Genesis Research suspends NZ operations as funds dry up; stocks tumbles

Monday 3rd May 2010

Genesis Research and Development suspended its New Zealand operations and said it may tip its assets into a new company as funds dry up as the company awaits word on whether a Japanese investor will put in more cash. The shares tumbled by about a third.

A Japanese investment group has invested $500,000 in a joint venture, Solirna Biosciences, which purchased the intellectual property for Genesis’ novel single stranded RNAi technology, known as gene silencing technology. They’ll put in a further $500,000 provided the JV meets certain milestones.

“Further funding of Solirna is being discussed, with future development of the technology likely to be undertaken overseas,” chief executive Stephen Hall said in a statement.

Shares of Genesis slumped by 33% to 4 cents on the NZX today, having fallen from more than $7.50 in early 2001. Accident Compensation Corporation is the biggest shareholder in Genesis, with about 13% of the stock.

The gene silencing research aims to deliver disease-curing payloads into human cells. It was turned down for additional funding from the Foundation for Research, Science and Technology.Genesis said it is looking to transfer its royalty rights and equity interests in Solirna and Real Time Genomics into a separate entity, issuing shares to Genesis shareholders, who would also continue to hold existing stock.

The company is also in talks to acquire another business with “several therapeutic development projects, including on close to entering clinical development.” The vendors have indicated that funds are available that would allow Genesis to make a $450,000 placement of shares, with more potentially to follow, Hall said.

Separately, Genesis has offered to accept “a significantly reduced amount” for an outstanding debt from Pure Power Global for its sale of BioJoule, provided payment is made promptly on the long-standing amount. It said an initial deposit has been made with the balance expected this month.

Businesswire.co.nz

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