Genesis loses $1.7M at half-year

By Phil Boeyen, ShareChat Business News Editor

Tuesday 7th August 2001

Biotech stock Genesis is back in the red again after surprising the market at the end of last year with a profit.

For the six months ended June the Auckland-based company lost $1.7 million, a better performance than last year's $4 million interim deficit but a drop back into the negative after the full-year 2000 profit of $723,000.

Sales for the latest half-year rose 65% to $12.6 million compared with the first half of 2000 while research and development costs were up 30% to $11.3 million.

Chief executive, Dr Jim Watson, says the first half of the year has seen significant advancements in the company's ability to commercialise biotechnology intellectual property for both the international pharmaceutical industry and plant-based industries.

"Continuing that advancement, we plan to increase expenditure in the second half of 2001 as we expand our clinical trial programmes.

"We also plan to commit further research funds to new science programmes that apply our genomics capability to targets in therapeutics and plant science."

Genesis' stock was hit earlier this year after US analysts expressed disappointment at a trial with US partner Corixa into the PVAC psoriasis treatment.

Jim Watson says the next trial for the treatment is being planned.

"In conjunction with our partner Corixa Corporation, the next PVAC psoriasis trial to be conducted in the USA is being designed.

"This will focus on patients whose immune systems have not been compromised by severe immuno-suppressive treatments."

Genesis has also nearly completed a Phase I trial of AVAC for the treatment of asthma in Wellington and says Phase I trial of AVAC for the treatment of atopic dermatitis has begun.

At the end of June the company held cash reserves of $51.6 million, which chairman David Irving says are sufficient to fund current and planned research and development activities for several years.

"In addition, unlike many biotechnology companies, which depend on capital injections until products are commercialised, Genesis is substantially self-funding as the revenue growth shows.

"Genesis continues to build long term value by developing its patents and databases, gene sequencing expertise, numerous therapeutics and discovery programmes and joint venture partnerships."

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