Genesis Research says its close to deal with new investor

Genesis Research and Development says it is confident it can close a deal with an overseas investor to help fund its research into gene silencing technology.

The Auckland-based biotechnology company informed the New Zealand stock exchange this morning it had received a term sheet for investment in a proposed new subsidiary which would undertake the gene silencing project.

"It is expected that the new investment will be finalised within the next few weeks."

Chief executive Stephen Hall said the overseas investor had put an offer on the table for how much and under what conditions it would provide the financing.

"It's positive enough and good enough that we are confident we will be able to consummate," he told NZPA.

The offer was still under negotiation and details, including how much money was needed, could not be revealed, he said.

"Biotechs need millions, it comes in smaller bites unfortunately."

Genesis expected to retain majority ownership of the company.

It has filed patent claims for technology that employs RNA interference, or gene silencing technology, to target the growth and drug resistance of cancer cells.

Hall said Genesis had taken steps to limit any expenditure not directly related to the gene silencing project, and would continue to hold a number of assets that did not need ongoing funding.

"We also intend to implement a share purchase plan to provide funds until the various assets can be realised."

In a presentation to investors yesterday Genesis said it had just $300,000 left in the kitty and was in "urgent need" of cash, the National Business Review reported.

The company, listed in September 2000, had burned through more than $76 million of shareholders' capital but has yet to develop any income streams from its research.

Shares were placed in a trading halt yesterday, having last traded at 12c. The trading halt was lifted this morning.

- NZPA