Genesis Research and Development suspends NZ operations

Auckland-based biotechnology company Genesis Research and Development Corp is suspending operations in this country, with the loss of nine jobs, mostly scientists.

Genesis chief executive Stephen Hall said the biotech business was high risk and in the global financial crisis had been one of the most difficult areas to raise funds.

On top of that the company's Solirna Biosciences operation, set up to develop single stranded gene silencing technology, was still a reasonably early stage project, making it even harder to fund.

The Japanese investor in Solirna was still deciding whether it would provide further funding. Future development of the technology was likely to be done overseas.

In this country investors had not seen the major breakthroughs that successful companies could make, exciting and educating the market about what was possible, Mr Hall said.

In contrast, the United States had a long history of companies becoming successful, along with others that did not make it, and investors understood the risks and rewards.

It was being proposed that existing Genesis Research assets, including its royalty rights, and equity interests in Solirna Biosciences and US-based software company Real Time Genomics, be transferred to a separate entity.

Existing Genesis Research shareholders would then receive shares in the new entity and would continue to hold their existing shares in Genesis, Mr Hall said.

The proposal needed shareholder approval, and afterwards the assets in the new entity could be sold when the time was right. 
Meanwhile, Genesis was also discussing a proposed transaction to acquire a company with several therapeutic development projects, including one that was close to entering clinical development.

The vendors had indicated funds were available to allow Genesis to make a placement of shares which would raise 
about $450,000, with further more significant funding likely to follow.

On another issue, Genesis Research had agreed to accept a significantly reduced amount for the settlement of an outstanding debt relating to the purchase by Pure Power Global of biofuel developer BioJoule, Mr Hall said.

Slightly more than $2m was still owed and had been written off previously. Now Genesis Research had agreed to accept a significantly reduced amount if payment was made promptly, in recognition of the significant change in asset values and the difficulty in arranging funding since the global financial crisis.

An initial deposit had been paid and complete settlement was intended this month.



Add a Comment