Genesis upbeat as drug starts new tests

By DANIEL RIORDAN

Genesis Research & Development is lifting its profile in the biotech hotbed of the United States as it prepares to begin a second round of US trials on its flagship drug, PVAC.

Chief executive Jim Watson told the company's annual meeting that the new Phase II trial for the psoriasis treatment, involving 240 patients in 12 centres, would begin in late April or May and take about a year to complete.

If results were good, Phase III trials of the US Food and Drug Administration's exhaustive approval regime could begin by late next year, said Watson.

The best outcome would have PVAC through the regulatory process and making money for Genesis 18 months after that.

Genesis' Phase II trial results last year were not strong enough to proceed to the next stage, but the new trials will be more comprehensive and on terms which the company believes will be better for it.

Results from Phase II trials in the Philippines and Brazil would be ready by July.

Watson acknowledged the languishing share price - at $2.70 less than half its listing value of $6 - and said the company was taking steps to address it.

He said biotech in New Zealand still struggled to attract investment, in part because of uncertainty over the future and the time products took to get to market.

Most importantly, analysts placed little value on early candidate products which had yet to make it to the first rung of the FDA approval ladder.

To help beef up its presence in the US, Genesis has appointed two American vice-presidents.

Dr Benjamin Twombley in Connecticut will spearhead health sciences development and Dr Nathan Bach in Silicon Valley will seek licensing opportunities in agriculture and life sciences.

Twombley is the founder of Ethient, a corporate dealmaker, and Bach was most recently a sales and marketing director for genomic sequencing company Integrated Genomics.

Genesis directors have agreed to notify the Stock Exchange as soon as they sell or buy shares in the company, pre-empting proposed Stock Exchange rules.

Shareholders overwhelmingly approved the issue of 1.5 million share options to employees over the next two to three years, at a price equal to the weighted average market price for the three months before issue.

Supporters included Arcus Investment Management, which owns 8 per cent of the company.

Equities head Simon Botherway said that although the options diluted equity, they helped to preserve the company's cash by enabling it to attract top staff without offering higher salaries.

Staff already held 2.8 million options, at an average issue price of $3.91, before the latest issue. Options now represent 14 per cent of the company's share capital.