Genesis ready to launch NZ's first big biotech share issue

By DANIEL RIORDAN

Genesis Research & Development is about to return to the market with plans to register a prospectus for a Stock Exchange listing on both sides of the Tasman early next week.

The float coincides with a major American deal for the biotechnology company and its research partner Corixa Corp.

While Genesis managing director Dr Jim Watson declined to comment on the company's plans, citing pre-registration legal restrictions, Seattle-based and Nasdaq-listed Corixa said on its website yesterday that it had entered into a $US107 million ($238 million) agreement with New York Stock Exchange-listed Medicis Pharmaceutical Corp.

The agreement provides Medicis with exclusive rights to market PVAC, a psoriasis treatment developed by Corixa and Genesis.

Revenue received by Corixa will be shared with Genesis on a pro rata basis consistent with the two partners' shares of the project's development efforts.

Genesis' share has not been disclosed but is understood to be significant.

The deal with Medicis for the US and Canada follows a similar deal reached by Corixa and Genesis for Japanese commercialisation with pharmaceutical company Zenyaku Kogyo.

The rights to market PVAC in the rest of the world have yet to be allocated.

Genesis will offer shares to institutions and retail investors on both sides of the Tasman.

It is not yet known how much money the company will attempt to raise but when it came close to market a few months ago it had the blessing of shareholders to raise up to $35 million.

The company was one of several to pull its float in May amid high volatility in the global market for technology stocks.

Dr Watson said proceeds would be used for further research and development, to advance clinical trials, and to increase the company's technology capabilities.

Genesis, which is traded on the grey market, will be New Zealand's first listed biotechnology stock.

At the end of June, it raised $13.8 million from six institutional investors, placing 2.76 million shares (or 15 per cent of its total) at $5 a share, as it awaited better market conditions for its listing.

That gave it a market capitalisation of over $100 million.