Exhibit 10.1
SETTLEMENT AND LICENSE AGREEMENT
This SETTLEMENT AND LICENSE AGREEMENT (this
“
Agreement
”) is made and entered into as of the date of the last signature required by this Agreement (the “
Effective
Date
”) by and between Plaintiff
Enzo Life Sciences, Inc.,
a corporation organized and existing under the laws
of the State of New York, having offices at 10 Executive Boulevard, Farmingdale, NY 11735 (“
Enzo
”) and Defendant
Affymetrix, Inc.
, a corporation organized and existing under the laws of the State of Delaware, having offices at 3420 Central
Expressway, Santa Clara, CA 95051 (“
Affymetrix
”). Enzo and Affymetrix are individually referred to herein as
a “
Party
,” and collectively as the “
Parties
.”
WITNESSETH
WHEREAS, Enzo has alleged that Affymetrix infringes U.S. Patent
No. 7,064,197 (“the ‘197 patent”) in an action styled
Enzo Life Sciences, Inc. v. Affymetrix, Inc.
, No.
1:12-cv-433-LPS, pending in the United States District Court for the District of Delaware (the “Litigation”); and
WHEREAS, Affymetrix denies all liability in the Litigation;
and
WHEREAS, Affymetrix has alleged that it does not infringe the
‘197 patent, and further, that the ‘197 patent is invalid and unenforceable; and
WHEREAS, Enzo disputes Affymetrix’s allegations of invalidity,
unenforceability, and non-infringement; and
WHEREAS, the Parties now desire to settle the Litigation and
to provide and receive certain releases, licenses and covenants not to sue, all on the terms and conditions set forth herein; and
WHEREAS, this Agreement reflects a settlement and compromise
between the parties under Federal Rule of Evidence 408 with respect to Enzo’s claims and Affymetrix’s defenses in the
Litigation, including without limitation on the disputed issues of patent validity, enforceability, and infringement;
NOW, THEREFORE,
in consideration of the above recitals and the mutual covenants hereinafter contained, the Parties agree as follows:
SECTION 1: DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
“
Affiliate
” means, with respect to a Party,
all future wholly-owned subsidiaries of such Party that are created by the Party in the ordinary course of business or as a result
of an internal reorganization of the Party (e.g., not an acquisition of, acquisition by, or merger with another Person) and only
for so long as that entity is a wholly-owned subsidiary of such Party and any Person that, as of the Effective Date, is directly
or indirectly controlling, controlled by, or under common control with, such Party. For purposes of this Agreement, “control”
means the ability to control the direction of the management and operations of the subject Person, whether through
ownership, contract or otherwise. Control will be presumed where
a Party has ownership of 50% or more of the outstanding voting shares of the Person. Notwithstanding anything to the contrary herein,
the following Persons are not, and cannot be considered, Affiliates of Affymetrix for the purposes of this Agreement so long as
any patent infringement litigation or royalty obligation concerning the Licensed Enzo Patent remains pending between Enzo and that
Person (or any Affiliate of that Person): Abbott Laboratories; Abbott Molecular, Inc.; Agilent Technologies, Inc.; Becton, Dickinson
and Company; Becton, Dickinson Diagnostics, Inc.; Geneohm Sciences, Inc. (now part of Becton Dickinson); Gen-Probe, Inc. (now part
of Hologic, Inc.); Hologic, Inc.; Illumina, Inc.; Life Technologies Corporation (now part of Thermo Fisher Scientific, Inc.); Roche
Molecular Systems, Inc. (part of Hoffmann-La Roche AG); Roche Diagnostics Corporation (part of Hoffmann-La Roche AG); Roche Diagnostics
Operations Inc. (part of Hoffmann-La Roche AG); and Roche Nimblegen, Inc. (part of Hoffmann-La Roche AG); or their respective Affiliates.
“
Licensed Affymetrix Products
” means any
past, current and future products and services, product lines, devices, systems, assays, components, kits, hardware, software,
or any combination of the foregoing which are made, used, sold, offered for sale, or imported by Affymetrix or its Affiliates that,
but for the license granted in this Agreement, would infringe a Valid Claim of the Licensed Enzo Patent.
“
Licensed Enzo Patent
” means (i) U.S. Patent
No. 7,064,197; (ii) any patents and patent applications claiming priority to or through, or sharing a common priority claim with,
any of the foregoing; and (iii) any foreign counterparts, re-issues, re-examinations, renewals, substitutes, claim amendments made
in post-grant proceedings including IPR and PGR proceedings, extensions, continuations, continuations-in-part, continuing prosecution
applications, divisionals, and national phase filings of any patents and patent applications covered in subparts (i) and (ii).
“
Person
” means an individual, trust, corporation,
partnership, joint venture, limited liability company, association, unincorporated organization, or other legal entity.
“
Third Party
” means any Person or entity
other than the Parties to this Agreement and their Affiliates.
“
Covered Third Party Accused Products
” means
Third Party products and services that include as an element thereof any Licensed Affymetrix Products.
“
Valid Claim
” means a claim of an issued
patent that has not expired or been finally held invalid or unenforceable by a court or administrative body of competent jurisdiction
from which no appeal can be or is taken.
SECTION 2: LICENSE, RELEASES, AND COVENANTS
2.1
License
. Subject to the terms and conditions hereof,
including Affymetrix’s timely payment of the Payment under Section 3.1, Enzo hereby grants to Affymetrix and its Affiliates
a fully paid-up non-exclusive, non-transferable (except as set forth in Section 5), worldwide license under the Licensed Enzo Patent
to make, have made, use, import, export, distribute, sell, offer for
sale, and practice all processes and methods in connection with,
the Licensed Affymetrix Products.
Affymetrix shall not have the right to sublicense or otherwise
grant, in whole or in part, licenses under the Licensed Enzo Patent. The license granted herein shall not extend to cover any products
of a Third Party that acquires or is acquired by Affymetrix or its Affiliates (whether by merger, consolidation, share acquisition,
or acquisition of all or substantially all assets or otherwise), including without limitation for products made, used, imported,
exported, distributed, sold, offered for sale, developed, advertised, and practiced by such Third Party before the date of such
acquisition. The license granted herein shall not include any rights to the Licensed Enzo Patent other than those expressly provided
by this section. No license or immunity is granted under this Agreement by Enzo, either directly or by implication, estoppel, or
otherwise, to any Person acquiring Licensed Affymetrix Products for the modification or combination by such Person of Licensed
Affymetrix Products with other items other than in the ordinary manner in the ordinary course of use of Licensed Affymetrix Products,
or as specified in Sections 2.2 and 2.3, or as otherwise permitted by the law of patent exhaustion.
2.2
Enzo Release of Affymetrix
. Subject to the terms
and conditions hereof, including Affymetrix’s timely payment of the Payment under Section 3.1, Enzo, on behalf of itself
and its Affiliates, releases, acquits and absolutely and forever discharges Affymetrix and its Affiliates, and each of their officers,
directors, managers, employees, agents, and attorneys (“Affymetrix Released Persons”) from any claim, counterclaim,
demand, allegation, damage, loss, debt, liability, account, reckoning, indemnity, obligation, cost, expense, lien, attorneys’
fee, any other action or cause of action of any kind or nature, whether now known or unknown, suspected or unsuspected, matured
or unmatured, asserted or unasserted, in law or equity, for (i) infringement of the Licensed Enzo Patent to the extent related
to the business of Affymetrix and occurring before the Effective Date; (ii) the claims, defenses, and counterclaims asserted in,
and the conduct of, the Litigation; and (iii) the conduct of settlement negotiations (except for representations or obligations
expressly included in this Agreement). Enzo also provides a limited release to customers, distributors, or users of any Licensed
Affymetrix Products for any claim, based on conduct occurring before the Effective Date, of infringement of the Enzo Licensed Patent
by Licensed Affymetrix Products and Covered Third Party Accused Products but only to the extent that Affymetrix’s own conduct
with respect to such customer, distributor, or user infringement would give rise to a colorable claim against Affymetrix for direct
or indirect infringement under 35 U.S.C. §§ 271(a), (b), (c), and/or (f) (and/or a claim based on the same types of indirect
infringement theories asserted against Affymetrix in the Litigation) but for the licenses, releases, and covenants granted to Affymetrix
herein. For the avoidance of doubt, to the extent any customers, distributors, or users of any Licensed Affymetrix Product infringe
the Enzo Licensed Patent for any reason that would not also give rise to a colorable claim against Affymetrix for direct or indirect
infringement under 35 U.S.C. §§ 271(a), (b), (c), and/or (f) (and/or a claim based on the same types of indirect infringement
theories asserted against Affymetrix in the Litigation) but for the licenses, releases, and covenants granted to Affymetrix herein,
such infringement is not released hereunder.
The scope of this release is fixed as of the Effective Date.
Except as expressly set forth herein, this release shall not apply to any Person, including without limitation any Third Party,
or any
business, assets, or products thereof, acquired by Affymetrix
or its Affiliates (whether by merger, consolidation, share acquisition, or acquisition of all or substantially all assets or otherwise)
after the Effective Date.
2.3
Limited Enzo Covenant Not To Sue On Covered Third Party
Accused Products
. Subject to the terms and conditions hereof, including Affymetrix’s timely payment of the Payment under
Section 3.1, Enzo, on behalf of itself and its Affiliates, covenants during the term of this Agreement not to sue Affymetrix’s
distributors, customers, and users for (i) infringement of the Licensed Enzo Patent by a Licensed Affymetrix Product, or (ii) infringement
of the Licensed Enzo Patent by a Covered Third Party Accused Product using or containing a Licensed Affymetrix Product, but only
to the extent that Affymetrix’s own conduct with respect to such customer, distributor, or user infringement would give rise
to a colorable claim against Affymetrix for direct or indirect infringement under 35 U.S.C. §§ 271(a), (b), (c), and/or
(f) (and/or a claim based on the same types of indirect infringement theories asserted against Affymetrix in the Litigation) but
for the licenses, releases, and covenants granted to Affymetrix herein. For the avoidance of doubt, to the extent any customers,
distributors, or users of any Licensed Affymetrix Product infringe the Enzo Licensed Patent for any reason that would not also
give rise to a colorable claim against Affymetrix for direct or indirect infringement under 35 U.S.C. §§ 271(a), (b),
(c), and/or (f) (and/or a claim based on the same types of indirect infringement theories asserted against Affymetrix in the Litigation)
but for the licenses, releases, and covenants granted to Affymetrix herein, this covenant does not apply. This covenant not to
sue is non-assignable by Affymetrix or by any of Affymetrix’s distributors, customers, and users who benefit from this covenant
not to sue.
2.4
Affymetrix Release of Enzo
. Affymetrix, on behalf
of itself and its Affiliates, releases, acquits and absolutely and forever discharges Enzo and its Affiliates, and each of their
officers, directors, shareholders, managers, employees, agents, and attorneys from any claim, counterclaim, demand, allegation,
damage, loss, debt, liability, account, reckoning, indemnity, obligation, cost, expense, lien, attorneys’ fee, any other
action or cause of action of any kind or nature, whether now known or unknown, suspected or unsuspected, matured or unmatured,
asserted or unasserted, in law or equity, arising out of or related to: (i) infringement of the Licensed Enzo Patent to the extent
occurring before the Effective Date; (ii) the claims and defenses asserted in, and the conduct of, the Litigation; and (iii) the
conduct of settlement negotiations (except for representations or obligations expressly included in this Agreement).
2.5
Covenant Not to Challenge
. After the Effective Date
and for so long as Affymetrix’s license is in force, Affymetrix further covenants that, except as (1) required by law or
(2) in defense of an action for infringing the Licensed Enzo Patent brought against it or its Affiliates, or against its or their
agents, representatives, suppliers, vendors, contractors, manufacturers, distributors, licensees, resellers, licensees, users,
and customers (direct or indirect) involving any Licensed Affymetrix Products, it shall not knowingly and voluntarily contest (or
assist in the contest) in any forum, including Federal Courts, whether under 28 U.S.C. §§ 2201-2202 or not, the United
States Patent and Trademark Office, and/or the International Trade Commission, that the Licensed Enzo Patent is valid and enforceable;
provided, however, nothing in this Agreement shall prevent Affymetrix or its Affiliates from complying with or responding to any
court or governmental order or subpoena relating to the Licensed Enzo Patent. Notwithstanding the
foregoing, nothing in this Agreement will preclude Affymetrix
and its Affiliates from making any disclosure, providing information or producing documents as required by law, court order or
legal process (including, without limitation, litigation related to discovery and/or subpoena), even if made in connection with
a proceeding challenging the validity or enforceability of one or more of the Licensed Enzo Patent, and any such disclosure will
not be considered a breach of this Agreement. It is understood that Affymetrix’s and its Affiliates’ providing factual
statements regarding Licensed Affymetrix Products or any Third Party products containing them in response to a validly propounded
subpoena will not be considered as assisting in the contest as used above. Affymetrix reserves the right to raise any and all defenses
and counterclaims, including, but not limited to, invalidity and unenforceability of the Licensed Enzo Patent, and to otherwise
contest the validity and enforceability of the Licensed Enzo Patent in any forum, that it could have raised in the Litigation,
if the Licensed Enzo Patent is asserted based on Licensed Affymetrix Products or Third Party products containing them against Affymetrix,
its Affiliates, customers, licensees, partners or users after the Effective Date; and Enzo reserves the right to raise any and
all claims and defenses in opposition.
2.6
Limited Standstill
. Each Party agrees that it shall
not, and that it shall cause each of its Affiliates or representatives not to, file or otherwise bring any action or lawsuit alleging
patent infringement against the other Party for a period of three (3) years after the Effective Date of this Agreement or until
the termination of this Agreement, whichever is earlier (“Standstill Period”). Nothing in this Section 2.6 shall enlarge
or otherwise modify the licenses, releases, or covenants set out in this Agreement. The foregoing provision is personal to the
Parties, is non-assignable (except as set forth in Section 5.2), and does not apply to any other Person. Further, it shall not
prevent either Party from engaging in discussions with the other Party or any other Person regarding the licensing of its patents
or from enforcing its patents against any Person other than a Party. During this Standstill Period, any patent infringement claim
that one Party has against the other shall be tolled and any damages will accrue and be recoverable to the full extent permitted
by 35 U.S.C. § 286. For clarity, nothing shall prevent the Parties from seeking damages after the Standstill Period terminates
for patent infringement occurring during the Standstill. If either Party violates this Standstill agreement, the other Party shall
be free to immediately end the Standstill Period. If a complaint for patent infringement is filed after expiration of the Standstill
Period, no Party may rely on the Standstill Period as a basis for any claim, counterclaim, or defense, including without limitation
an assertion of laches. Notwithstanding the foregoing, a Party still may assert any claim, counterclaim, or defense available,
including without limitation an assertion of laches, to the extent it does not specifically rely on the Standstill Period as a
basis. For the avoidance of doubt, nothing in this provision or any other provision of this Agreement shall prevent either Party
from intervening in patent litigation between the other Party and a Third Party based on any indemnity or other contractual obligation
that either Party owes to such Third Party.
2.7
Acquisitions
. The licenses, releases, and covenants
set forth above shall exclude any products of another Person that is acquired (whether by merger, consolidation, share acquisition,
or acquisition of all or substantially all assets or otherwise) by Affymetrix or its Affiliates on or after the Effective Date.
2.8
Modifications and Combinations In Manner Other Than Ordinary
Course
. No license or immunity is granted under this Agreement by Enzo, either directly or by implication, estoppel, or otherwise,
to any Person acquiring Licensed Affymetrix Products for the modification or combination by such Person of Licensed Affymetrix
Products with other items other than in the ordinary and intended manner in the ordinary course of use of Licensed Affymetrix Products,
or as specified by Sections 2.2 and 2.3, or as otherwise permitted by the law of patent exhaustion.
2.9
No Extinguishment Of Other Outstanding Royalty Obligations
.
For the avoidance of doubt, nothing in this Agreement shall operate to extinguish the obligation of any Person to pay royalties
to Enzo arising from an obligation outside of this Agreement (including via contract, operation of law, judicial ruling, or otherwise).
2.10
No Other Rights
. No rights
or covenants are granted under any patents except as expressly provided herein, whether by implication, estoppel or otherwise.
No right to grant covenants, rights, sublicenses, or to become a foundry for Third Parties is granted under this Agreement. The
Parties agree that, except as expressly set forth herein, the licenses, releases and covenants set forth in this Agreement (including
Section 2) expressly exclude any methods, systems, products, services and/or components of any Third Party. The Parties further
agree that, except as expressly provided herein, this Agreement does not cut off Enzo’s rights to enjoin, control or extract
royalties with respect to such Third Party’s methods, systems, products, services and/or components.
SECTION 3: MONETARY CONSIDERATION
3.1
Payment
. As partial consideration for this
Agreement and the dismissal by Enzo of the Litigation hereunder, Affymetrix agrees to pay to Enzo a total of ten million U.S.
Dollars ($10,000,000.00) (“Payment”), payable by Affymetrix to Enzo no later than ten (10) business days
following the Effective Date of this Agreement in lawful money of the United States, in immediately available funds, by wire
transfer to the following account: # # #
3.2
Taxes / Costs
. Each Party acknowledges that this
Agreement may have U.S. federal and state tax (collectively, “Tax”) or other consequences, and that the Party is not
relying on any other Party for advice, representations or communications as to any potential Tax or other consequences. This Agreement
is enforceable regardless of its Tax or other consequences. The Parties agree that they shall bear their own costs and attorneys’
fees relating to or arising from the Litigation and to the documentation and negotiation of this Agreement.
3.3
Dismissal
. Within three (3) court days after the
Payment of the consideration to Enzo under this Section 3 has cleared, the Parties shall cause their respective counsel to execute
and file the stipulated motion in the form set forth in
Exhibit A
dismissing with prejudice all of Enzo’s claims
against Affymetrix in the Litigation. The Parties shall promptly proceed with any and all additional procedures needed to dismiss
the Litigation as set forth above, with each Party to bear its own costs and attorneys’ fees. The Parties also agree to submit
to the court appropriate stipulations and proposed orders for extensions of time for all due dates in the Litigation so that neither
Party is required to incur unnecessary expenses in the Litigation between the Effective Date and the date the Litigation is dismissed.
The Parties acknowledge and agree that this Agreement is enforceable according to its terms with respect to final dismissal with
prejudice of all claims and counterclaims in the Litigation.
3.4
No Admission of Liability
. This Agreement is the
result of a compromise and will not at any time be considered as an admission of liability or responsibility, or lack thereof,
on the part of Enzo or Affymetrix. By entering into this Agreement, neither Affymetrix nor any of its Affiliates is conceding that
it acted wrongfully in any fashion whatsoever. Except as expressly set forth in Section 3.1, Affymetrix and its Affiliates expressly
deny that they are liable to Enzo in any way.
3.5
Full Settlement
. The Parties agree that this Agreement
is in full and complete settlement of the rights and obligations of the Parties in connection with the Litigation. This Agreement
may be pleaded as a defense to any action, suit or claim and may be used as a basis for an injunction against any such action,
suit, claim, or other proceeding of any type which may be prosecuted, initiated or attempted in violation of the terms hereof.
A Party is entitled to recover from the other adverse party reasonable attorneys’ fees and other related legal expenses incurred
in defending against any suit, action or claim brought or attempted by the other party in violation of the terms of this Agreement.
SECTION 4: TERM AND TERMINATION
4.1
Term
. The term of this Agreement shall commence upon
the Effective Date and shall continue until the expiration of the enforceability period of the Licensed Enzo Patent, unless earlier
terminated as set forth in Section 4.2 below.
4.2
Termination
. If Affymetrix fails to make the payment
set forth in Section 3.1 in the time frame required by Section 3.1, then Enzo may terminate this Agreement immediately upon further
written notice to that effect and the license, releases, and covenants granted by Section 2 of this Agreement shall immediately
terminate, be deemed null and void
ab initio
, and be of no force and effect.
SECTION 5: ASSIGNMENT
5.1
Assignment
. The license and other rights granted
by Enzo in this Agreement are personal to Affymetrix. Except as otherwise permitted in this Section, Affymetrix may not assign,
delegate, or otherwise transfer this Agreement or any license or rights hereunder without the prior written consent of Enzo. The
limitations on assignment set forth in Section 5 do not apply to an internal
reorganization of a Party or its Affiliates (re-incorporation
or the like). Any other purported assignment, delegation, or transfer without the prior written consent of Enzo will be null and
void
ab initio
and without effect. Nothing herein expressed or implied will give or be construed to give any Person who
is not a Party any legal or equitable rights hereunder.
5.2
Permitted Assignment by Affymetrix
. Notwithstanding
the provisions of Section 5.1, Affymetrix may assign its rights under this Agreement, in whole or in part, without Enzo’s
prior written or oral consent, to a Person with whom Affymetrix is merged or consolidated, or who acquires all or substantially
all of Affymetrix’s business subject to the Litigation; provided however, that (1) this Agreement shall not be assigned to
multiple Persons; (2) any such assignment of rights will not extend to products or services of such Person that pre-existed the
acquisition (or natural evolutions or extensions thereafter); (3) any such assignment of rights shall not relieve such Person from
any obligations that such Person may have under this Agreement; and (4) Affymetrix obtains from such Person a written agreement
to be bound by the terms and conditions of this Agreement and furnishes the same to Enzo. In the event that Affymetrix does not
continue to exist as a distinct operating entity (such as a wholly-owned subsidiary) after the transaction, the rights of Affymetrix
hereunder so assigned only extend to Licensed Affymetrix Products existing as of the date of the transaction and natural evolutions
of Licensed Affymetrix Products created after the date of the transaction, and will not otherwise extend to any products, services,
or activities of the Person prior to, on or after the date of the transaction. The releases and covenants provided by Affymetrix
and its Affiliates shall run with the rights being assigned or transferred and shall be binding on any permitted successors-in-interest,
transferees, or assigns thereof. For avoidance of doubt, any such assignment of rights will not extend to any Third Party products
or services existing prior to the time of transaction or natural evolutions or extensions thereof. Any purported assignment, delegation,
or transfer under this Section 5.2 that does not comply with the foregoing will be null and void
ab initio
and without effect.
5.3
Further Restriction on Assignment by Affymetrix
:
Notwithstanding the provisions of Sections 5.1 and 5.2, in no event may this Agreement, including the license and rights granted
hereunder, be assigned, delegated, or otherwise transferred without Enzo’s prior written consent to any of the following:
Abbott Laboratories; Abbot Molecular, Inc.; Agilent Technologies, Inc.; Becton, Dickinson and Company; Becton, Dickinson Diagnostics,
Inc.; Geneohm Sciences, Inc. (now part of Becton Dickinson); Gen-Probe, Inc. (now part of Hologic, Inc.); Hologic, Inc.; Illumina,
Inc.; Life Technologies Corporation (now part of Thermo Fisher Scientific, Inc.); Roche Molecular Systems, Inc. (part of Hoffmann-La
Roche AG); Roche Diagnostics Corporation (part of Hoffmann-La Roche AG); Roche Diagnostics Operations Inc. (part of Hoffmann-La
Roche AG); and Roche Nimblegen, Inc. (part of Hoffmann-La Roche AG); or any of the respective Affiliates of any of the foregoing
(each a “Restricted Entity”), so long as any patent infringement litigation concerning the Enzo Licensed Patent remains
pending between Enzo and the respective aforementioned Restricted Entities. For the avoidance of doubt, a Restricted Entity’s
acquisition of Affymetrix by stock purchase, reverse triangular merger, or similar transaction does not constitute an assignment
of the Agreement by Affymetrix where Affymetrix (or its successor entity) continues to exist as a distinct operating entity (for
example, as a wholly-owned subsidiary of the Restricted Entity) after the date of the acquisition, provided
that the licenses, covenants, and releases granted herein shall
extend only to Licensed Affymetrix Products existing as of the date of the acquisition and will not otherwise extend to any products,
services, or activities of the acquiring Restricted Entity prior to, on or after the date of the acquisition.
5.4
Permitted Assignment by Enzo
. All license rights
and covenants contained herein shall run with the Licensed Enzo Patent, as it applies to the license rights and covenants contained
in Sections 2.1 through 2.6, inclusive, and shall be binding on any successors-in-interest or assigns thereof. Any assignment of
the Licensed Enzo Patent to any other Person shall be subject to this Agreement.
SECTION 6: MISCELLANEOUS PROVISIONS
6.1 Representations:
6.1.1
Plaintiff Representations:
Enzo
represents and warrants that: (i) as of the Effective Date, Enzo and/or its Affiliates own the Licensed Enzo Patent, and have the
right to grant the license, releases and covenants with respect to the Licensed Enzo Patent set forth herein; (ii) as of the Effective
Date, it has not assigned or otherwise transferred to any other Person any rights to the Licensed Enzo Patent that would prevent
Enzo from conveying the rights set forth herein; and (iii) the person executing this Agreement on behalf of Enzo has the full right
and authority to enter into this Agreement on Enzo’s behalf.
6.1.2
Affymetrix Representations:
Affymetrix
represents and warrants that: (i) as of the Effective Date, Affymetrix has the right to grant the releases and covenants set forth
herein; and (ii) the person executing this Agreement on behalf of Affymetrix has the full right and authority to enter into this
Agreement on Affymetrix’s behalf.
6.1.3
Disclaimer of Representation
.
Nothing in this Agreement shall be construed as (i) a representation or warranty by Enzo as to the scope, validity, or enforceability
of any patent; (ii) a representation or warranty that the manufacture, use, or sale of any products will not utilize or infringe
any intellectual property rights; and (iii) any obligation by Enzo to pay annuities or otherwise maintain any patents in force
in any country.
6.2
Confidentiality
. From and after the Effective Date,
neither Party shall disclose the existence or terms of this Agreement except:
6.2.1 with the prior written consent of the other Party;
6.2.2 to any governmental body having jurisdiction
and specifically requiring such disclosure;
6.2.3 in response to a valid document request
or subpoena or as otherwise may be required by law, legal process or order of a court, provided a protective order is in place
that limits disclosure of such information to outside counsel only and the disclosing Party provides the other Party with written
notice at least ten (10) business days prior to disclosure to permit the
other Party the opportunity to object and/or to seek a court-entered
protective order or comparable court-ordered restriction, and shall reasonably cooperate with the other Party in its efforts to
obtain that protective order and take all other reasonable actions in an effort to minimize the nature and extent of such disclosure
and obtain confidential treatment to the extent available;
6.2.4 for the purposes of disclosure in connection
with the Securities and Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, and any other reports filed with
the Securities and Exchange Commission (expressly including, but not limited to, Form 8K disclosures), or any other filings, reports
or disclosures that may be required under applicable laws or regulations;
6.2.5 to a Party’s accountants, legal
counsel, tax advisors and other financial and legal advisors and other professional advisors in their capacity of advising the
party in such matters, subject to obligations of confidentiality and/or privilege at least as stringent as those contained herein;
6.2.6 with obligations of confidentiality
at least as stringent as those contained herein, to a counterparty in connection with a proposed merger, acquisition, financing
or similar transaction.
6.2.7 in connection with tax audits or to
fulfill its corporate financial reporting obligations under GAAP;
6.2.8 with obligations of confidentiality
at least as stringent as those contained herein, by any Party and its Affiliates as required to enforce this Agreement or establish
rights hereunder;
6.2.9 to officers, key shareholders and/or
employees with a need to know, attorneys, accountants and directors, who are under obligations of confidentiality (which may include
professional responsibility obligations) at least as stringent as those contained herein; and
6.2.10 to its Affiliates, who are similarly
bound by this Agreement or under obligations of confidentiality at least as stringent as those contained herein.
6.2.11 to Third Parties who make, sell, offer
to sell, export, import, or distribute any Licensed Affymetrix Product or who make, sell, for offer to sell any Covered Third Party
Accused Product, and who have a need to know, under obligations of confidentiality at least as stringent as those contained herein.
Notwithstanding anything else in this Agreement to the contrary,
a Party may also disclose to anyone any information that is publicly available, through no breach by any Party of the confidentiality
obligations hereunder.
6.3
Notices
. All notices required or permitted to be
given hereunder shall be in writing and shall be delivered by hand, or, if dispatched by prepaid air courier, with package tracing
capabilities or by registered or certified airmail, postage prepaid, addressed as follows:
If to Enzo:
Dr. Elazar Rabbani
Enzo Life Sciences, Inc.
527 Madison Avenue
New York, NY 10022
Copy to (which does not constitute notice):
Michael Stadnick
Desmarais LLP
230 Park Avenue
New York, NY
10169
If to Affymetrix:
Siang Chin
Senior Vice President and General Counsel
Affymetrix, Inc.
3420 Central Expressway
Santa Clara, CA 95051
Copy to (which does not constitute notice):
Peter Root
Kaye Scholer LLP
Two Palo Alto Square, Suite 400
3000 El Camino Real
Palo Alto,
CA 94306
Such notices shall be deemed to have been served when received
by addressee. Either Party may give written notice of a change of address and, after notice of such change has been received, any
notice or request shall thereafter be given to such Party as above provided at such changed address.
6.4
Publicity
. Neither party will issue a press release
or any other public announcement regarding this Agreement or the settlement of the Litigation unless the other Party provides prior
consent in writing. Notwithstanding the foregoing and Section 6.2 above, upon inquiry either Party may state that Enzo and Affymetrix
have entered into a settlement agreement.
6.5
Governing Law / Jurisdiction
. This Agreement and
matters connected with the performance thereof shall be construed, interpreted, applied and governed in all respects in accordance
with
the laws of the United States of America and the State of Delaware,
without reference to conflict of laws principles. Enzo and Affymetrix agree (a) that all disputes and litigation regarding this
Agreement, its construction and matters connected with its performance be subject to the exclusive jurisdiction of the state and
federal courts in the District of Delaware (the “
Court
”), and (b) to submit any disputes, matters of interpretation,
or enforcement actions arising with respect to the subject matter of this Agreement exclusively to the Court. The Parties hereby
waive any challenge to the jurisdiction or venue of the Court over these matters.
6.6
Sophisticated Parties Represented by Counsel.
The
Parties each warrant and represent that (i) they are sophisticated parties represented at all relevant times during the negotiation
and execution of this Agreement by counsel of their choice, and that they have executed this Agreement with the consent and on
the advice of such independent legal counsel; (ii) they and their counsel have determined through independent investigation and
robust, arm’s-length negotiation that the terms of this Agreement shall exclusively embody and govern the subject matter
of this Agreement, (iii) it investigated the facts pertinent to this Agreement as it deemed necessary, (iv) no other Person or
Party, nor any agent or attorney of a Party, made any promise, representation or warranty whatsoever, express or implied, not contained
in this Agreement concerning the subject matter of this Agreement to induce it to execute this Agreement, (v) it has not executed
this Agreement in reliance on any promise, representation or warranty whatsoever, express or implied, not contained in this Agreement
concerning the subject matter of this Agreement, and (vi) it has not executed this Agreement in reliance on any promise, representation
or warranty not contained herein. The Parties included this paragraph to preclude any claim that any Party was fraudulently induced
to execute this Agreement and to preclude the introduction of parol evidence to vary, interpret, supplement or contradict the terms
of this Agreement.
6.7
Bankruptcy
. The Parties acknowledge and agree that
all rights and licenses granted by Enzo under or pursuant to this Agreement are, and will otherwise be deemed to be, for purposes
of Section 365(n) of the United States Bankruptcy Code, as amended (the “Bankruptcy Code”), licenses of rights to “intellectual
property” as defined under Section 101 of the Bankruptcy Code. The Parties agree that, notwithstanding anything else in this
Agreement, Affymetrix and its Affiliates, as the licensee of such intellectual property rights under this Agreement, will retain
and may fully exercise all of its rights and elections under the Bankruptcy Code (including, without limitation, a Affymetrix and
its Affiliates’ right to the continued enjoyment of the rights and licenses granted by Enzo under this Agreement). Notwithstanding
the foregoing, this Agreement shall be deemed and treated as an executory contract under Section 365 of the Bankruptcy Code and
is subject to the restrictions on assumption and assignment in section 365(c). Further, this provision shall not alleviate or contravene
the restrictions on assignments and acquisitions set forth in this Agreement.
6.8
No Laundering
. The Parties understand and acknowledge
that the licenses, releases, and covenants granted to Affymetrix and its Affiliates by Enzo hereunder are intended to cover only
the bona fide products or services of Affymetrix and its Affiliates and are not intended to cover patent laundering activities
(i.e., activities that are undertaken solely for the purpose of improperly extending licensed rights to cover any activity of any
third party acting outside the scope of Affymetrix’s or its Affiliates’ licensed activities). The Parties further agree that a
purchase of a product from a supplier and resale of such product
in substantially the same form back to the same suppler is not licensed under this Agreement. Nothing in this Agreement shall be
construed to license sham sales or sham service contracts executed by Affymetrix or any of its Affiliates with any third party
solely for the purpose of improperly extending licensed rights to cover any activity of any third party acting outside the scope
of Affymetrix’s (or its Affiliates’) licensed activities.
6.9
Severability
. If any provision of this Agreement
is held to be illegal or unenforceable, such provision shall be limited or eliminated to the minimum extent necessary so that the
remainder of this Agreement will continue in full force and effect and be enforceable. The Parties agree to negotiate in good faith
an enforceable substitute provision for any invalid or unenforceable provision that most nearly achieves the intent of such provision.
6.10
Entire Agreement
. The Parties hereby agree that
(i) this is an enforceable agreement; (ii) this Agreement constitutes the entire and only understanding of each of them with respect
to the subject matter of the Agreement, and merges, supersedes and cancels all previous agreements and understandings, whether
oral or written, with respect to the subject matter of the Agreement; (iii) no oral explanation or oral information by any Party
hereto shall alter the meaning or interpretation of this Agreement; (iv) the terms and conditions of this Agreement may be altered,
modified, changed or amended only by a written agreement that identifies itself as an amendment to this Agreement and is executed
by duly authorized representatives of Enzo and Affymetrix; (v) the language of this Agreement has been approved by counsel for
each of them, and shall be construed as a whole according to its fair meaning; and (vi) none of the them (nor their respective
counsel) shall be deemed to be the draftsman of this Agreement in any action which may hereafter arise with respect to the Agreement.
6.11
Modification; Waiver
. No modification or amendment
to this Agreement, nor any waiver of any rights, will be effective unless assented to in writing by the Party to be charged, and
the waiver of any breach or default will not constitute a waiver of any other right hereunder or any subsequent breach or default.
6.12
Construction; Language
. Any rule of construction
to the effect that ambiguities are to be resolved against the drafting Party will not be applied in the construction or interpretation
of this Agreement. As used in this Agreement, the words “include” and “including” and variations thereof,
will not be deemed to be terms of limitation, but rather will be deemed to be followed by the words “without limitation.”
The headings in this Agreement will not be referred to in connection with the construction or interpretation of this Agreement.
This Agreement is in the English language only, which language shall be controlling in all respects, and all notices under this
Agreement shall be in the English language.
6.13
Counterparts
. This Agreement may be executed in
counterparts or duplicate originals, both of which shall be regarded as one and the same instrument, and which shall be the official
and governing version in the interpretation of this Agreement. This Agreement may be executed by facsimile signatures or other
electronic means and such signatures shall be deemed to bind each Party as if they were original signatures.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be signed below by their respective duly authorized officers.
Enzo Life Sciences, Inc.
|
By:
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/s/ Barry W. Weiner
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Name:
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Title:
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President
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Date:
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10/9/15
|
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Affymetrix,
Inc.
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By:
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/s/ Frank Whitney
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Name:
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Title:
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Chief Executive Officer
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Date:
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10/8/15
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By:
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/s/ Gavin Wood
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Name:
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Title:
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Chief Financial Officer
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Date:
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10/9/15
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EXHIBIT A
STIPULATED MOTION FOR DISMISSAL OF
LITIGATION
UNITED STATES DISTRICT COURT
OF DELAWARE
|
ENZO LIFE SCIENCES, INC.
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)
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CASE NO. CV 12-CV-433-LPS
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|
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)
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vs.
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)
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JOINT STIPULATION OF DISMISSAL
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)
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WITH PREJUDICE
|
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AFFYMETRIX, INC.
|
)
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)
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The Hon. Leonard Stark
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Defendant.
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)
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Chief United States District Court Judge
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|
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)
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)
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Pursuant to Rule 41(a)(1)(A)(ii) of the Federal
Rules of Civil Procedure, Plaintiff, Enzo Life Sciences, Inc., and Defendant Affymetrix, Inc., by and through their respective
counsel, hereby stipulate to the dismissal with prejudice of all claims in this action. Each party shall bear its own attorneys’
fees and costs.
|
|
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Respectfully submitted,
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FARNAN LLP
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MORRIS NICHOLS ARSHT &TUNNELL
LLP
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Brian E. Farnan (#4089)
|
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Jack B. Blumenfeld (#1014)
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919 North Market Street, 12
th
Flr
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Derek J. Fahnestock (#4705)
|
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Wilmington, DE 19801
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1201 North Market Street
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(302) 777-0336
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P.O. Box 1347
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bfarnan@farnanlaw.com
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Wilmington, DE 19899
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|
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(302) 658-9200
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|
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Attorneys for Plaintiff
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jblumenfeld@mnat.com
|
|
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Enzo Life Sciences, Inc.
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dfahnestock@mnat.com
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Attorneys for Defendant
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Affymetrix Inc.
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Exhibit 99.1
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news
release
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|
|
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Enzo Biochem, Inc.
|
|
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527 Madison Avenue
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|
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New York, NY 10022
|
|
FOR IMMEDIATE RELEASE
ENZO BIOCHEM REPORTS STRONG FOURTH
QUARTER RESULTS
-----
Higher Revenues and Operating
Income, Plus Legal Settlements,
Result in Net Income Exceeding
$8 Million, or 18 Cents Per Share
NEW YORK, NY, October 13, 2015 – Enzo Biochem
Inc. (NYSE:ENZ) today reported results for the fiscal quarter and year ended July 31, 2015.
Fourth Quarter Highlights
|
|
·
|
Revenues of $25.7 million were up 3% over the prior year quarter, despite decreased royalty income. Clinical Labs’ revenues
of $17.2 million were up 11% over the same period in the prior year while Life Sciences product revenues were essentially unchanged
on a constant currency basis.
|
|
|
·
|
Clinical Lab’s gross margins were 39% and have increased 500 basis points over the prior year period as a result of the
shift to higher valued molecular diagnostic testing. Consolidated gross margins increased 3% as a percentage of sales while gross
profit remained unchanged at 44%.
|
|
|
·
|
Both Clinical Labs and Life Sciences were profitable and cash flow from operations reached $4.5 million.
|
|
|
·
|
Aided by legal settlements in the fiscal 2015 fourth quarter of $11.3 million, net income for the period ended July 31, 2015
was $8.4 million, or $0.18 per share, compared to net loss of $3.2 million or ($0.07) in the same period a year earlier.
|
|
|
·
|
Continued integration of business units yielding enabling platforms that allow for the Company to uniquely service other clinical
laboratories by offering both products and services. New products, such as FlowScript™, are helping to grow the Lab’s
high value testing menu.
|
|
|
·
|
Liquidity and working capital materially strengthened at July 31, 2015 with cash of over $18 million and working capital in
excess of $22.5 million, compared to cash of $17.5 million and $15.7 million of working capital at July 31, 2014.
|
Statement by Barry Weiner, President:
“The 2015 fiscal year ended on a strong note,
concluding with solid operating performances from our business units. For the fourth quarter, Enzo Clinical Labs, bolstered by
double digit growth, achieved record revenues while Enzo Life Sciences ably dealt with lower research spending and foreign currency
headwinds. Our core businesses are executing on our strategy to transform Enzo into a leading molecular diagnostic company with
far reaching capabilities to service the health care marketplace. Our
substantial investments in legal to defend and benefit
from our intellectual property likewise are returning solid results, with our strengthened financial position and balance sheet
underscoring our Company’s ability to achieve further gains as the new fiscal year gets underway.”
Overview
Enzo posted one of its best quarters in several years as its
core business remained profitable while at the same time the Company continued to receive recognition for the value of its technological
achievements protected by its patent estate in the form of both settlements and licensing agreements. On the product front, the
Company continued to progress on the validation of assays based on AmpiProbe
®
platform by completing validation
studies in support of its regulatory submissions. In addition, the Company began clinical validation of specific assays for the
detection of a number of women’s health conditions also based on its proprietary AmpiProbe
®
technology, and
expects to submit that to New York State before the end of the calendar year. Additional application development and upgrades
have also been completed for genomics labeling kits and the launching of new immunoassays, several of which may have clinical
utility.
Rollout of the FlowScript™ E6/E7 HPV Assay was
conditionally approved this past year by New York State Department of Health in line with the Department’s procedure. Flowscript™
has generated significantly increasing usage and is a factor in the improving Clinical Lab margins. The test creates a significant
opportunity for growth as it is for the
quantitative evaluation of mRNA from HPV oncogenes
E6 and E7, overexpression of which may be an indicator of progression to cervical cancer.
Meanwhile, investment with the aim of driving improved
results continues to be placed on new, advanced processing equipment to expand and update higher margin diagnostic capabilities.
Increasing utilization of in-house developed tests are enabling Enzo to materially reduce its reliance on outside suppliers, improving
margins. Enzo is successfully achieving cost reduction on some purchased reagents from outside suppliers.
During the quarter, legal settlements were reached with
Siemens and Luminex, two of 11 cases filed in Federal District Court in Delaware. The case in Connecticut District Court involving
Life Technology, now Applera, was remanded by the Circuit Court to the lower court for further adjudication.
Mr. Weiner added comments: “The quarter and year’s
achievements reflect the strategic approach we undertook to integrate the capabilities of the Clinical Lab and Life Sciences and
also focus their activities on higher margin products, tests and services. Ongoing implementation of tighter controls to enhance
efficiency and reduce costs is also contributing to results. Development and wider utilization of our advanced technological capabilities
will further contribute to our growth goals. We also continue to aggressively pursue legal redress for patent infringements, and
if our thus far success on that score is any indication of the more substantial litigation still to be resolved it could, we believe,
lead to highly promising results.”
Fourth Quarter Results
Revenues advanced 3% over the prior year period and
7% sequentially. Clinical Labs’ revenues of $17.2 million posted double digit gains over the prior year period and sequentially.
Life Sciences’ revenue of $8.5 million was lower than the prior year period primarily due to a decline in third party royalties
and the effects of foreign currency movements. Life Sciences revenue was higher by 2% sequentially, and
unchanged for the quarter on a constant currency basis.
On a consolidated basis gross margin increased 3% from a year ago, to $11.3 million, from $10.9 million, and 8% from the preceding
fiscal third period. Gross profit as a percentage of sales remained steady at 44% for both periods. Selling, general and administrative
expenses (SG&A) declined 4% year over year and 8% sequentially, underscoring the Company’s program to reduce costs. Likewise,
owing to increased efficiency, the provision for uncollectible receivables was down 7% and 6% year over year and sequentially,
respectively. Legal expense was $1.5 million, significantly lower than the prior year period and sequentially.
GAAP net income for the quarter was $8.4 million including
legal settlements net of expenses of $11.3 million. Diluted earnings per share was $0.18, compared with a loss of $3.2 million
or ($0.07) per share in the year-earlier period. EBITDA (earnings before interest, taxes, depreciation and amortization), a non-GAAP
measure, of $9.6 million, compared to negative EBITDA a year ago of $2.2 million, an $11.7 million improvement. On an adjusted
non-GAAP basis, which excludes legal settlements and fees and certain other expenses, adjusted EPS was ($0.06), unchanged over
the prior year period and adjusted EBITDA was ($1.5 million) versus ($1.8 million), an improvement of $300,000 from a year ago,
despite lower royalties of $600,000.
Cash flow from operations for the quarter was $4.5 million.
As of July 31, 2015, current assets, including $18.1 million in cash and cash equivalents, and $6.6 million in receivables largely
related to legal settlements, amounted to $46.5 million, compared to current liabilities of $24 million, resulting in working capital
of $22.5 million.
Fourth Quarter Segment Results
Continuing to benefit from an increasing percentage
of higher margin molecular testing, which is now estimated at more than 40% of total testing volume,
Enzo Clinical Labs’
revenues increased to a record $17.2 million, from $15.4 million a year ago, an increase of $1.8 million or 11%. As compared
to the preceding quarter, revenues were ahead 10%, or $1.6 million. Gross margin amounted to $6.7 million, a 27% improvement over
last year, and up 13% sequentially. Gross profit as a percentage of sales increased 500 basis points year over year, to 39%, and
100 basis points sequentially. Operating income amounted to $0.5 million, compared to a year ago operating loss of ($0.9) million,
a $1.4 million turnaround, and up 66% from the prior quarter. The Clinical Lab continues to perform impressively as it increases
the percentage of molecular diagnostics testing with the result that it has been increasing market share in what is a traditionally
highly competitive market.
Enzo Life Sciences,
having undergone a successful
streamlining program designed to reduce costs and tighten the product mix to emphasize higher margin products for the global research
market, has remained profitable despite a weak market due to reduced grants and government outlays and foreign currency headwinds.
The fourth quarter results represented an improvement, with sequential revenues advancing to $8.1 million, from $7.9 million, up
2%, though still behind the year ago period. Royalty and licensing fee was down year over year by $600,000. Gross margin of $4.2
million compared favorably with the $4.1 million of the preceding quarter, with gross profit as a percent of sales at 52% compared
to 55% in the prior year period due to product mix. Excluding the legal settlements, Life Sciences’ operating income amounted
to $0.6 million, compared to $1.6 million and $0.9 million, year over year and sequentially, respectively. In the current year
period, lower product revenue, primarily due foreign currency effects and lower third party royalties contributed to the shortfall
over prior year.
Full Year Results
For the fiscal year ended July 31, 2015, revenues, led
by Clinical Labs revenues up 8%, edged ahead 2%, to $97.6 million. As noted, Life Sciences’ revenues were lower by 4% but
unchanged on a constant currency basis, and royalties declined 43%. Consolidated gross margin improved 3%, to $42.8 million, while
gross profit as a percentage of revenue remained unchanged at 44%. Provision for uncollectible receivables totaled $2.3 million,
25% below the prior year, and SG&A totaled $41.1 million, a 2% improvement. Legal expenses, while trending lower in the two
preceding quarters, nonetheless were up 26%, to $8.8 million. Including the aforementioned $11.5 million in legal settlements,
net income (loss) amounted to ($2.3 million), compared to a year ago net loss of ($9.9 million). Net loss per share was ($0.05)
compared to ($0.23) in the prior year. EBITDA for the year was $1.7 million versus a year ago negative ($5.7) million, a $7.4 million
improvement.
Conference Call
The Company will conduct a conference call Tuesday, October
13, 2015 at 8:30 AM ET. The call can be accessed by dialing 1-888-459-5609. International callers can dial 1-973-321-1024. Please
reference PIN number 53805533. Interested parties may also listen over the Internet:
http://tinyurl.com/owqemxj
.
To listen to the live call on the Internet, please go to the web site at least fifteen minutes early to register, download and
install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available approximately
two hours after the end of the live call, through midnight (ET) on Tuesday, October 27, 2015. The replay of the conference call
can be accessed by dialing 1-800-585-8367, and when prompted, use PIN number 53805533. International callers can dial 1-404-537-3406,
using the same PIN number.
NON-GAAP Financial Measures
To comply with Regulation G promulgated pursuant to the Sarbanes-Oxley
Act, Enzo Biochem attached to this news release and will post to the Company’s investor relations web site (
www.enzo.com
)
any reconciliation of differences between non-GAAP financial information that may be required in connection with issuing the Company’s
quarterly financial results.
The Company uses EBITDA, as a measure of performance
to demonstrate earnings exclusive of interest, taxes, depreciation and amortization. Adjustments to EBITDA are for items of a non-recurring
nature and are reconciled on the table provided. The Company manages its business based on its operating cash flows. The Company,
in its daily management of its business affairs and analysis of its monthly, quarterly and annual performance, makes its decisions
based on cash flows, not on the amortization of assets obtained through historical activities. The Company, in managing its current
and future affairs, cannot affect the amortization of the intangible assets to any material degree, and therefore uses EBITDA as
its primary management guide. Since an outside investor may base its evaluation of the Company’s performance based on the Company’s
net loss not its cash flows, there is a limitation to the EBITDA measurement. EBITDA is not, and should not be considered, an alternative
to net loss, loss from operations, or any other measure for determining operating performance of liquidity, as determined under
accounting principles generally accepted in the United States (GAAP). The most directly
comparable GAAP reference in the Company’s case is
the removal of interest, taxes, depreciation and amortization.
We refer you to the tables attached to this press release
which includes reconciliation tables of GAAP to Non-GAAP net income (loss) and EBITDA to Adjusted EBITDA.
About Enzo Biochem
Enzo Biochem is a pioneer in molecular diagnostics,
leading the convergence of clinical laboratories, life sciences and therapeutics through the development of unique diagnostic platform
technologies that provide numerous advantages over previous standards. A global company, Enzo Biochem utilizes cross-functional
teams to develop and deploy products systems and services that meet the ever-changing and rapidly growing needs of health care
both today and into the future. Underpinning Enzo Biochem’s products and technologies is a broad and deep intellectual property
portfolio, with patent coverage across a number of key enabling technologies.
Except for historical information, the matters discussed
in this news release may be considered “forward-looking” statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include declarations
regarding the intent, belief or current expectations of the Company and its management, including those related to cash flow, gross
margins, revenues, and expenses are dependent on a number of factors outside of the control of the company including, inter alia,
the markets for the Company’s products and services, costs of goods and services, other expenses, government regulations,
litigations, and general business conditions. See Risk Factors in the Company’s Form 10-K for the fiscal year ended July
31, 2014. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve
a number of risks and uncertainties that could materially affect actual results. The Company disclaims any obligations to update
any forward-looking statement as a result of developments occurring after the date of this press release.
###
|
Contact:
|
|
|
|
|
For Enzo Biochem, Inc.
|
|
|
|
|
Steven Anreder
|
|
Michael Wachs
|
|
Anreder & Company
|
|
CEOcast, Inc.
|
|
|
212-532-3232
|
|
212-732-4300
|
|
|
steven.anreder@anreder.com
|
or
|
mwachs@ceocast.com
|
|
ENZO BIOCHEM, INC.
(in thousands, except per share data)
|
|
|
Three months ended
|
|
|
Fiscal year ended
|
|
|
Selected operations data:
|
|
July 31,
|
|
|
July 31,
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
2015
|
|
|
|
2014
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clinical laboratory services
|
|
$
|
17,210
|
|
|
$
|
15,439
|
|
|
$
|
63,414
|
|
|
$
|
58,689
|
|
|
Product revenues
|
|
|
8,059
|
|
|
|
8,426
|
|
|
|
31,690
|
|
|
|
32,850
|
|
|
Royalty and license fee income
|
|
|
428
|
|
|
|
1,042
|
|
|
|
2,495
|
|
|
|
4,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
25,697
|
|
|
$
|
24,907
|
|
|
$
|
97,599
|
|
|
$
|
95,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
11,317
|
|
|
$
|
10,935
|
|
|
$
|
42,827
|
|
|
$
|
41,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit %
|
|
|
44
|
%
|
|
|
44
|
%
|
|
|
44
|
%
|
|
|
43
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
8,523
|
|
|
|
(3,162
|
)
|
|
|
(2,292
|
)
|
|
|
(9,905
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision) benefit for income taxes
|
|
|
(81
|
)
|
|
|
(7
|
)
|
|
|
7
|
|
|
|
(72
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
8,442
|
|
|
$
|
(3,169
|
)
|
|
$
|
(2,285
|
)
|
|
$
|
(9,977
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share
|
|
$
|
0.18
|
|
|
($
|
0.07
|
)
|
|
($
|
0.05
|
)
|
|
($
|
0.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share
|
|
$
|
0.18
|
|
|
($
|
0.07
|
)
|
|
($
|
0.05
|
)
|
|
($
|
0.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic
|
|
|
46,061
|
|
|
|
44,020
|
|
|
|
45,355
|
|
|
|
42,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - diluted
|
|
|
46,091
|
|
|
|
44,020
|
|
|
|
45,608
|
|
|
|
42,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected balance sheet data:
|
|
|
|
July 31, 2015
|
|
|
July 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
18,109
|
|
|
$
|
17,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital
|
|
$
|
22,528
|
|
|
$
|
15,771
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
$
|
42,606
|
|
|
$
|
36,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
68,394
|
|
|
$
|
64,411
|
|
|
|
|
|
|
|
|
|
The following table presents a reconciliation of reported
net income (loss) and basic and diluted earnings per share to non-GAAP net income (loss) and basic and diluted earnings per share
for the three and year ended July 31, 2015 and 2014, respectively.
ENZO BIOCHEM, INC.
Non-GAAP, Reconciliation Table
(Unaudited, in thousands, except per share data)
|
|
|
Three months ended
|
|
|
Fiscal year ended
|
|
|
|
|
July 31,
|
|
|
July 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP net income (loss)
|
|
$
|
8,442
|
|
|
$
|
(3,169
|
)
|
|
$
|
(2,285
|
)
|
|
$
|
(9,977
|
)
|
|
Adjusted for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal settlements, net
|
|
|
(11,288
|
)
|
|
|
—
|
|
|
|
(11,458
|
)
|
|
|
(3,100
|
)
|
|
Legal fees associated with settlements
|
|
|
217
|
|
|
|
100
|
|
|
|
217
|
|
|
|
1,065
|
|
|
Separation payments and accelerated stock compensation
|
|
|
16
|
|
|
|
130
|
|
|
|
76
|
|
|
|
628
|
|
|
Exit costs associated with contract terminations
|
|
|
—
|
|
|
|
167
|
|
|
|
—
|
|
|
|
167
|
|
|
Non-GAAP net loss
|
|
$
|
(2,613
|
)
|
|
$
|
(2,772
|
)
|
|
$
|
(13,450
|
)
|
|
$
|
(11,217
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Shares Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
46,061
|
|
|
|
44,020
|
|
|
|
45,355
|
|
|
|
42,561
|
|
|
Diluted
|
|
|
46,091
|
|
|
|
44,020
|
|
|
|
45,608
|
|
|
|
42,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share GAAP
|
|
$
|
0.18
|
|
|
($
|
0.07
|
)
|
|
($
|
0.05
|
)
|
|
($
|
0.23
|
)
|
|
Diluted earnings per share GAAP
|
|
$
|
0.18
|
|
|
($
|
0.07
|
)
|
|
($
|
0.05
|
)
|
|
($
|
0.23
|
)
|
|
Basic earnings per share non-GAAP
|
|
($
|
0.06
|
)
|
|
($
|
0.06
|
)
|
|
($
|
0.30
|
)
|
|
($
|
0.26
|
)
|
|
Diluted earnings per share non-GAAP
|
|
($
|
0.06
|
)
|
|
($
|
0.06
|
)
|
|
($
|
0.30
|
)
|
|
($
|
0.26
|
)
|
The following table presents a reconciliation of reported
net income (loss) for the three and year ended July 31, 2015 and 2014, respectively to EBITDA and Adjusted EBITDA:
ENZO BIOCHEM, INC.
EBITDA & Adjusted EBITDA, Reconciliation
Table
(Unaudited, in thousands)
|
|
|
Three months ended
|
|
|
Fiscal year ended
|
|
|
|
|
July 31,
|
|
|
July 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
8,442
|
|
|
$
|
(3,169
|
)
|
|
$
|
(2,285
|
)
|
|
$
|
(9,977
|
)
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
992
|
|
|
|
956
|
|
|
|
3,789
|
|
|
|
3,971
|
|
|
Interest expense
|
|
|
69
|
|
|
|
46
|
|
|
|
245
|
|
|
|
208
|
|
|
Provision (benefit) for income taxes
|
|
|
81
|
|
|
|
7
|
|
|
|
(7
|
)
|
|
|
72
|
|
|
EBITDA
|
|
$
|
9,584
|
|
|
$
|
(2,160
|
)
|
|
$
|
1,742
|
|
|
$
|
(5,726
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legal settlements, net
|
|
|
(11,288
|
)
|
|
|
—
|
|
|
|
(11,458
|
)
|
|
|
(3,100
|
)
|
|
Legal fees associated with settlements
|
|
|
217
|
|
|
|
100
|
|
|
|
217
|
|
|
|
1,065
|
|
|
Separation payments and accelerated stock compensation
|
|
|
16
|
|
|
|
130
|
|
|
|
76
|
|
|
|
628
|
|
|
Exit costs associated with contract terminations
|
|
|
—
|
|
|
|
167
|
|
|
|
—
|
|
|
|
167
|
|
|
Adjusted EBITDA
|
|
$
|
(1,471
|
)
|
|
$
|
(1,763
|
)
|
|
$
|
(9,423
|
)
|
|
$
|
(6,966
|
)
|