Stunning year for Genesis

By DANIEL RIORDAN venture capital writer

Listed biotechnology company Genesis Research & Development has overachieved, posting a net profit for the December year of $723,000 compared with a prospectus forecast loss of $9.97 million, and a loss for the previous year of $7.2 million.

The company attributed the huge improvement to its sublicensing of its PVAC vaccine for the treatment of the skin condition psoriasis to partners in Japan and North America.

Revenues quadrupled to $28.6 million as a result and the company finished the year with cash reserves of $60.9 million.

Genesis listed on the New Zealand and Australian Stock Exchanges on September 22. Its shares, which were offered at $6 and have traded as high as $8.48, closed unchanged yesterday at $7.20.

As the company prepares for an Australasian investor roadshow this month, founder and chief executive Dr Jim Watson identified two key factors in the year ahead.

One is investing in the technology needed to keep the company competitive, particularly in its ability to mine with computers the databases it had been building over the past five years.

The second is expanding and accelerating development work on therapeutic vaccines. The company has increased the size of its asthma trial in Wellington and is planning to pursue a treatment for atopic dermatitis or eczema from mid-year.

"Investors know biotechnology is here to stay. Investors know genomics [the identification of genetic information] is an area of exceptional promise and their commitment is long-term," Dr Watson said.

The company lifted its R&D spending to $19 million from $12 million during the year, developing new therapeutics as well as conducting Phase II clinical trials for PVAC in the US, Brazil and the Philippines. It expects to announce the results of the US trial shortly.