Genesis eczema trial fails

By LIAM DANN

Biotech company Genesis Research suffered a setback yesterday as UK partner SR Pharma revealed that trials of childhood eczema drug SRP299 have been unsuccessful.

Genesis and SR Pharma share joint rights to two potential eczema treatments - SRP299, which was developed in the UK and AVAC, which was developed in New Zealand.

The hopes of both companies now rest with AVAC which has its own clinical trial under way.

Results of the AVAC study are due late next month and are likely to determine the fate of that drug.

Genesis' PVAC drug - developed for the treatment of psoriasis - failed to pass phase two clinical trials last year and was discarded.

Chief executive Jim Watson said yesterday that the result of the AVAC trial was not make or break.

Genesis was on the verge of a partnership deal which would enable trials of Zyrogen - the next drug in its product pipeline.

Zyrogen is a newly discovered and patented molecule which has shown promise for the treatment of auto-immune diseases such as lupus and osteoporosis.

Genesis management launched a series of shareholder presentations yesterday.

That they had coincided with the bad news from the UK was unexpected, Watson said.

The aim was to clarify the company's cashflow position and let investors know what was in the pipeline. With no new investment, the company had enough cash to see it through to the end of 2007.

But it was expected that new partnerships would bring in more capital well before then.

Genesis has had a rocky run on the local sharemarket. Its shares skyrocketed to more than $7 each during the height of the biotechnology boom in 2000.

They closed yesterday at 50c - down 4c.