Stock of Enzo Biochem Inc. soared on Wednesday after thecompany said its Enzo Diagnostics Inc. subsidiary has begunmarketing to the research community a test for direct detectionof the AIDS virus.
The Farmingdale, N.Y., company (AMEX:ENZ), which has been indefault on its bonds and was considering entering aprepackaged Chapter 11 settlement with bondholders, jumped$4.50 to close at $5.63.
Enzo spokeswoman Carol Dempster told BioWorld that thecompany intends to seek approval to market the test as adiagnostic, but could not provide an estimate of how long thatwould take. "We're in preclinical trials," Dempster said.
If approved for use outside the research labs, the HIVMicroplate Hybridization Assay could provide earlier detectionof the virus because the antibodies to HIV detected by otherdiagnostics may not appear for 12 months.
The test uses DNA probes to detect viral DNA extracted frominfected cells.
Enzo Diagnostics has devised the test to process many samplessimultaneously and automatically. Amplification of the verysmall amount of virus present early in infection is also possiblewith the test.
Enzo Biochem, which had been in default of its 9 percentsubordinated debentures due 2001, in August said it wouldpursue a pre-approved reorganization under Chapter 11 aspart of its settlement with the bondholders.
Dempster on Wednesday said the company was in the processof creating a new bond package to offer the debt holders. If alldebt holders don't agree to the package, she said, the companyhad secured sufficient agreement to go ahead with the Chapter11 settlement.
Under the Chapter 11 deal, some $30 million principle amountof debentures would be exchanged for new bonds convertibleto common stock at $5 a share. Interest and principle paymentsare tied to a variety of conditions.
The Enzo Diagnostics subsidiary would not be involved in therestructuring.
-- Roberta Friedman, Ph.D. Special to BioWorld
(c) 1997 American Health Consultants. All rights reserved.