Forum Archive Index - February 2004

["david.gibson" <david.gibson@k.co.nz>]

Cris,

 

I know a bit about Genesis:

 

* a research based Biotech company - does fundamental research and patents the results

* two basic divisions - plant sciences and human health

* recent setback with PVAC eczema phase II trials declared a failure

* WRI.NZX a significant investor - mainly interested in the plant sciences/forestry side of the buisiness (could have even forced the recent formal split of the company into the two divisions pending some future separation).

 

The company is best judged on its patent rate (reasonably high - see the web site)

Valuation is difficult - share price is close to current cash reserves

Jim Watson is very highly regarded internationally as a researcher

 

Investment in GEN.NZX should be considered highly speculative.

 

However, there are many positive points:

 

* excellent people are involved in the company

* patent rate is very high - share price values existing patents at practically nothing

 

Some concerns:

 

* cash burn rate - the cash will eventually run out - it is not clear how forward company momentum will be funded

* commercialisation - big question about exactly how the existing and future IP will be turned into cash

 

Disclosure:  Hold GEN.NZX

 

/dbg