       |             |   |             |           |  
|Accounts payable - trade                                               |                       | $ 3,747     |   |             | $ 4,111   |  
|Accrued liabilities                                                    |                       | 7,698       |   |             | 8,446     |  
|Other current liabilities                                              |                       | 1,311       |   |             | 1,287     |  
|Deferred taxes                                                         |                       | 417         |   |             | 597       |  
|Total current liabilities                                              |                       | 13,173      |   |             | 14,441    |  
|                                                                      
|Deferred revenue                                                       |                       | 825         |   |             | 938       |  
|Deferred taxes                                                         |                       | 1,945       |   |             | 1,729     |  
|                                                                      
|Commitments and contingencies                                          |                       |             |   |             |           |  
|                                                                      
|Stockholders' equity:                                                  |                       |             |   |             |           |  
|Preferred Stock, $.01 par value; authorized 25,000,000 shares; no      |                       |             |   |             |           |  
|shares issued or outstanding                                           |                       |            |   |             |          |  
|Common Stock, $.01 par value; authorized 75,000,000 shares; shares     |                       |             |   |             |           |  
|issued: 37,317,722 at October 31, 2007 and 37,280,723 at July 31, 2007 |                       | 373         |   |             | 372       |  
|Additional paid-in capital                                             |                       | 296,641     |   |             | 295,899   |  
|Less treasury stock at cost: 600,620 shares at October 31, 2007        |                       |             |   |             |           |  
|and 596,456 shares at July 31, 2007                                    |                       | (8,989      | ) |             | (8,915    | )
|Accumulated deficit                                                    |                       | (146,736    | ) |             | (145,504  | )
|Accumulated other comprehensive income                                 |                       | 152         |   |             | 42        |  
|Total stockholders' equity                                             |                       | 141,441     |   |             | 141,894   |  
|Total liabilities and stockholders' equity                             |                       | $ 157,384   |   |             | $ 159,002 |  

3

The accompanying notes are an integral part ofthese consolidated financial statements

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

|                                                |  |                    |   |  |          |  
|----------------------------------------------- |  | ------------------ | - |  | -------- | -
|                                                |  | Three Months Ended
|                                                |  | October
    31,   
|                                                |  | 2007               |   |  | 2006     |  
|Revenues:                                       |  |                    |   |  |          |  
|Product revenues                                |  | $ 5,863            |   |  | $ 1,092  |  
|Royalty and license fee income                  |  | 2,318              |   |  | 1,297    |  
|Clinical laboratory services                    |  | 11,266             |   |  | 8,053    |  
|                                                |  | 19,447             |   |  | 10,442   |  
|                                               
|Costs and expenses and other (income):          |  |                    |   |  |          |  
|Cost of product revenues                        |  | 4,434              |   |  | 609      |  
|Cost of clinical laboratory services            |  | 5,131              |   |  | 3,496    |  
|Research and development expense                |  | 1,703              |   |  | 1,862    |  
|Selling, general, and administrative expense    |  | 7,404              |   |  | 5,517    |  
|Provision for uncollectible accounts receivable |  | 1,159              |   |  | 914      |  
|Legal expense                                   |  | 2,449              |   |  | 2,156    |  
|Interest income                                 |  | (1,460             | ) |  | (911     | )
|Other income                                    |  | (26                | ) |  | (2,000   | )
|                                                |  | 20,794             |   |  | 11,643   |  
|                                               
|Loss before income taxes                        |  | (1,347             | ) |  | (1,201   | )
|Benefit (provision) for income taxes            |  | 115                |   |  | (45      | )
|Net loss                                        |  | ($ 1,232           | ) |  | ($ 1,246 | )
|                                               
|Net loss income per common share:               |  |                    |   |  |          |  
|Basic                                           |  | ($ 0.03            | ) |  | ($ 0.04  | )
|Diluted                                         |  | ($ 0.03            | ) |  | ($ 0.04  | )
|                                               
|Weighted average common shares outstanding:     |  |                    |   |  |          |  
|Basic                                           |  | 36,717             |   |  | 32,279   |  
|Diluted                                         |  | 36,717             |   |  | 32,279   |  

4

The accompanying notes are an integral part ofthese consolidated financial statements

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ENZO BIOCHEM, INC
  CONSOLIDATED STATEMENT OF STOCKHOLDERS  EQUITYAND COMPREHENSIVE INCOME (LOSS)Three months ended October 31, 2007(UNAUDITED)(In thousands, except share data)

|                                                                                            |  |            |  |          |  |        |     |            |   |          |   |             |    |                   |   |               |    |                       |   |  |             |     |  |   |         |   |  |        |  
|------------------------------------------------------------------------------------------- |  | ---------- |  | -------- |  | ------ | --- | ---------- | - | -------- | - | ----------- | -- | ----------------- | - | ------------- | -- | --------------------- | - |  | ----------- | --- |  | - | ------- | - |  | ------ | -
|                                                                                            |  |            |  |          |  |        |     |            |   |          |   |             |    |                   |   |               |    |                       |   |  | Accumulated |     |  |   |         |   |  |       
|                                                                                            |  | Common     |  | Treasury |  | Common |     | Additional |   | Treasury |   |             |    |                   |   | Other         |    | Total                 |   |  |            
|                                                                                            |  | Stock      |  | Stock    |  | Stock  |     | Paid-in    |   | Stock    |   | Accumulated |    | Comprehensive     |   | Stockholders' |    | Comprehensive        
|                                                                                            |  | Shares     |  | Shares   |  | Amount |     | Capital    |   | Amount   |   | Deficit     |    | (Loss)
    Income |   | Equity        |    | income
        (loss)
|Balance at July 31,
        2007                                                            |  | 37,280,723 |  | 596,456  |  | $      | 372 |            | $ | 295,899  |   |             | ($ | 8,915             | ) |               | ($ | 145,504               | ) |  | $           | 42  |  | $ | 141,894 |   |  |        |  
|                                                                                           
|Net loss for the three
        months ended October 31, 2007                                |  |            |  |          |  |        |     |            |   |          |   |             |    |                   |   |               | ($ | 1,232                 | ) |  |             |     |  |   | (1,232  | ) |  | (1,232 | )
|Purchase of treasury
        stock                                                          |  |            |  | 4,164    |  |        |     |            |   |          |   |             |    | (74               | ) |               |    |                       |   |  |             |     |  |   | (74     | ) |  |        |  
|Exercise of stock options                                                                   |  | 36,399     |  |          |  |        | 1   |            |   | 422      |   |             |    |                   |   |               |    |                       |   |  |             |     |  |   | 423     |   |  |        |  
|Vesting of restricted
        stock                                                         |  | 600        |  |          |  |        |     |            |   |          |   |             |    |                   |   |               |    |                       |   |  |             |     |  |   |         |   |  |        |  
|Stock based compensation
        charges                                                    |  |            |  |          |  |        |     |            |   | 332      |   |             |    |                   |   |               |    |                       |   |  |             |     |  |   | 332     |   |  |        |  
|Common stock issuance
        costs adjustment                                              |  |            |  |          |  |        |     |            |   | (12      | ) |             |    |                   |   |               |    |                       |   |  |             |     |  |   | (12     | ) |  |        |  
|Foreign currency translation
        adjustments                                            |  |            |  |          |  |        |     |            |   |          |   |             |    |                   |   |               |    |                       |   |  |             | 110 |  |   | 110     |   |  | 110    |  
|Comprehensive loss                                                                          |  |            |  |          |  |        |     |            |   |          |   |             |    |                   |   |               |    |                       |   |  |             |     |  |   |         |   |  | (1,122 | )
|Balance at October 31,
        2007                                                         |  | 37,317,722 |  | 600,620  |  | $      | 373 |            | $ | 296,641  |   |             | ($ | 8,989             | ) |               | ($ | 146,736               | ) |  | $           | 152 |  | $ | 141,441 |   |  |        |  
|                                                                                           
|5                                                                                          
|                                                                                           
|The accompanying
    notes are an integral part of these consolidated financial statements.

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

|                                                                     |  |                    |   |      |          |  
|-------------------------------------------------------------------- |  | ------------------ | - | ---- | -------- | -
|                                                                     |  | Three Months Ended
|                                                                     |  | October 31,       
|                                                                     |  | 2007               |   | 2006
|Cash flows from operating activities:                                |  |                    |   |      |          |  
|Net loss                                                             |  | ($ 1,232           | ) |      | ($ 1,246 | )
|                                                                     |  |                    |   |      |          |  
|Adjustments to reconcile
      net loss to net cash                  |  |                    |   |      |          |  
|(used in) provided by
      operating activities:                    |  |                    |   |      |          |  
|Depreciation and amortization
      of property, plant and equipment |  | 328                |   |      | 251      |  
|Amortization of intangible
      assets                              |  | 121                |   |      | 20       |  
|Provision for uncollectible
      accounts receivable                |  | 1,159              |   |      | 914      |  
|Writeoff and/or reserve
      taken for obsolete inventory           |  | 62                 |   |      | -        |  
|Deferred income tax benefit                                          |  | (166               | ) |      | -        |  
|Share based compensation
      charges                               |  | 332                |   |      | 370      |  
|Deferred revenue recognized                                          |  | (113               | ) |      | -        |  
|Other                                                                |  | 52                 |   |      | 9        |  
|                                                                     |  |                    |   |      |          |  
|Changes in operating assets
      and liabilities:                   |  |                    |   |      |          |  
|Accounts receivable                                                  |  | (1,317             | ) |      | (559     | )
|Inventories                                                          |  | 580                |   |      | 37       |  
|Prepaid expenses                                                     |  | 135                |   |      | 441      |  
|Recoverable and prepaid
      income taxes                           |  | -                  |   |      | 124      |  
|Other assets                                                         |  | 1                  |   |      | -        |  
|Accounts payable - trade                                             |  | (382               | ) |      | 88       |  
|Accrued liabilities                                                  |  | (758               | ) |      | 1,731    |  
|Other current liabilities                                            |  | 27                 |   |      | 160      |  
|Total Adjustments                                                    |  | 61                 |   |      | 3,586    |  
|                                                                     |  |                    |   |      |          |  
|Net cash (used in) provided
      by operating activities            |  | (1,171             | ) |      | 2,340    |  
|                                                                     |  |                    |   |      |          |  
|Cash flows from investing
      activities:                          |  |                    |   |      |          |  
|Capital expenditures                                                 |  | (402               | ) |      | (158     | )
|Increase in cash surrender
      value                               |  | (96                | ) |      | (146     | )
|Increase in security deposits
      and other assets                 |  | (24                | ) |      | (9       | )
|Acquistion costs paid                                                |  | (37                | ) |      | -        |  
|Net cash used in investing
      activities                          |  | (559               | ) |      | (313     | )
|                                                                     |  |                    |   |      |          |  
|Cash flows from financing
      activities:                          |  |                    |   |      |          |  
|Proceeds from the exercise
      of stock options                    |  | 349                |   |      | 79       |  
|Net cash provided by financing
      activities                      |  | 349                |   |      | 79       |  
|                                                                     |  |                    |   |      |          |  
|Effect of exchange rate
      changes on cash and cash equivalents   |  | 18                 |   |      | -        |  
|                                                                     |  |                    |   |      |          |  
|Increase (decrease) in
      cash and cash equivalents               |  | (1,363             | ) |      | 2,106    |  
|Cash and cash equivalents
      - beginning of period                |  | 105,149            |   |      | 69,854   |  
|Cash and cash equivalents
      - end of period                      |  | $ 103,786          |   |      | $ 71,960 |  

6

The accompanying notes are an integral part ofthese consolidated financial statements

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ENZO BIOCHEM, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of October 31, 2007and for the three month periods endedOctober 31, 2007 and 2006(Unaudited)

Note 1 - Basis of Presentation

The accompanying  consolidated financial statements
include the accounts of Enzo Biochem, Inc. and its
wholly-owned subsidiaries, Enzo Clinical Labs, Enzo Life Sciences, Enzo  Therapeutics
and Enzo Realty LLC, collectively
referred to as the Company or Companies. Effective May
31, 2007, Enzo Life Sciences, Inc. completed the acquisition of all of the outstanding
capital stock of Axxora Life Sciences, Inc (Axxora). The consolidated
balance sheet as of October 31,  2007, statement of stockholders equity
and comprehensive income (loss) for the three months ended October 31, 2007 and
the consolidated statements of operations and statements of cash flows for the
three month periods ended October 31, 2007 and 2006 are unaudited. In the opinion
of management, all adjustments (which include normal recurring adjustments) necessary
to present fairly the financial position and operating results for the interim
periods have been made. Certain information and footnote disclosure, normally
included in financial statements prepared in accordance with accounting principles
generally accepted in the United States, have been condensed or omitted. The
consolidated financial statements should be read in conjunction with the consolidated
financial statements for the year ended July 31, 2007 and notes thereto contained
in the Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission. The consolidated balance sheet at July 31, 2007 has been derived
from the audited financial statements at that date. The results of operations
for the three months ended October 31, 2007 and 2006 are not necessarily indicative
of the results for the respective full years.

Recent Accounting Pronouncements

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

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157,Fair Value Measurements(SFAS 157).
SFAS 157 establishes a common definition of fair value of financial instruments, sets a framework for measuring fair value and expands disclosure about such fair value measurements. The Statement applies only to fair value measurements that are
already required or permitted by other accounting standards and is effective for fiscal years beginning after November 15, 2007. The Company does not believe that the adoption of FAS 157 will have a material effect on the Companys financial
statement disclosures.

7

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

Reclassifications

Certain amounts in prior year period have been reclassified to conform to current year presentation. In the fourth quarter of Fiscal 2007, the Company reclassified shipping and handling costs previously included in
selling expense to cost of sales. The shipping and handling costs reclassed were approximately $54,000 for the quarter ended October 31, 2006.

Note 2 - Acquisition

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

The following table presents the preliminary estimated
fair values of the assets acquired and liabilities assumed (in thousands) as
at October 31, 2007:

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

8

---



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

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

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

|                                               |  |                    |  
|---------------------------------------------- |  | ------------------ | -
|                                               |  | Three months ended |  
|In $000s                                      |  | October 31, 2006   |  
|Net revenues                                   |  | $ 14,572           |  
|Net loss                                       |  | (1,111             | )
|Net loss per common share  basic and diluted: |  | ($ 0.03            | )

Note 3  Net loss per
share

Basic net loss per common share is computed using the weighted average number of common shares outstanding during the three months ended October 31, 2007 and 2006. Diluted net loss per common shares is computed using
  the weighted average number of shares outstanding during the three months ended October 31, 2007 and 2006, and excludes the effect of dilutive potential common shares (consisting of employee stock options and unvested restricted stock awards) as
  their inclusion would be antidilutive.  Accordingly, basic and diluted net loss per share is the same during these periods.

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

|                                                  |  |             |  |            
|------------------------------------------------- |  | ----------- |  | -----------
|                                                  |  | October 31, |  | October 31,
|(In thousands)                                    |  | 2007        |  | 2006       
|Potential net shares, issued from exercise of in |  |             |  |            
|the money employee and director stock options    |  |             |  |            
|and restricted stock awards, excluded from        |  |             |  |            
|diluted net loss per share calculation            |  | 473         |  | 443        

9

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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.

|                                                    |  |             |  |            
|--------------------------------------------------- |  | ----------- |  | -----------
|                                                    |  | October 31, |  | October 31,
|(In thousands)                                      |  | 2007        |  | 2006       
|Out of the money employee
	    and director stock |  |             |  |            
|options                                             |  | 971         |  | 1,082      
|                                                   
|Note 4  Share-based compensation                   |  |             |  |            

The Company adopted SFAS No. 123(R), "Share-Based Payment" ("SFAS 123(R)") and related interpretations effective August 1, 2005. Compensation costs recognized in the three-month periods ended October 31, 2007 and 2006
include compensation costs for all share-based payments granted prior to, but not yet vested as of July 31, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and compensation costs for all
share-based payments granted subsequent to August 1, 2005, based on the grant fair value estimated in accordance with the provisions of SFAS 123(R).

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

|                                                      |  |                                |  |       
|----------------------------------------------------- |  | ------------------------------ |  | ------
|                                                      |  | Three months ended October 31,
|In thousands, except per share data                   |  | 2007                           |  | 2006  
|Stock options                                         |  | $ 71                           |  | $ 309 
|Restricted stock awards                               |  | 261                            |  | 61    
|Total                                                 |  | $ 332                          |  | $ 370 
|                                                     
|Impact on basic and diluted net loss per common share |  | $ 0.01                         |  | $ 0.01
|                                                     
|As included in the statements of operations           |  |                                |  |       
|Cost of product revenues                              |  | $     2                        |  | $    3
|Research and development                              |  | 4                              |  | 42    
|Selling, general and administrative                   |  | 326                            |  | 325   
|                                                      |  | $ 332                          |  | $ 370 

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

Stock option plans

A summary of the activity relating to the Companys stock option plans for the three month period ended October 31, 2007 is as follows:

|                              |  |           |   |  |                |  |                
|----------------------------- |  | --------- | - |  | -------------- |  | ---------------
|                              |  |           |   |  | Weighted       |  |                
|                              |  |           |   |  | Average        |  | Aggregate      
|                              |  | Options   |   |  | Exercise Price |  | Intrinsic Value
|Outstanding at August 1, 2007 |  | 2,700,457 |   |  | $ 13.32        |  | $ 4,262,000    
|Exercised                     |  | (36,399   | ) |  | $ 11.62        |  |                
|Outstanding at end of period  |  | 2,664,058 |   |  | $ 13.35        |  | $ 3,173,000    
|Exercisable at end of period  |  | 2,634,282 |   |  | $ 13.34        |  | $ 3,173,000    
|Available for grant at        |  |           |   |  |                |  |                
|October 31, 2007              |  | 578,000   |   |  |                |  |                

10

---



As of October 31, 2007, there was approximately $331,000 of total unrecognized compensation cost related to unvested stock option-based compensation, which will be recognized over a weighted average life of
approximately one year.

During the three months ended October 31, 2007 and 2006, the Company received cash proceeds of approximately $349,000 and $79,000, respectively, from the exercise of 30,017 and 6,700 stock options,
respectively.  The aggregate intrinsic value of stock options exercised during the three months ended October 31, 2007 and 2006, including the non-cash transactions (Note 5) was approximately $0.2 million and $0.1 million,
respectively.

Restricted Stock Awards

A summary of the activity pursuant to the Companys
restricted stock awards for the three months ended October 31, 2007 is as follows:

|                                |  |         |   |  |                 
|------------------------------- |  | ------- | - |  | ----------------
|                                |  |         |   |  | Weighted Average
|                                |  | Awards  |   |  | Award Price     
|Unvested at beginning of period |  | 141,062 |   |  | $ 14.15         
|Granted                         |  | 17,400  |   |  | $ 13.14         
|Vested                          |  | (600    | ) |  | $ 13.79         
|Forfeited                       |  | (6,000  | ) |  | $ 13.83         
|Unvested at end of period       |  | 151,862 |   |  | $ 14.05         

The fair value of a restricted stock award is determined based on the closing stock price on the grant date.  As of October 31, 2007, there was approximately $1,342,000 of total unrecognized compensation cost
related to unvested restricted stock-based compensation to be recognized over a weighted average period of one and a half years.

Note 5  Supplemental disclosure for statement of cash flows

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

|                            |  |                                |  |        |  
|--------------------------- |  | ------------------------------ |  | ------ | -
|                            |  | Three months ended October 31,
|                            |  | 2007                           |  | 2006   |  
|Taxes paid (refunded)  net |  | $ 83                           |  | $ (124 | )

During the three months ended October 31, 2007, certain officers of the Company exercised 6,382 stock options in a non-cash transaction. The officers surrendered 4,164 shares of previously acquired common stock to
exercise the stock options.  The Company recorded approximately $74,400, the market value of the surrendered shares, as treasury stock.

Note 6  Comprehensive loss

During the three months ended October 31, 2007 and 2006, total comprehensive loss was approximately $1.1 million and $1.2 million, respectively.

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

11

---



Note 7 - Inventories

Inventories, net of reserves of $428,000 and $379,000, respectively, consist of the following, as of:

|                  |  |                  |  |              
|----------------- |  | ---------------- |  | -------------
|(In thousands)    |  | October 31, 2007 |  | July 31, 2007
|Raw materials     |  | $       30       |  | $       34   
|Work in process   |  | 1,224            |  | 1,221        
|Finished products |  | 5,159            |  | 5,767        
|                  |  | $ 6,413          |  | $ 7,022      

Note 8  Goodwill
and intangible assets

The Companys goodwill, net of amortization as of October 31, 2007 is as follows:

|                                                               |  |         
|-------------------------------------------------------------- |  | --------
|In 000s                                                       |  |         
|Balance  July 31, 2007                                        |  | $ 13,676
|Additional purchase price adjustments arising from fiscal 2007 |  |         
|business combination in Life Science segment (Note 2)          |  | 232     
|Balance  October 31, 2007                                     |  | $ 13,908

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

|                                |  |                  |        |               |              |         |   |     |   |       |       |   |              |  |   |        |   |  |   |      
|------------------------------- |  | ---------------- | ------ | ------------- | ------------ | ------- | - | --- | - | ----- | ----- | - | ------------ |  | - | ------ | - |  | - | -----
|                                |  | October 31, 2007 |        | July 31, 2007
|                                |  |                  |        |               | Accumulated  |         |   |     |   |       |       |   | Accumulated  |  |   |       
|                                |  |                  | Gross  |               | Amortization |         |   | Net |   |       | Gross |   | Amortization |  |   | Net   
|Finite-lived intangible assets: |  |                  |        |               |              |         |   |     |   |       |       |   |              |  |   |        |   |  |   |      
|Patents                         |  | $                | 11,027 |               | $            | (9,869  | ) |     | $ | 1,158 |       | $ | 11,027       |  | $ | (9,849 | ) |  | $ | 1,178
|Customer relationships          |  |                  | 3,890  |               |              | (101    | ) |     |   | 3,789 |       |   | 3,890        |  |   | (36    | ) |  |   | 3,854
|Non-compete and                 |  |                  |        |               |              |         |   |     |   |       |       |   |              |  |   |        |   |  |   |      
|employment agreements           |  |                  | 360    |               |              | (38     | ) |     |   | 322   |       |   | 360          |  |   | (15    | ) |  |   | 345  
|Website and acquired content    |  |                  | 270    |               |              | (22     | ) |     |   | 248   |       |   | 270          |  |   | (9     | ) |  |   | 261  
|Indefinitely-lived intangible   |  |                  |        |               |              |         |   |     |   |       |       |   |              |  |   |        |   |  |   |      
|assets:                         |  |                  |        |               |              |         |   |     |   |       |       |   |              |  |   |        |   |  |   |      
|Trademarks                      |  | $                | 3,700  |               |              |        |   |     | $ | 3,700 |       |   | 3,700        |  |   |       |   |  |   | 3,700
|Total                           |  | $                | 19,247 |               | $            | (10,030 | ) |     | $ | 9,217 |       | $ | 19,247       |  | $ | (9,909 | ) |  | $ | 9,338

Note 9  Accrued liabilities and other current
liabilities

Accrued liabilities consist of:

|                                   |       |                  |       |              
|---------------------------------- | ----- | ---------------- | ----- | -------------
|In 000s                           |       | October 31, 2007 |       | July 31, 2007
|Legal                              |       | $ 2,981          |       | $ 4,542      
|Payroll, benefits, and commissions | 1,969 |                  | 1,417
|Research and development           |       | 511              |       | 344          
|Professional fees                  |       | 846              |       | 986          
|Outside reference lab testing      |       | 163              |       | 276          
|Other                              |       | 1,228            |       | 881          
|                                   |       | $ 7,698          |       | $ 8,446      

12

---



|                                      |  |                  |  |              
|------------------------------------- |  | ---------------- |  | -------------
|Other current liabilities consist of: |  |                  |  |              
|                                     
|In 000s                              |  | October 31, 2007 |  | July 31, 2007
|Deferred revenue                      |  | $ 830            |  | $ 770        
|Other                                 |  | 481              |  | 517          
|                                      |  | $ 1,311          |  | $ 1,287      

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 benefit (provision) for the three months ended October 31, 2007 was 8.5%, compared to (3.7%) during the three months ended October 31, 2006.

The tax benefit for the three months ended October 31, 2007 was based on state and local taxes and book to tax differences for acquired inventory and differed from the expected net operating loss carryforward benefit
at the U.S. federal statutory rate of 34% primarily due to the inability to recognize such benefit.  The carryforward benefit cannot be recognized because of uncertainties relating to future taxable income, in terms of both its timing and its
sufficiency.

The Company's effective tax rate for the three months ended October 31, 2006 was based on state and local taxes, and differed from the expected net operating loss benefit at the U.S. federal statutory rate of 34%
primarily due the inability to recognize such benefit. The carry forward benefit cannot be recognized because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency, which would enable the Company to
realize the federal carryforward benefit

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

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

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

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

13

---



Note 11  Other income

The Company as plaintiff and Sigma Aldrich (Sigma) entered into a Settlement Agreement and Release effective September 15, 2006 (the Settlement). Pursuant to the Settlement, the Companys
litigation with Sigma was dismissed and the Company recognized a $2 million gain on patent litigation settlement in the accompanying consolidated statement of operations for the three months ended October 31, 2006.

Note 12  Royalty and licensing income

In fiscal 2005, the Company as plaintiff finalized and executed a settlement and license agreement with Digene Corporation to settle a patent litigation lawsuit (the Agreement).  Subsequent to the
settlement, the Agreement provides for the Company to receive quarterly running royalties on the net sales of Digene products subject to the license until the expiration of the patent in April 2018. During the three months ended October 31, 2007 and
2006, the Company recorded approximately $1.9 million and $1.3 million, respectively, in royalties from the Agreement.  Digene was acquired by QIAGEN N.V. in July 2007.

During the three months ended October 31, 2007, the Company recorded approximately $0.4 million in royalties and license fee income under a licensing agreement with Abbott Molecular, Inc. (Abbott)
entered into in the third quarter of fiscal 2007.

Note 13  Segment reporting

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

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

14

---



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

|                                                |  |               |   |  |              |   |  |               |   |  |          |   |  |              |  
|----------------------------------------------- |  | ------------- | - |  | ------------ | - |  | ------------- | - |  | -------- | - |  | ------------ | -
|Three months ended October 31, 2007            
|                                               
|Revenues:                                       |  | Life Sciences |   |  | Therapeutics |   |  | Clinical Labs |   |  | Other    |   |  | Consolidated |  
|Product revenues                                |  | $ 5,863       |   |  | --           |   |  | --            |   |  | --       |   |  | $ 5,863      |  
|Royalty and license fee income                  |  | 2,318         |   |  |              |   |  |               |   |  |          |   |  | 2,318        |  
|Clinical laboratory services                    |  | --            |   |  | --           |   |  | $ 11,266      |   |  | --       |   |  | 11,266       |  
|                                                |  | 8,181         |   |  | --           |   |  | 11,266        |   |  | --       |   |  | 19,447       |  
|                                               
|Costs and expenses and other (income):          |  |               |   |  |              |   |  |               |   |  |          |   |  |              |  
|Cost of product revenues                        |  | 4,434         |   |  | --           |   |  | --            |   |  | --       |   |  | 4,434        |  
|Cost of clinical laboratory services            |  | --            |   |  | --           |   |  | 5,131         |   |  | --       |   |  | 5,131        |  
|Research and development                        |  | 803           |   |  | 900          |   |  | --            |   |  | --       |   |  | 1,703        |  
|Provision for uncollectible accounts receivable |  | --            |   |  | --           |   |  | 1,159         |   |  | --       |   |  | 1,159        |  
|Selling, general and administrative and legal   |  | 1,880         |   |  | --           |   |  | 3,601         |   |  | $ 4,372  |   |  | 9,853        |  
|Interest income                                 |  | --            |   |  | --           |   |  | (67           | ) |  | (1,393   | ) |  | (1,460       | )
|Other income                                    |  | (26           | ) |  | --           |   |  | --            |   |  | --       |   |  | (26          | )
|                                               
|Income (loss) before income taxes               |  | $ 1,090       |   |  | $ (900       | ) |  | $ 1,442       |   |  | $ (2,979 | ) |  | $ (1,347     | )
|                                               
|Depreciation and amortization included above    |  | $ 192         |   |  | $ 7          |   |  | $ 211         |   |  | $ 39     |   |  | $ 449        |  
|                                               
|Share-based compensation included in above:     |  |               |   |  |              |   |  |               |   |  |          |   |  |              |  
|Cost of product revenues                        |  | $    2        |   |  | --           |   |  | --            |   |  | --       |   |  | 2            |  
|Research and development                        |  | 4             |   |  | --           |   |  | --            |   |  | --       |   |  | $     4      |  
|Selling, general and administrative and legal   |  | 31            |   |  | --           |   |  | $ 54          |   |  | $ 241    |   |  | 326          |  
|Total                                           |  | $  37         |   |  | --           |   |  | $ 54          |   |  | $ 241    |   |  | $ 332        |  
|                                               
|Capital expenditures                            |  | $ 114         |   |  | $ 8          |   |  | $ 253         |   |  | $ 27     |   |  | $ 402        |  
|                                               
|                                               
|Three months ended October 31, 2006            
|                                               
|Revenues:                                       |  | Life Sciences |   |  | Therapeutics |   |  | Clinical Labs |   |  | Other    |   |  | Consolidated |  
|Product revenues                                |  | $ 1,092       |   |  | --           |   |  | --            |   |  | --       |   |  | $ 1,092      |  
|Royalty and license fee income                  |  | 1,297         |   |  |              |   |  |               |   |  |          |   |  | 1,297        |  
|Clinical laboratory services                    |  | --            |   |  | --           |   |  | $ 8,053       |   |  | --       |   |  | 8,053        |  
|                                                |  | 2,389         |   |  | --           |   |  | 8,053         |   |  | --       |   |  | 10,442       |  
|                                               
|Costs and expenses and other (income):          |  |               |   |  |              |   |  |               |   |  |          |   |  |              |  
|Cost of product revenues                        |  | 609           |   |  | --           |   |  | --            |   |  | --       |   |  | 609          |  
|Cost of clinical laboratory services            |  | --            |   |  | --           |   |  | 3,496         |   |  | --       |   |  | 3,496        |  
|Research and development                        |  | 830           |   |  | $ 1,032      |   |  | --            |   |  | --       |   |  | 1,862        |  
|Provision for uncollectible accounts receivable |  | --            |   |  | --           |   |  | 914           |   |  | --       |   |  | 914          |  
|Selling, general and administrative and legal   |  | 444           |   |  | --           |   |  | 3,276         |   |  | $ 3,953  |   |  | 7,673        |  
|Interest income                                 |  | --            |   |  | --           |   |  | --            |   |  | (911     | ) |  | (911         | )
|Other income                                    |  | (2,000        | ) |  | --           |   |  | --            |   |  | --       |   |  | (2,000       | )
|                                               
|Income (loss) before income taxes               |  | $ 2,506       |   |  | $ (1,032     | ) |  | $ 367         |   |  | $ (3,042 | ) |  | $ (1,201     | )
|                                               
|Depreciation and amortization included above    |  | $ 48          |   |  | $ 3          |   |  | $ 211         |   |  | $ 9      |   |  | $ 271        |  
|                                               
|Share-based compensation included in above:     |  |               |   |  |              |   |  |               |   |  |          |   |  |              |  
|Cost of product revenues                        |  | $ 3           |   |  | --           |   |  | --            |   |  | --       |   |  | $ 3          |  
|Research and development                        |  | 13            |   |  | $ 29         |   |  | --            |   |  | --       |   |  | 42           |  
|Selling, general and administrative and legal   |  | 13            |   |  | --           |   |  | $ 86          |   |  | $ 226    |   |  | 325          |  
|Total                                           |  | $ 29          |   |  | $ 29         |   |  | $ 86          |   |  | $ 226    |   |  | $ 370        |  
|                                               
|Capital expenditures                            |  | $ 43          |   |  | $ 8          |   |  | $ 107         |   |  | $ --     |   |  | $ 158        |  

15

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

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

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

Overview

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

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

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

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

Enzo Clinical Labsis a regional clinical laboratory to the New York Metropolitan and New Jersey areas. The Company believes this allows
us to capitalize firsthand on our extensive advanced molecular and cytogenetic capabilities and the broader trends in predictive diagnostics. Enzo Clinical Labs offers a menu of routine and esoteric clinical laboratory tests or procedures used in
general patient care by physicians to establish or support a diagnosis, monitor treatment or medication, and search for an otherwise undiagnosed condition. We operate a full-service clinical laboratory in Farmingdale, New York, a network of 19
patient service centers, a stand alone stat or rapid response laboratory in New York City, and a full-service phlebotomy department.

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

16

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

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

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

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

Recent Developments
     Axxora Life Science, Inc. Acquisition

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

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

17

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Results of OperationsThree months ended October 31, 2007 as compared to October 31, 2006

|                                                                  |  |           |   |      |          |            |  |          |   |  |     |   
|----------------------------------------------------------------- |  | --------- | - | ---- | -------- | ---------- |  | -------- | - |  | --- | --
|Comparative Financial Data for the Three Months Ended October 31, |  |           |   |      |          |            | 
|                                                                 
|(in 000s)                                                        |  |           |   |      |          |            |  | Increase |   |  |    
|Revenues:                                                         |  | 2007      |   | 2006 |          | (Decrease) |  | % Change
|Product sales                                                     |  | $  5,863  |   |      | $  1,092 |            |  | $  4,771 |   |  | 437 | % 
|Royalty and license fee income                                    |  | 2,318     |   |      | 1,297    |            |  | 1,021    |   |  | 79  |   
|Clinical laboratory services                                      |  | 11,266    |   |      | 8,053    |            |  | 3,213    |   |  | 40  |   
|Total revenues                                                    |  | 19,447    |   |      | 10,442   |            |  | 9,005    |   |  | 86  |   
|                                                                 
|Costs and expenses and other (income):                            |  |           |   |      |          |            |  |          |   |  |     |   
|Cost of products                                                  |  | 4,434     |   |      | 609      |            |  | 3,825    |   |  | 628 | % 
|Cost of laboratory services                                       |  | 5,131     |   |      | 3,496    |            |  | 1,635    |   |  | 47  |   
|Research and development                                          |  | 1,703     |   |      | 1,862    |            |  | (159     | ) |  | (9  | ) 
|Selling, general and administrative                               |  | 7,404     |   |      | 5,517    |            |  | 1,887    |   |  | 34  |   
|Provision for uncollectible accounts receivable                   |  | 1,159     |   |      | 914      |            |  | 245      |   |  | 27  |   
|Legal expenses                                                    |  | 2,449     |   |      | 2,156    |            |  | 293      |   |  | 14  |   
|Interest income                                                   |  | (1,460    | ) |      | (911     | )          |  | (549     | ) |  | 60  |   
|Other income                                                      |  | (26       | ) |      | (2,000   | )          |  | 1,974    |   |  | -   |   
|Total costs and expenses - net                                    |  | 20,794    |   |      | 11,643   |            |  | 9,151    |   |  | 79  |   
|                                                                 
|Loss before income taxes                                          |  | ($  1,347 | ) |      | ($ 1,201 | )          |  | ($   146 | ) |  | (12 | )%

Consolidated Results:

The 2008 period and
    the 2007 period refer to the fiscal three months ended October
31, 2007 and 2006, respectively.

Product revenues
during three months ended October 31, 2007 were $5.9 million compared to $1.1
million in the year ago period, an increase of $4.8
million or 437%. The increase is due to the inclusion of Axxora product sales
of $5.1 million for the quarter ended October 31, 2007 partially offset by
a decline of $0.3 million in the 2008 period over the 2007 period product
sales of Enzo Life Sciences New York (New
York) products.

Royalty and license fee income during three months ended October 31, 2007 was $2.3 million compared to $1.3 million in the year ago period, an increase of $1.0 million or 79%.
Royalties are earned from net sales of Digene products subject to a license and from a License Agreement with Abbott which was entered into in the third quarter of fiscal 2007. During three months ended October 31, 2007, the Company recognized
royalties of approximately $1.9 million from Digene, an increase of approximately $0.6 million over the prior year ago period, and royalties and license fees of approximately $0.4 million under the Abbott License Agreement. There are no
expenses relating to royalty and license fee income.

Clinical laboratory revenues during three months ended October 31, 2007 were $11.3 million compared to $8.1 million in the 2007 period, an increase of $3.2
million or 40%. The Company experienced an increase in service revenues during
the 2008 period primarily due to an expansion of an insurance provider agreement
with United Healthcare in January 2007, which was partially offset by an increase
in the contractual adjustment, which reduced gross billings by 80.6% as compared
to 76.9% in the 2007 period. The increase in the contractual adjustment is due
to continued competitive pricing throughout the industry which has negatively
impacted reimbursement rates for tests.

18

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The cost of product revenues during the three months ended October 31, 2007 was $4.4 million compared to $0.6 million in the 2007 period, an increase of $3.8 million. The
increase is primarily due to the inclusion of Axxoras cost of product revenues of approximately $4.0 million for the quarter ended October 31, 2007, which includes the impact of an inventory fair value adjustment of $0.6 million
related to sales of inventory acquired from Axxora.  Gross profit margin was also negatively affected during the 2008 period as compared to the 2007 period by the decline in product revenues relating to New York products.

The cost of clinical laboratory services during the three months ended October 31, 2007 was $5.1 million as compared to $3.5 million in the prior period, an increase of $1.6
million or 47%. Due to the increased volume of patients serviced and tests performed, the Company incurred increased costs primarily relating to reagent costs of $0.9 million, laboratory personnel costs of $0.4 million, and outside testing
costs of $0.2 million.

Research and development
expenses were approximately $1.7 million during the three months ended October
31, 2007, compared to $1.9 million in the 2007 period, a decrease of
$0.2 million or 9%.  The decrease was primarily due to a decrease at the
Therapeutic segment of $0.2
million in clinical trial activities and payroll and payroll related costs and
a decrease of $0.1 million in supplies and related costs
at Enzo Life Sciences  New York, partially offset by
the inclusion of research and development incurred by Axxora of $0.1 million.

Selling, general and administrative expenses were approximately $7.4 million during the three months ended October 31, 2007 as compared to $5.5 million in the 2007 period, an
increase of $1.9 million or 34%.  Included in the 2008 period is approximately $1.5 million of selling, general and administrative expenses related to Axxoras operations.  The expense increases for the other Companies operations
were in consulting, payroll and payroll related personnel costs of $0.4 million.

The provision for uncollectible accounts receivable, relating to the clinical laboratory segment was $1.2 million for the three months ended October 31, 2007, compared to $0.9
million during the year ago period, a increase of $0.3 million or 27% and is due to the increase in clinical laboratory revenue of 40% and the composition of patients being serviced.

Legal expense was $2.4 million during the three months ended October 31, 2007 compared to $2.1 million in the year ago period, an increase of $0.3 million or 14%, due to an
increase in ongoing patent litigation.

Interest income increased by $0.5 million or 60% to $1.5 million during the three months ended October 31, 2007 compared to $0.9 million during the 2007 period. The increase
was due to higher invested cash generated from the proceeds from the Registered Direct Offerings of common stock in December 2006 and February 2007. The net cash proceeds from these fiscal 2007 offerings were $57.0 million. The Company earns
interest by investing primarily in short term (30 to 90 days) commercial paper with high credit ratings and money market funds.

Other income was $26,000
during the three months ended October 31, 2007 versus $2.0 million in the
year ago period. During the 2007 period, the Company recognized a $2.0
million gain on a patent litigation settlement.

The Company's effective tax rate benefit (provision) for the three months ended October 31, 2007 was 8.5%, compared to (3.7%) during the three months ended October 31, 2006.

19

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The tax benefit for the three months ended October 31, 2007 was based on state and local taxes and book to tax differences for inventory acquired from Axxora and differed from the expected net operating loss
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.

The tax provision for the three months ended October 31, 2006 was based on state and local taxes, and differed from the expected net operating loss benefit at the U.S. federal statutory rate of 34% primarily due the
inability to recognize such benefit. The carry forward benefit cannot be recognized because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency, which would enable the Company to realize the federal
carryforward benefit.

Segment Results

The Life Sciences
segments income before taxes was approximately $1.1 million for the
three months ended October 31, 2007 as compared to $2.5 million in the 2007
period. The  decrease is primarily due to the Companys $2.0 million
patent litigation settlement with Sigma Aldrich in the 2007 period, partially
offset by an increase in royalties and license fee income in the 2008 period.
Revenues from product  shipments increased by $4.8 million due to the inclusion
of products sales of $5.1 million in the 2008 period from Axxora, offset by
declines in New York product unit shipments. Royalty and license fee income increased $1.0
million from the existing Digene agreement and the Abbott License Agreement entered
into in the third quarter of fiscal 2007. The segments gross margin of $3.7
million was negatively impacted by $0.6 million representing the fair value
 adjustment attributed to the sale of inventory acquired from Axxora. Segment
operating expenses, such as selling, general and administrative, increased by
approximately $1.4 million during the 2008 period due to the inclusion of $1.5
 million of Axxoras expenses for the three months ended October 31, 2007,
 offset primarily by lower payroll and related expenses for the New York operations.

The Therapeutics
segments loss before income taxes was approximately $0.9 million for
the three months ended October 31, 2007 as compared to a loss of $1.1
million for the 2007 period. The decrease in the loss of $0.2 million was
primarily due to decreases in clinical trial activities, consulting, payroll
and payroll related costs.

The Clinical Laboratory segments income before taxes was $1.4 million for the three months ended October 31, 2007 as compared to $0.4 million in the 2007 period.  The 2008
period was positively impacted by an increase in laboratory service revenues of $3.2 million or 40%, due to the expansion of an insurance provider agreement effective January 2007, which increased gross profit by approximately $1.6 million.
The increase in gross profit was offset by an increase in the provision for uncollectible accounts receivable for the three months ended October 31, 2007 of approximately $0.3 million over the 2007 period. The increase in the provision for
uncollectible accounts receivable and other operating expenses of $.3 million is attributed to the 40% increase in service revenues.

The Other segments
loss before taxes for the three months ended October 31, 2007 of approximately $3.0
million was comparable to the operating loss in the 2007 period. The Other segments
2008 period loss reflects an increase in general and administrative expenses
of $0.2 million and legal expenses of $0.3 million offset by an increase
in interest income of $0.5 million due to increased invested cash
balances generated from the issuance of common stock in fiscal 2007. The increase
in legal costs is attributed to ongoing patent litigation.

20

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Liquidity and Capital Resources

At October 31, 2007, our cash and cash equivalents were $103.8 million, a decrease of $1.4 million from cash and cash equivalents at July 31, 2007.  The decrease in cash during the three months ended October
31, 2007 was primarily due to the cash flow impacts discussed below. The Company had working capital of $113.2 million at October 31, 2007 compared to $113.9 million at July 31, 2007. The decrease in working capital was primarily the result
of the decrease in cash and cash equivalents and other changes in current assets of $1.9 million offset by a decrease in current liabilities of approximately $1.2 million due to the timing of disbursements for trade payables and accrued
expenses during the three month period.

Net cash used in operating activities for the three months ended October 31, 2007 was approximately $1.2 million as compared to net cash provided by operating activities of $2.3 million for the three months
ended October 31, 2006. The increase in net cash used by operating activities in the 2008 period over the 2007 period of $3.5 million was primarily due to changes in operating assets and liabilities including: accounts receivable, accounts
payable and accrued liabilities.

Net cash used in investing activities was approximately $0.6 million as compared to $0.3 million in the year ago period, primarily due to an increase in capital expenditures.

Net cash provided financing activities was approximately $0.3
million versus net cash provided by investing activities of $0.1
million in the year ago period due to an increase in the proceeds from exercise
of stock options.

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

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

Critical Accounting Policies

General

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

21

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Product revenues

Revenues  from product sales are  recognized
when the products are shipped and title transfers, the sales price is fixed or
determinable and collectibility is reasonably assured. The revenue from the non-exclusive
distribution agreements are recognized when shipments are made to their respective
customers and reported to the Company. The Company has certain non-exclusive
distribution agreements, which provide for consideration to be paid to the distributors
for the manufacture of certain products. The Company records such consideration
provided to distributors under these non-exclusive  distribution agreements as
a reduction to product revenues. The Company did not recognize any
revenue from these distributors during the 2008 and 2007 periods.
During the quarter ended October 31, 2007, one
customer in the Life Science segment represented 16% of total product revenues.

Royalties

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

License fees and multiple element arrangements

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

Revenues - Clinical laboratory services

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

The following is a table of the Clinical Labs segments net revenues and percentages by revenue category for the three months ended October 31, 2007 and 2006:

|                  |  |                    |  |                    |   |            |         |        |     |  
|----------------- |  | ------------------ |  | ------------------ | - | ---------- | ------- | ------ | --- | -
|Net revenues      |  | Three months ended |  | Three months ended
|                  |  | October 31, 2007   |  | October 31, 2006  
|Revenue category  |  | (In 000s)         |  | (in %)             |   | (In 000s) |         | (in %)
|Medicare          |  | 2,145              |  | 19                 |   |            | $ 1,954 |        | 24  |  
|Third-party payer |  | 6,508              |  | 58                 |   |            | 5,011   |        | 62  |  
|Patient self-pay  |  | 1,516              |  | 13                 |   |            | 632     |        | 8   |  
|HMOs             |  | 1,097              |  | 10                 |   |            | 456     |        | 6   |  
|Total             |  | $ 11,266           |  | 100                | % |            | $ 8,053 |        | 100 | %

The Company provides services to certain patients covered by various third-party payers, including the Federal Medicare program. Revenue, net of contractual adjustments, from direct billings under the Federal Medicare
program during the three months ended October 31, 2007 and 2006 were approximately 19% and 24%, respectively, of the clinical lab segments revenue.  Laws and regulations governing Medicare are complex and subject to interpretation for which
action for noncompliance includes fines, penalties and exclusion from the Medicare programs.

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

22

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Other than the Medicare program, one provider
whose programs are included in the Third-party payer and Health
Maintenance Organizations (HMOs) categories represents
25% of the  Clinical Labs services net revenue for the three months ended October
31, 2007. Other than the Medicare program, no other provider included in the Third-party
payer and HMOs categories exceeded 10% of the Clinical Labs services
net  revenue for the three months ended October 31, 2006.

Contractual Adjustment

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

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

During the three months ended October 31, 2007
and 2006, the contractual adjustment percentages, determined using current and
historical reimbursement statistics, were 80.6% and 76.9%, 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 an increase in the number of tests we perform. However,
there can be no assurance that we can increase the number of tests we perform
or that if we do increase the number of tests we perform, that we can maintain
that higher number of tests performed, or that an increase in the number of tests
we perform would result in increased revenue.

The Company estimates (by using
    a sensitivity analysis) that each 1% point change in the contractual adjustment
    percentage could have resulted in a change in Clinical Labs services revenues
    of approximately $580,000 for
  the three months ended October 31, 2007, and could have resulted in a change
  in the net accounts receivable of approximately $325,000 as of October 31,
  2007.

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

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

23

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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 laboratory segments net receivables are detailed by billing category and as a percent to its total net receivables.
At October 31, 2007 and July 31, 2007, approximately 66% and 69%, respectively, of the Companys net accounts receivable relates to its clinical laboratory business, which operates in the New York Metropolitan and New Jersey Metropolitan areas.

The Life Sciences segments accounts receivable, of which $1.8 million or 36% and $1.8 million or 39% represents foreign receivables as of October 31, 2007 and July 31, 2007 respectively, includes
royalties and license fee income receivables of $2.3 and $1.8 million, as of October 31, 2007 and July 31, 2007, respectively, of which approximately $1.9 and $1.5 million, respectively is from Digene Corporation (Note
12).

|                          |  |                  |  |               |   |            |          |        |     |  
|------------------------- |  | ---------------- |  | ------------- | - | ---------- | -------- | ------ | --- | -
|Net accounts receivable   |  | As of            |  | As of        
|                          |  | October 31, 2007 |  | July 31, 2007
|Billing category          |  | (In 000s)       |  | (in %)        |   | (In 000s) |          | (in %)
|Clinical laboratory       |  |                  |  |               |   |            |          |        |     |  
|Medicare                  |  | $ 1,770          |  | 19            | % |            | $ 1,628  |        | 17  | %
|Third-party payers        |  | 4,561            |  | 48            |   |            | 5,856    |        | 60  |  
|Patient self-pay          |  | 2,824            |  | 30            |   |            | 1,678    |        | 17  |  
|HMOs                     |  | 408              |  | 3             |   |            | 671      |        | 6   |  
|Total Clinical laboratory |  | $ 9,563          |  | 100           | % |            | $ 9,833  |        | 100 | %
|Total Life Sciences       |  | 4,971            |  |               |   |            | 4,520    |        |     |  
|Total accounts receivable |  | $ 14,534         |  |               |   |            | $ 14,353 |        |     |  

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

|                                                |  |                  |   |               |         |  
|----------------------------------------------- |  | ---------------- | - | ------------- | ------- | -
|In 000s                                        |  | October 31, 2007 |   | July 31, 2007
|Beginning balance                               |  | $ 1,404          |   |               | $ 1,033 |  
|Provision for uncollectible accounts receivable |  | 1,159            |   |               | 4,653   |  
|Write-offs                                      |  | (1,324           | ) |               | (4,282  | )
|Ending balance                                  |  | $ 1,239          |   |               | $ 1,404 |  

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 three months ended October 31, 2007 and 2006, the Company determined an allowance for doubtful accounts less than 210 days and wrote off 100% of accounts receivable over 210 days, as it
  assumed those accounts are uncollectible, except for certain fully reserved balances, principally related to Medicare, until the payers filing date deadline occurs.

24

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

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

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

The following tables indicate the Clinical Labs Aged Gross Receivables by Payer Group (in 000s), which is prior to adjustment to gross receivables for 1) contractual adjustment, 2) fully reserved balances not yet
written off and 3) other revenue adjustments.

|                           |  |   |        |  |     |   |  |   |          |  |     |   |  |   |        |  |     |   |  |   |          |  |     |   |  |   |        |  |     |  
|-------------------------- |  | - | ------ |  | --- | - |  | - | -------- |  | --- | - |  | - | ------ |  | --- | - |  | - | -------- |  | --- | - |  | - | ------ |  | --- | -
|                           |  |   |        |  |     |   |  |   |          |  |     |   |  |   | Third  |  |     |   |  |   |          |  |     |   |  |   |        |  |     |  
|                           |  |   |        |  |     |   |  |   |          |  |     |   |  |   | Party  |  |     |   |  |   |          |  |     |   |  |   |        |  |     |  
|(in
	      000s)          |  |   | Total  |  |     |   |  |   | Medicare |  |     |   |  |   | Payers |  |     |   |  |   | Self-pay |  |     |   |  |   | HMOs  |  |     |  
|As
    of October 31, 2007 |  |   | Amount |  | %   |   |  |   | Amount   |  | %   |   |  |   | Amount |  | %   |   |  |   | Amount   |  | %   |   |  |   | Amount |  | %   |  
|1-30 days                  |  | $ | 15,568 |  | 52  | % |  | $ | 3,609    |  | 45  | % |  | $ | 2,307  |  | 31  | % |  | $ | 6,907    |  | 62  | % |  | $ | 2,745  |  | 84  | %
|31-60 days                 |  |   | 4,087  |  | 14  | % |  |   | 723      |  | 9   | % |  |   | 1,369  |  | 18  | % |  |   | 1,833    |  | 16  | % |  |   | 162    |  | 5   | %
|61-90 days                 |  |   | 3,075  |  | 10  | % |  |   | 1,007    |  | 12  | % |  |   | 1,072  |  | 15  | % |  |   | 870      |  | 8   | % |  |   | 126    |  | 4   | %
|91-120 days                |  |   | 2,192  |  | 7   | % |  |   | 643      |  | 8   | % |  |   | 814    |  | 11  | % |  |   | 657      |  | 6   | % |  |   | 78     |  | 2   | %
|121-150 days               |  |   | 1,808  |  | 6   | % |  |   | 496      |  | 6   | % |  |   | 759    |  | 10  | % |  |   | 471      |  | 4   | % |  |   | 82     |  | 3   | %
|Greater than 150 days* .   |  |   | 3,258  |  | 11  | % |  |   | 1649     |  | 20  | % |  |   | 1,120  |  | 15  | % |  |   | 430      |  | 4   | % |  |   | 59     |  | 2   | %
|Totals                     |  | $ | 29,988 |  | 100 | % |  | $ | 8,127    |  | 100 | % |  | $ | 7,441  |  | 100 | % |  | $ | 11,168   |  | 100 | % |  | $ | 3,252  |  | 100 | %
|                          
|                           |  |   |        |  |     |   |  |   |          |  |     |   |  |   | Third  |  |     |   |  |   |          |  |     |   |  |   |        |  |     |  
|                           |  |   |        |  |     |   |  |   |          |  |     |   |  |   | Party  |  |     |   |  |   |          |  |     |   |  |   |        |  |     |  
|(in 000s)                 |  |   | Total  |  |     |   |  |   | Medicare |  |     |   |  |   | Payers |  |     |   |  |   | Self-pay |  |     |   |  |   | HMOs  |  |     |  
|As of July 31, 2007        |  |   | Amount |  | %   |   |  |   | Amount   |  | %   |   |  |   | Amount |  | %   |   |  |   | Amount   |  | %   |   |  |   | Amount |  | %   |  
|1-30 days                  |  | $ | 18,120 |  | 50  |   |  | $ | 3,630    |  | 40  |   |  | $ | 2,309  |  | 30  |   |  | $ | 8,561    |  | 59  |   |  | $ | 3,620  |  | 69  |  
|31-60 days                 |  |   | 5,306  |  | 15  |   |  |   | 614      |  | 7   |   |  |   | 1,434  |  | 19  |   |  |   | 2,731    |  | 19  |   |  |   | 527    |  | 10  |  
|61-90 days                 |  |   | 3,795  |  | 10  |   |  |   | 629      |  | 7   |   |  |   | 1,222  |  | 16  |   |  |   | 1,735    |  | 12  |   |  |   | 209    |  | 4   |  
|91-120 days                |  |   | 2,811  |  | 8   |   |  |   | 530      |  | 6   |   |  |   | 732    |  | 10  |   |  |   | 881      |  | 6   |   |  |   | 668    |  | 13  |  
|121-150 days               |  |   | 1,589  |  | 4   |   |  |   | 405      |  | 4   |   |  |   | 779    |  | 10  |   |  |   | 263      |  | 2   |   |  |   | 142    |  | 2   |  
|Greater than 150 days** .  |  |   | 4,760  |  | 13  |   |  |   | 3,246    |  | 36  |   |  |   | 1,173  |  | 15  |   |  |   | 226      |  | 2   |   |  |   | 115    |  | 2   |  
|Totals                     |  | $ | 36,381 |  | 100 | % |  | $ | 9,054    |  | 100 | % |  | $ | 7,649  |  | 100 | % |  | $ | 14,397   |  | 100 | % |  | $ | 5,281  |  | 100 | %

|*  | Total includes $1,041 fully reserved over 210 days as of October 31, 2007.
|-- | --------------------------------------------------------------------------
|  
|** | Total includes $2,432 fully reserved over 210 days as of July 31, 2007.   
|  

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Income Taxes

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

On August 1, 2007, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48).
The interpretation requires that we determine whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authority. If a tax position meets the more likely than not recognition criteria, FIN
48 requires that the tax position be measured at the largest amount of benefit greater than 50 percent likely of being realized upon ultimate settlement. The adoption of FIN 48 has not had a material effect on our financial condition or results of
operations.

Inventory

The Company values inventory at the lower of cost (first-in, first-out) or market. Work-in-process and finished goods inventories consist of material, labor, and manufacturing overhead.  On a quarterly basis, we review
inventory quantities on hand and analyze the provision for excess and obsolete inventory based on our estimate of sales forecasts based on sales history and anticipated future demand.  Our estimate of future product demand may not be accurate and we
may understate or overstate the provision for excess and obsolete inventory.  Accordingly, unanticipated changes in demand could have a significant impact on the value of our inventory and results of operations. At October 31, 2007 and July 31,
2007, respectively, the reserve for excess and obsolete inventory was $428,000 and $379,000.

Recent Accounting Pronouncements

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

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157,Fair Value Measurements(SFAS 157).
SFAS 157 establishes a common definition of fair value of financial instruments sets a framework for measuring fair value and expands disclosure about such fair value measurements. The Statement applies only to fair value measurements that are
already required or permitted by other accounting standards and is effective for fiscal years beginning after November 15, 2007. The Company does not believe that the adoption of FAS 157 will have a material effect on the Companys financial
statement disclosures.

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Rate Risk

The financial reporting of our non-US. subsidiaries
is denominated in currencies other than the U.S. dollar. Since the functional
currency of our non-US. subsidiaries is the local currency, foreign currency
translation  adjustments are accumulated as a component of accumulated other
comprehensive income in stockholders equity.
Assuming a hypothetical aggregate change of 10% in the exchange rates of foreign
currencies against the U.S. dollar at October 31, 2007, our assets and liabilities
would increase or decrease by approximately $1,425,000 and $510,000, respectively,
and our net sales and net earnings would increase or decrease by approximately
$1,194,000 and $39,000, respectively, on an annual basis. We also maintain intercompany
balances and loans receivable with subsidiaries with different local currencies.
These amounts are at risk of foreign exchange losses if exchange rates fluctuate.
Assuming a hypothetical aggregate change of 10% in the exchange rates of foreign
currencies against the U.S. dollar at October 31, 2007, our pre-tax earnings
would be favorably or unfavorably impacted by approximately $24,000 on an
annual basis.

Interest Rate Risk

Our excess cash is invested in highly liquid, short term (30  90 days) commercial paper and money market funds with high credit ratings. Changes in interest rates may affect the investment income we earn on cash
and cash equivalents debt and therefore affect our cash flows and results of operations. As of October 31, 2007, we were exposed to interest rate change market risk with respect to our short-term investments of $100.8 million. The short-term
investments earn interest ranging from 4.60% to 5.50% .  Each 100 basis point (or 1%) fluctuation in interest rates would increase or decrease interest income on the short-term investments by approximately $1 million on an annual
basis.

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Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

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

(b) Changes in Internal Controls over Financial Reporting

There was no change in the Companys internal controls over financial reporting during the Companys most recently completed fiscal period that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

PART II  OTHER INFORMATION

Item 1.     Legal Proceedings

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

Item 1A.     Risk Factors

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

Item 6.     Exhibits

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

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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: December 10, 2007 |  | by:/s/Barry Weiner     
|                        |  | Chief Financial Officer

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