Genesis Research Announces Half Year Result

Genesis Research Announces Half Year Result

Genesis Research and Development Corporation Ltd (NZX/ASX: GEN) today announced its financial results for the six-month period to June 30.

The company ended the period with a cash balance of $28.6 million (2002: $42.2 million), which, with ongoing revenues, is expected to be sufficient to fund planned research and development programmes for a number of years. Revenue from collaborations, licence fees and interest for the six months to 30 June 2003 was $5.8 million (2002: $8.7 million). The net deficit for the period was $6.5 million (2002 deficit: $5.3 million), reflecting the level of investment in research and development programmes which are not funded by income from collaborations.

“Genesis is in a sound financial position and is pleased with the progress achieved in its research programmes,” said Chief Executive Dr Jim Watson. “Our strategy remains one of building long term value by developing a selection of product targets in both health and plant sciences.”

Clinical and preclinical research projects are continuing on programme, with results from two psoriasis trials due later in the year, and initiation of a Phase II trial of AVAC™ for the treatment of atopic dermatitis due shortly.

The Plant Division collaborative research programmes with ArborGen, LLC for forestry, and Wrightson Ltd (NZX: WRI) for grasses, continued to achieve good progress. The recently announced $0.8 million grant from Technology NZ to fund a software development programme will allow the company to capitalise on its investment in plant gene databases. Plans for the transfer of the Plant Division to a new subsidiary (AgriGenesis Biosciences Limited) are well advanced, and will be progressed with the appointment of Dr Peter Lee as Chief Executive of AgriGenesis.

Genesis now has 78 issued patents. The US Patent and Trademark Office allowed claims for 36 of these, and the rest are from a number of other countries, including nine from New Zealand. There are 52 applications pending in the US, and more than 230 pending in other countries.

Genesis had 140 staff at 30 June 2003. Expenditure in the second half of 2003 is expected to be similar to the period just completed.

About Genesis

Founded in 1994, Genesis is a New Zealand based biotechnology company with 140 staff. It is committed to the building of a broad genomic platform for the development of innovative products in health and plant biotechnology. Genesis partners with industry leaders to develop products that have global market potential through the mining of its extensive microbe, plant and mammalian EST databases.

The Health Division focuses on the immune system and has two programmes in human clinical development for the treatment of psoriasis and atopic dermatitis (eczema), with additional programmes for cancer and other indications in pre-clinical development. The patented BioStore solutions for storage of tissues and living cells are also in pre-clinical development. Collaborations are maintained with Amgen Inc. (NASDAQ: AMGN), Corixa Corporation (NASDAQ: CRXA), SR Pharma (LSE: SPA), Jurox Pty Ltd, and EvoGenix Pty Ltd.

The Plant Sciences division is focusing on key cell signalling genes – novel hormones and transcription factors - to control commercial traits including growth rates and wood fibre quality in trees, nutritional content of forage grasses, flowering control and stress tolerance. It has research collaborations with ArborGen, LLC, Wrightson Ltd (NZX: WRI), HortResearch, AgResearch and Landcare. Genesis is also undertaking significant unpartnered research programmes in novel plant hormones.

The company has an extensive health and plant patent portfolio.