Genesis defends share price

By DANIEL RIORDAN

Genesis Research & Development top brass spent most of yesterday's annual meeting reassuring shareholders that their company is in rude health, despite its slumping share price.

It was the company's first annual meeting as a listed entity and chief executive Jim Watson went to great lengths to convince investors they owned more than a piece of a one-trick pony.

He said this year's revenue of $29 million would come from work on genomics ($7 million), discovery activities ($8 million) and therapeutics ($14 million).

The company had cash reserves of $58 million - enough to fund its operations for four years - and a promising product pipeline.

Almost six months after listing at $6, and soaring as high as $8.48, the company's shares have taken a battering in the past couple of months, closing yesterday at $3.80. The slump began when the company released trial results for its psoriasis drug PVAC.

Although Genesis heralded the results as positive, some US analysts who cover the company's US partners in the research were less enthused, noting that competitors who had similar products in the pipeline had done better.

Dr Watson repeated his views that the results were more positive than market reaction indicated.

He said the company hoped to start new PVAC trials in August.

Even director Doug Williams, who represents US scientific investor Immunex, took a role in the defence.

"I feel your pain," he told the meeting, urging investors to sit tight and ride out the downswing in technology markets which had contributed to the share price malaise.

"It's like foot and mouth - guilt by association.

"This segment of the market trades as a block but when the market turns around and Genesis has good news to report, the market will respond."

Chairman David Irving said the share price meant the market was valuing the company's cash holding at $2.30 a share and the whole of its intellectual property at $1.50 a share.

Dr Watson said he knew of no significant shareholders who had sold down in the past month, although information on that typically lagged the event by a few weeks.