Interim Report January-September 2008

January 1 – September 30, 2008

Group net sales amounted to KSEK 375 (KSEK 5)

Net profit/loss for the period KSEK -10,134 (KSEK – 6 090)

Earnings per share for the period amounted to SEK -0.93 (-0.70)

Cash and cash equivalents at the end of the period totaled KSEK 512 (3 856)

July 1 – September 30, 2008

•Genovis entered into a distribution agreement with Biolegio BV for the Dutch, Belgian and German market.

•Genovis moved to larger offices more suited for production and quality-control demands.

•Genovis took part in a number of conferences and expos.

Important events at the end of the period

Genovis financial plan for 2008 is delayed

In the fall of 2007 Genovis launched the first products through its website. The company has thereafter introduced the products on selected geographic markets through appointed distributors, and with an increasing number of orders and customers. In parallel there are ongoing discussions with potential partners interested in OEM and licensing of Genovis current products as well as those in the pipeline. Before these business activities are completed Genovis will not generate sufficient revenues to meet the previously stated ambition to reach positive cash-flow in 2008.

For the financing of the running operation and the further development of the intellectual property, additional capital is needed. The board has decided on a short-term bridge financing and to await the outcome of ongoing business discussions, and thereafter decide on form and scope of the most appropriate financing for the long-term and strategic development needs of Genovis.

The Board of Directors has decided, given the insecurity of our times and the financial unrest in the world, not to issue any projection for the immediate future.

Two novel products were launched within the Antibody Tools area of application.
IgGZero™

The first of its kind in the world: a protein that specifically cleaves the sugar molecules that naturally exist on antibodies. Removing the sugar molecules can improve the performance of the antibody in various applications. As another example, IgGZero™ can help wash away antibody molecules from primary cells.

FcDOCKER™
Binds specifically to the antibody. This protein is very useful in the antibody production process. Using FcDOCKER entails a gentler production process than competing methods and offers great technical and economic advantages.

Genovis entered into distribution agreements with Innovative Biotech Pte Ltd. in Singapore.
Innovative Biotech Pte Ltd was founded in 1994 and is a subsidiary of Rotary Engineering Limited. The company’s main focus is sales and marketing of products in the medical, pharmaceutical, and biotech fields to universities, laboratories, and research institutions.

Comments from the CEO
During the period we have focused on expanding our line of products, while retaining and strengthening the projects in the pipeline without incurring increased expenses. We have further increased the number of sales channels via distributors and we will reach our objective for the year. At the same time we are conducting discussions with partners pertaining to the sale of OEM products and new product concepts in order to increase sales volumes over the long term.
We have effectively reorganized Genovis and now have an extremely well functioning team. The company has also moved to more appropriate premises, allowing us to offer our customers
and future partners better quality and larger quantities in terms of production, as well as a support and development organization that continues to be extremely strong. Our internal development projects, in vivo projects for imaging and delivery, have made good progress during the period, which means that in the future we will focus on them internally and through external partnerships.
Genovis also pursues intensive development operations were the design and production of nano structures for the Life Science industry is the focus. We have started to commercialize our first products and persue revenues from our accumulated R&D portfolio and hence the analysis of

advances and performance in relation to established goals is a mixture of concrete results and subjective evaluations.
The number of satisfied customers, order bookings, new customers, interested potential partners, and the commercial potential of our research projects are important measures of value. It is gratifying to see that

we succeeded in increasing all of them during the third quarter and that we have excellent prospects to continue doing so in the future.

Operations

Third quarter 2008
The Genovis product portfolio consists of nano-sized particles, a group of proteins, and the know-how to use them as effective research tools. Today, Genovis markets products in three different areas of application: imaging, biomolecule delivery, and antibody tools. Our customers include those who work with advanced research at pharmaceutical companies or within the academic research community.

Genovis has moved to new offices that are better suited for its production operations. The new offices were necessary for Genovis to carry out production and quality assurance on a larger scale. The company’s move went according to plan and did not delay any ongoing projects. During this period, two client reference projects took place in the Netherlands, which resulted in an agreement with Biolegio for the exclusive right to sell and market Genovis products in Belgium and the Netherlands, and non-exclusive rights in Germany.

Genovis has continued the work initiated during the first and second quarters to establish sales channels via new distributors in Europe. Genovis marketed the technology at various industry-specific conferences and scientific meetings, including RNAi Europe in Stockholm, ScanLab in Copenhagen together with Nordic Biolabs, and BIOSPAIN´08 together with the Spanish distributor Teknokroma.

Genovis has made the organization in Lund more effective and adapted it to current priorities – product development, production, sales, and support.

Areas of Application

Imaging
Imaging, a market segment undergoing strong growth, is used by researchers for in vivo and ex vivo studies. In order to see what happens in a cell and to be able to follow the cell inside an animal model, the cell must be marked in some way. One method is to introduce magnetic nanoparticles into the cell, NIMT® FeOlabel, and then follow the cell using magnetic resonance imaging (MRI).
The objective is for customers to be able to use Genovis products from the first tests in test tubes to more advanced experiments in animal models (in vivo).

Biomolecule Delivery
There is a large market for technologies that deliver molecules (e.g., DNA or genes) into cells. One such technology is NIMT®FeOfection, which offers high efficiency and low toxicity compared with rival products. RNAi is another field undergoing dramatic growth, where researchers are interested in technologies to silence gene activity in order to treat conditions such as viral infections, cardiovascular diseases, cancer, and metabolic diseases in the future. With its high efficiency and low toxicity, Genovis’ NIMT®FeOfection is also extremely suitable for these studies.

Antibody Tools
FabRICATOR®is a genetically modified enzyme that cleaves antibodies into two parts, a Fab fragment and an Fc fragment. Unlike other technologies on the market, FabRICATOR cleaves all antibodies in a very short time in exactly the same place, and each antibody is only cleaved once.
FabRICATOR is also sold as a kit that allows customers to cleave and isolate pure Fab fragments in less than one hour, unlike other methods which may take up to twenty-four hours to achieve the same results.

Geographic Markets

The market for the products Genovis develops and markets is currently estimated at about USD 900 million. The North American market is the largest (approx. 40%), followed by the European market (30%), while the Asian market is the fastest growing geographic market.

During the first eight months of 2008 (up to September 30), Genovis signed five distributor agreements involving a total of 10 countries. Sellers have been trained and sales on the new markets have begun. The
total number of incoming orders has increased and Genovis expects continued improvement during the fourth quarter.

Regions – third quarter

Europe

Nordic Biolabs is a leading supplier of products for medical research, diagnostics, microbiology, and transfusion drugs, and represents more than 40 strong suppliers and brands. Its customers are at labs, hospitals, and universities, as well as the pharmaceutical and biotech industries. Nordic Biolabs has initiated sales to customers.

Stratech Scientific Ltd, with headquarters in Suffolk, UK, is an efficient company that has provided competitive, high-quality, and reliable products to research laboratories in the UK and the rest of Europe for 25 years. Stratech initiated sales with customers during the third quarter.

Teknokroma is an international enterprise with 30 years of experience and a product portfolio consisting of more than 40,000 products. With a team of highly qualified chemists, pharmacists, and technicians, Teknokroma began sales during the third quarter.

Biolegio is a Dutch oligonucleotide synthesis company that was founded in 1996. With more than ten years in the industry, the company has extensive experience with oligonucleotide synthesis, and provides high-

quality DNA/RNA oligos, probes, and siRNA to hospitals, universities, and biotech companies in Europe. With its trained and well-educated team, Biolegio offers high quality and service. Biolegio will begin sales of Genovis products during the fourth quarter.

North America

Genovis is represented through its subsidiary Genovis Inc. and is now concentrating on expanding operations with local distributors and collaboration partners.

Asia

Di Biotech Ltd in Korea, the spin-off company of Pharmacia Biotech Korea, was founded in 2007 and is a pioneer and market leader on the Korean life science market. The company works with customers with a focus on three areas of research: genomics, molecule interaction, and cell imaging. The company has begun to work with customers, and Genovis expects an increase in incoming orders during the fourth quarter.

Product Launch

The planned launch of IgGZero™ and Fc Docker™ was postponed to the fourth quarter and Genovis is planning an additional product launch for this quarter.

Sales

Third quarter
Net sales during the third quarter amounted to KSEK 224 (0). During the quarter a distributor agreement was signed with Biolegio for Belgium, Germany, and the Netherlands. The distributor will begin sales of Genovis products in the fourth quarter, though it has already begun working with customers and generated revenue for Genovis during the third quarter. The rest of the company’s revenue was primarily generated by its own sales of nanoparticles and proteins.

Net Result

Third Quarter
The operating loss during the third quarter was KSEK 4,257 (loss: 3,429). The increased operating expenses are mainly attributable to increased personnel costs.

Depreciation during the third quarter amounted to KSEK -229 (loss: 136) of which KSEK -136 (loss:136) were tangible assets and KSEK -93 (0) were intangible assets.
Loss after financial items was KSEK 4,271 (loss: 3,474). Deferred tax during the quarter totaled KSEK 1,226 (722)

Cash Flow and Financial Position

Third Quarter
Cash flow from operating activities was KSEK –3,738 (loss: 2,048). Cash flow from change in working capital was KSEK 273 (1,223). At the end of the period, cash and cash equivalents amounted to KSEK 512.

The Group’s net investments during the period totaled KSEK 6 (412). Net investments included KSEK 6 (9) for tangible assets and KEK 0 (403) for intangible assets.

January – September
Cash flow from operating activities was KSEK –13,538 (loss: 8,662). Cash flow from change in working capital was KSEK -154 (loss: 986).
The Group’s net investments during the period totaled KSEK 6 (5,023). Net investments included KSEK 6 (651) for tangible assets and KSEK 0 (4,372) for intangible assets.

Organization and Personnel

Genovis’ Lund division is responsible for the centrally coordinated functions in the business and finance areas, as well as production, research and development, and customer sales support. The CEO and COO have overall responsibility for the Group’s business

Genovis Inc. USA is responsible for sales and marketing in the US market.

The number of employees decreased during the third quarter by one full-time position. At the end of the period, the Group had eleven employees, ten in the parent company and one in the US, compared with ten employees in the parent company during the same period last year.

Other Information
Risks and Uncertainties
Genovis’ general view of the financial risks that could affect operations have not changed since the description published in the most recent annual report. For a detailed overview of the company’s financial risks please refer to page 41 of Genovis’ 2007 annual report.

Warrants program

The company has issued 187,000 warrants for subscription. The warrant rights can be exercised for subscription of shares between February 28, 2012 and May 31, 2012. When all warrants are fully exercised, share capital will increase by a total of SEK 74,800 through the issue of 187,000 shares, with a par value of SEK 0.40. If the warrants are fully exercised, the new shares will constitute 1.7% of capital and votes.

Genovis shares are listed on the First North OMX Nordic Exchange. Mangold Fondkommission is our certified advisor and liquidity guarantor.

wkr0003.pdf

Interim Report January-June 2008

Q2, 2008, SEK thousand

• Net sales 37 (4)
• Operating earnings – 4,864 (-2,199)
• Net profit/loss for the period -3,547 (-1,716)
• Earnings per share -0.35 (-0.20)
• Cash flow from current operations -5,538 (-2,879)
• Cash flow for the period 3,535 (-6,693)

The Group was formed in Q3 2007 and therefore no comparative figures are presented for the Group. Q2 is reported instead for the Parent Company.

April 1 – June 30, 2008

• Genovis entered into distribution agreements with distributors in the European market: Stratech Scientific Ltd for the UK and Irish market and Teknokroma for the Spanish and Portuguese market.

• Genovis entered into a cooperation agreement with Japanese firm Magnabeat Inc.

• The Genovis new share issue was oversubscribed, with 98 percent of offered shares subscribed through exercise of subscription rights.

• Genovis implemented conversion to one class of shares and the new short name for the share is GENO.

• Genovis has issued 187,000 warrants for subscription by the CEO, senior executives, and other employees on equal terms.

Comments from the CEO – Continued Focus on Distributors

Sarah Fredriksson, CEO and President says:
At the end of the first quarter we signed agreements with distributors in Sweden, Denmark, and South Korea. During the second quarter Genovis continued to establish sales channels in Europe through agreements with distributors in the United Kingdom, Ireland, Spain, and Portugal. Our objective is to have an additional four or five agreements ready with distributors in Asia and Europe and at least one distributor in the United States during 2008; in other words, a total of about ten distributors in place during the year.

Each distributor markets the products locally through its own sales channels directly to customers, while we work simultaneously with comprehensive marketing campaigns for various industry-specific venues. In May Genovis presented R&D projects and products within RNA interference at the RNAi World Congress in Boston, Massachusetts, USA. It was a fantastic opportunity for Genovis to show our technology at a forum of leading researchers, Nobel-price winners, potential partners, customers, and opinion-makers. The number of spontaneous inquiries from various research groups about testing our technology more than doubled during the second quarter, which is a promising development.

It will take time before a new distributor generates revenues for Genovis. Sales via distributors probably will not contribute to cash flow until the second half of 2009. From Genovis’ side, the sales process begins with training sales representatives and product specialists at the respective distributors. New customers usually want to test the products on a small scale first, followed by an evaluation and decision-making process before making a purchase. Genovis’ objective to achieve a positive cash flow by the latter portion of 2008 remains unchanged, and is primarily based on revenues from collaboration with partners in some of our projects within the frame of developing our technology platform, in combination with budgeted direct sales to customers. Our ability to use our technology and synergistic effects with different partners is a strength that allows us to spread the risk and improve cash flow via new business concepts based on our technology platform. Genovis will not commercialize business concepts under its own management, in which particles can be used in new applications such as drug delivery and diagnostics completely; rather, revenues will be generated through R&D partnerships, licensing, and OEM products. We may also apply this business model to some of the products that we have already launched, in order to cost-effectively achieve a larger market share with early revenues. By focusing on what we do best and choosing a business model based on the premises for each product, we will continue working toward our objectives for 2008.

Outlook
The Board of Directors has the explicit aim of achieving positive earnings and cash flow during the fourth quarter of 2008, based on revenues from collaborations with partners, within the frame of developing our technology platform, as well as direct sales to customers.

Operations
Second Quarter 2008
Genovis products are based on the company’s patented NIMT® technology platform, which uses nanometer-sized particles and their technical advantages as tools in biomedical research and diagnostics.
During the second quarter Genovis continued to work toward becoming a leading supplier of nanoparticles in biomedical applications for the global Life Science market. Genovis mainly focuses on customers who work with advanced research in pharmaceutical companies or within the academic research community. Efforts to establish sales, training, and support teams have continued throughout the quarter. Genovis has continued the work initiated during the first quarter to establish sales channels via new distributors in Europe and also marketed the technology at various industry-specific conferences and scientific meetings.
The Genovis product portfolio consists of nano-sized particles, a group of proteins, and the know-how to use them as effective research tools. Today Genovis market products in three different areas of application: imaging, biomolecule delivery, and antibody tools.
All Genovis products for imaging and delivery are based on the superparamagnetic nanoparticles NIMT®FeODots. Genovis’ considerable experience with superparamagnetic nanoparticles resulted in a collaboration with Magnabeat in Japan during the second quarter. Magnabeat produces and develops heat-responsive magnetic nanoparticles and applications for the separation of biological molecules. If successful, this partnership will benefit both Genovis and Magnabeat commercially and provide good opportunities for Genovis to become established on the Japanese market.

Areas of Application

Imaging
Imaging, a market segment undergoing strong growth, is used by researchers for in vivo and ex vivo studies. In order to see what happens in a cell and to be able to follow the cell inside an animal model, the cell must be marked in some way. One method is to introduce magnetic nanoparticles into the cell, NIMT® FeOlabel, and then follow the cell using magnetic resonance imaging (MRI).
The objective is for customers to be able to use Genovis products from the first tests in test tubes to more advanced experiments in animal models (in vivo).

Biomolecule Delivery
There is a large market for technologies that deliver molecules (e.g., DNA or genes) into cells. One such technology is NIMT®FeOfection, which offers high efficiency and low toxicity compared with rival products.

RNAi is another field undergoing dramatic growth, where researchers are interested in technologies to silence gene activity in order to treat conditions such as viral infections, cardiovascular diseases, cancer, and metabolic diseases in the future. With its high efficiency and low toxicity, Genovis’ NIMT®FeOfection is also extremely suitable for these studies.

Antibody Tools
FabRICATOR®is a genetically modified enzyme that cleaves antibodies into two parts, a Fab fragment and an Fc fragment. Unlike other technologies on the market, FabRICATOR cleaves all antibodies in a very short time in exactly the same place, and each antibody is only cleaved once.
FabRICATOR is also sold as a kit that allows customers to cleave and isolate pure Fab fragments in less than one hour, unlike other methods which may take up to twenty-four hours to achieve the same results.

Geographic Markets
The market for the products Genovis develops and markets is currently estimated at about USD 900 million. The North American market is the largest (about 40%), followed by the European market (35 %), while the Asian market (25 %) is the fastest growing geographic market.
During the first half of the year Genovis entered into four distribution agreements for its products in the areas of biomolecule delivery, imaging, and antibody tools. Sales representatives have been trained and sales in the new markets have begun. Genovis expects the inflow of orders to improve during the third and fourth quarters.
North America
Genovis is represented through its subsidiary Genovis Inc. and will expand operations with local distributors.

Europe
Nordic Biolabs is a leading supplier of products for medical research, diagnostics, microbiology, and transfusion drugs, and represents more than 40 strong suppliers and brands. Its customers are labs in hospitals, universities, and the pharmaceutical and biotech industries. Nordic Biolabs has initiated sales to customers.

Stratech Scientific Ltd, with headquarters in Suffolk, UK, is an efficient company that has delivered competitive, high-quality, reliable products to research laboratories in the UK and the rest of Europe for 25 years. Stratech will initiate sales to customers during the third quarter.
Teknokroma is an international enterprise with 30 years of experience of chromatography and a product portfolio consisting of more than 40,000 products. With a team of highly qualified chemists, pharmacists, and technicians, Teknokroma will begin sales during the third quarter.

Asia
Di Biotech Ltd in Korea, a spin-off from Pharmacia Biotech Korea, was founded in 2007 and is a groundbreaking market leader in the Korean life science market. The company works closely with its customers, with a focus on three research areas: genomics, molecule interaction, and cell imaging. The company has initiated intensive efforts with customers and Genovis expects an increase in orders during quarters three and four.

Product Launch
During the second quarter Genovis launched the NIMT®FeOfection|TESTKIT, which contains all transfection reagents and the NIMT® Booster. Customers may choose from NIMT®FeOfection|YELLOW, PINK, or PURPLE, which provides them with the opportunity to determine the most appropriate reagent for their special application or cell line. During the third quarter Genovis will launch two new products, IgGZero and FcDocker. There will also be one product launch in the fourth quarter.

Sales
Second Quarter
Net sales during the second quarter amounted to SEK 37,000 (4,000). During the quarter two distribution agreements were signed, one with a distributor in the UK/Ireland and one with a distributor in Spain. Genovis has held training courses for the distributors in both the UK and in Spain/Portugal. The distributors will initiate sales of Genovis products during the third quarter and have therefore not yet generated any revenues for the company during the second quarter. The company’s revenues were primarily generated from its own sales of nanoparticles and proteins.

Net Result
Second Quarter
The operating loss during the second quarter of the year was SEK 4,864,000 (loss: 2,199,000). The increased operating expenses are mainly attributable to increased personnel costs.
Depreciation and amortization during the second quarter amounted to SEK 258,000 (121,000) including SEK 155,000 (121,000) for tangible assets and SEK 103,000 (0) for intangible assets.
Loss after financial items was SEK 4,882,000 (loss: 2,206,000). Deferred tax during the quarter totaled SEK 1,335,000 (490,000)

Cash Flow and Financial Position
Second Quarter
Cash flow from operating activities was SEK –5,538,000 (loss: 2,879,000). Cash flow from change in working capital was SEK -1,541,000 (loss: 1,247,000). At the end of the period cash and cash equivalents amounted to SEK 4,408,000.
The Group’s net investments during the period totaled SEK 6,000 (586,000). Net investments included SEK 6,000 (134,000) for tangible assets and SEK 0 (452, 000) for intangible assets.

January – June
Cash flow from operating activities was SEK –9,800,000 (loss: 6,614,000). Cash flow from change in working capital totaled SEK -427,000 (loss: 2,209,000).
The Group’s net investments during the period totaled SEK 6,000 (4,611). Net investments included SEK 6,000 (642,000) for tangible assets and SEK 0 (3, 969,000) for intangible assets.

Organization and Personnel
Genovis’ Lund division is responsible for centrally coordinated functions in the business and finance areas, as well as production, research and development, and customer and sales support. The CEO and COO have overall responsibility for the group’s business.
Genovis Inc. USA is responsible for sales in the US market.
The number of employees in the company has been constant during the second quarter. At the end of the period the Group had twelve employees, eleven in the parent company and one in the US, compared with ten persons in the parent during the same period last year.

Significant Events after the End of the Period
No events of significance to the company occurred after the end of the period.

Other Information
Risks and Uncertainties
Genovis’ business risks include the risk that anticipated revenue might not materialize and difficulties in retaining skilled personnel. Genovis’ general view of the financial risks that could affect operations have not changed since the description published in the most recent annual report. For a detailed overview of the company’s financial risks please refer to page 41 of Genovis’ 2007 annual report.
Warrents
Genovis has issud 187,000 warrants for subscription by the CEO, senior executives, and other employees on equal terms. The warrants may be exercised for subscription of shares between February 28, 2012 and May 31, 2012. When all warrants are fully exercised the company’s share capital will increase by a total of SEK 74,800 through the issue of 187,000 shares, with a par value of SEK 0.40. If the warrants are fully exercised the new shares will constitute 1.7 % of capital and votes.

wkr0003.pdf

Interim report January – March 2008

Q1 2008
• Consolidated net sales totaled SEK 106 thousand.

• Consolidated earnings after financial income and expense totaled SEK –4,941 thousand.

• Cash and cash equivalents at the end of the period totaled SEK 873 thousand.

The group was formed in Q4 2007 and present no comparative figures for the period, instead the figures of the parent company are presented.

Significant events in Q1

• Genovis launched a new product, FabRICATOR® kit, that cleaves antibodies and isolates pure Fab-fragments in 30 minutes.

• Genovis enters into distribution agreement with Nordic Biolabs on the Swedish and Danish markets.

• Genovis enters into distribution agreement with DI Biotech on the Korean market.

• During the period Genovis initiated a new share issuing of 15 MSEK with preferential rights for current shareholders.

Significant events after the end of the period
98 % was subscribed with preferential rights in the new share issue that closed on April 7. Shares that was subscribed without preferential rights will be allocated to subscribers in relation to the shares they owned on the record day. Four existing shares on the record day gave shareholders the right to subscribe for one new class B share to the issue price of seven Swedish kronor. The new share issuing will provide the company with SEK 15 million before issue expenses. After the new issuing have been registered the share capital in the company will increase by SEK 870,898.4 and amount to 4,354,493.2. The number of shares in the company will amount to 796 000 class A-shares and 10,090,233 class B-shares. The share capital will be diluted by 20%.

Market outlook
The market outlook for the company’s products is good. With respect to Genovis’ products, research analysts expect a large increase in the use of nanotechnology in drug development and Genovis’ products offer several advantages compared with its competitors; for example, the magnetic core in the NIMT®FeOdot products is traceable with magnetic resonance imaging (MRI).
Strong growth is predicted for the products in Antibody Tools, driven by the endeavors of antibody based pharmaceuticals. In this field Genovis offers products such as the FabRICATOR®, which is both better and faster than any other product on the market today.

Forecast for full year 2008
Genovis does not make any forecasts, but states that interest in the company’s products is great. Strong sales growth is expected in 2008 and the board of directors expects Genovis to achieve positive earnings and cash flow during the second half of 2008.

Comments by the CEO

Sarah Fredriksson, CEO says:
Genovis has two clear priorities for 2008. The first is to launch sales channels in the United States and Europe and in selected parts of the Asian market. The second is sales. The first quarter has therefore focused on establishing contacts with various potential distributors. By the end of the period the first two agreements were signed. This means that as of the end of March and beginning of April we now have active sales activities directed toward customers and we can start working with a more focused approach to initial sales. We expect to have an additional five to seven distribution agreements completed by the end of the year. I am convinced that Genovis must have patience and focus efforts on carrying out its strategy in order to build up a large and dynamic customer base. It will take two years before we have fully expanded and established sales channels. Parallel to the expansion of sales channels we will strengthen our business model with new products developed in-house and, if the opportunity should present itself, even via acquisition.
The distributor network requires training, sales support, customer support, and follow-up, which has placed new demands on Genovis’ organization. Genovis in Lund handles training and sales support, while the Genovis office in the United States is responsible for marketing activities and sales in the US. The US market is large and can be divided into several geographical segments. Our strategy in the US is in part to grow organically and work with direct sales and in part to simultaneously establish agreements with partners for sales via distribution, with a focus on California and Boston.
The new share issue that was initiated during the period is crucial for achieving our objectives for the year. I am therefore extremely pleased that it was oversubscribed. I have previously noted that 2008 presents several exciting challenges for Genovis. During the period we handled the first of these challenges and the organization has quickly been adapted to the new duties.

Operations
Genovis, which was founded in 1999, has developed a technology known as Nano Induced Magnetic Transfer (NIMT®). The technology has resulted in several products based on NIMT® FeOdots, nanometer-sized superparamagnetic particles, which are a product in themselves, but which also can be produced with several different surfaces to be able to fit into different areas of application. In 2007 Genovis acquired a series of patents for biotech applications of proteins. By linking these proteins with Genovis’ existing technology, the company has created unique new products.

Twelve products have been launched and are marketed in three types of applications: imaging, biomolecule delivery, and antibody tools. All products are consumables intended for laboratory use in preclinical research and are used by researchers at pharmaceutical companies, biotech companies, and within the academic research community.

Imaging
FeOlabel – In order to see what happens in a cell and to be able to follow the cell within an animal, the cell needs to be marked. One method is to introduce magnetic nanoparticles into the cell, NIMT® FeOlabel, and then follow the cell using magnetic resonance imaging (MRI).

Biomolecule delivery
FeOfection – Researchers who want to discover the cause of a disease, or who want to investigate the structure and function of proteins study individual cells, which are the smallest components in each organism. One way to follow what happens inside an individual cell is to introduce a new gene into the selected cell by means of NIMT® FeOfection.
FeOsilence (RNA-interference) – Many diseases can be treated by mitigating the activity of certain genes. Researchers have great hopes that in the future they will be able to use RNA interference to treat diseases such as viral infections, cardiovascular diseases, cancer, and metabolic diseases.

Antibody Tools
FabRICATOR® – Researchers are currently heavily involved in investigating the use of antibodies as medications, but antibodies are also used in research and medical care for several applications, including diagnostics, analysis, and purification. Researchers would like to be able to cleave an antibody and FabRICATOR® is an enzyme that cleaves in a specific place so that the antibody can be divided into two parts.

Product launch
During the first quarter of the year Genovis launched its new FabRICATOR®Kit, which is a combination of a unique enzyme and nanostructures that Genovis developed in-house. The FabRICATOR®Kit cleaves antibodies and isolates pure Fab fragments in 30 minutes with perfect final results – unlike current methods, which can take as much as twenty-four hours to achieve the same results. With the launch of the new Genovis product the market has gained a new method that is both better and faster than any other method available on the market today.

Geographic markets and market strategy
The market for the products Genovis develops and markets is currently estimated at about USD 900 million. The North American market is the largest (about 40%), followed by the European (35 %), while the Asian market (25 %) is the fastest growing geographic market. The intention during 2008 is to affiliate with strategic distributors that have strong customer relationships in those markets that are most important for Genovis, including the Nordic home market, the rapidly growing Asian markets, and the US. Genovis is represented in the US by the subsidiary Genovis Inc.
So far this year, Genovis has closed two distribution agreement deals. The first was reached with the Swedish distributor Nordic Biolabs, a leading supplier of products for medical research, diagnostics, microbiology, and transfusion medicine that represents about 40 strong vendors and brands, with customers in laboratories, hospitals, and universities, as well as within the pharma and biotech industries.
The other agreement was reached with Di Biotech Ltd in Korea. The company, a spin-off from Pharmacia Biotech Korea, was founded in 2007 and is a groundbreaking market leader in the Korean life science market. The company works closely with its customers, with a focus on three research areas: genomics, molecule interaction, and cell imaging.

Sales, Q1
Net sales during the first quarter were KSEK 106 (1). During the quarter Genovis signed two distribution agreements and the company arranged training programs for the distributors in both Sweden and Korea. The distributors will initiate sales of Genovis’ products during the second quarter and have therefore not yet generated any revenues for the company during the first quarter.

Net result, Q1
The operating loss during the first quarter of the year was SEK –4,869 (–2,406). The increased operating expenses are mainly attributable to increased personnel costs. Depreciation during the first quarter was KSEK -192 (-108), including KSEK 142 (108) for tangible fixed assets and KSEK 50 (0) for intangible assets. Profit/loss after financial items was KSEK -4,941 (-2,428). Deferred tax during the quarter totaled KSEK 1,378 (806).

Cash flow and financial position, Q1
Cash flow from operating activities was KSEK –4,262 (-3,695). Cash flow from change in working capital totaled KSEK 1,114 (-962). At the end of the period working capital was KSEK 873.
The Group’s net investments during the period amounted to SEK 0. Net investments included SEK 0 (134) for tangible fixed assets and SEK 0 (452) for intangible fixed assets.

Organization and personnel
Genovis’ Lund division is responsible for centrally coordinated functions in the business and finance areas, as well as production, research and development, and customer and sales support. The CEO and COO have overall responsibility for the Group’s business.
Genovis Inc. USA is responsible for sales on the American market as well as worldwide marketing and market development.
The number of employees in the company has been constant during the first quarter. At the end of the period the Group had twelve employees, eleven in the parent company and one in the US, compared with eight persons in the parent during the same period last year.

Other information
Parent company
Net sales during the first quarter were KSEK 94 (1). Profit/loss after financial items totaled KSEK -4,946 (-2,428). Cash and cash equivalents at the end of the period totaled KSEK 228 (13,754). Net investments of the parent company included KSEK 0 (134) for tangible fixed assets and KSEK 0 (452) for intangible fixed assets.

wkr0003.pdf

GENOVIS: ANNOUNCEMENT OF ANNUAL REPORT 2007

The complete annual report 2007, will as from April 4, 2008 be available at the company’s webpage www.genovis.com and at the company’s head office, address Scheelevägen 19F, SE-211 19, Lund, Sweden. The annual report may also be obtained from the company via telephone, +46-46 10 12 38.

The annual report in English will be available at the company’s webpage April 8, 2008.

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Year-End report 2007

Financial information
• Group net sales amounted to KSEK 256 for the year and KSEK 251 for 4Q.

• Consolidated earnings totaled KSEK -8,578 for the year and KSEK -2 489 for 4Q.

• Earnings per share for the period amounted to SEK -0.99.

• Cash and cash equivalents at the end of the period totaled KSEK 491.

• Through 2006, the Genovis Group’s financial presentation was prepared as per the Swedish Annual Accounts Act and generally accepted Swedish accounting principles. The 2007 consolidated accounts and this interim report are the first to be prepared as per the IFRS.

Key events in 2007

4Q

• Genovis established a subsidiary in the US, the single largest market for Genovis’ products. Chris Wilkins was hired as CEO of the subsidiary and will also head up global marketing.

• In cooperation with Lund University, Genovis initiated a project to evaluate the nano-induced magnetic transfer (NIMT®) platform as a tool for facilitating animal model studies.

2007

• As a first step toward international expansion, Genovis opened a sales office in Hong Kong. Of all the markets Genovis targets, Asia exhibits the greatest growth.

• On September 27, the company’s new web site was launched with online sales. The new web site will provide customer relationship management (CRM) support to our partners and distributors.

• In May, Genovis concluded an agreement with Hansa Medical AB to acquire patents and licenses related to biotechnical industrial applications for a group of bacterial surface proteins.

• Genovis combined its NIMT® technology platform with two bacterial surface proteins that, together with specific nanoparticles, become a unique tool for fragmenting antibodies. The new product was launched with the name FabRICATOR®.

• Genovis had a patent approved by the South Korean patent office. The patent describes the technical grounds behind the NIMT® technology and is valid until 2019.
 

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Genovis 3Q 2007 interim report 1 January – 30 September 2007

Genovis is a biotech company with cutting-edge expertise in nanotechnology and nanoparticles. Its patented nano-induced magnetic transfer (NIMT®) technology was developed to enable the life science industry to conduct efficient preclinical research. The Genovis stock is listed on the First North stock exchange (OMX). Mangold Fondkommission AB is a certified advisor and guarantor of liquidity for Genovis.

From the CEO
On September 27, 2007 Genovis began offering its products to various customers via online sales. Since we announced our decision to launch our own web store earlier this spring, we’ve worked intensively to enhance our customer proposition by developing several products and by investing in a web-based platform that now supports our entire value chain from production to customer. Fast-paced development during the period now bears fruit. Interest in our web store products is high, and we’re delighted to report that the results are visible, i.e., sales of our first products.

We will continue with the fast development pace and will launch several new products within the next six months. We’ll also build an efficient marketing and business development organization that will serve the largest international markets.

Sarah Fredriksson
CEO, Genovis AB

Operations
Genovis is a biotech company that develops and markets products within medical research. It delivers patented technology, products, and support that facilitate pharmaceutical development and preclinical research companies’ operations. The Genovis technology, which is based on nano-induced magnetic transfer (NIMT® ) technology is a method and a technical tool that includes nanoparticles and laboratory instrument.

Genovis currently provides products within five different product groups: NIMT® FeOfection, NIMT® FeOsilence, NIMT® FeOdots, NIMT® FeOlabel, and NIMT® FabRICATOR. The company launched these products on September 27, 2007. All commercial products are intended for laboratory use and are marketed for two different applications:
• Biomolecule delivery: Gene transfer, RNA interference, magnetic marking, and cell sorting.
• Separation and Antibody Engineering: Magnetic separation of biomolecules and preparation and fragmentation of antibodies.

In May 2007, Genovis signed a contract with Hansa Medical AB regarding acquisition of patents and licenses for biotechnical industrial applications for a group of bacterial surface proteins. Genovis

Markets the rights along with its nanoparticles (i.e., NIMT® FeOdots) in totally new laboratory products intended for preclinical research. The proteins included in the contract will be primarily used as components in products intended for antibody-based research and production of antibody fragments. Genovis combined its technology platform with two of the bacterial surface proteins that it acquired from Hansa Medical AB and created a unique tool for fragmenting antibodies. The antibody fragmentation technology is increasingly in demand; it is used, e.g., for cell culture analyses, tissue sample dyeing, and for avoiding immune system activation during new antibody-based medicine development. At the end of September, the first product (NIMT® FabRICATOR) in this area was launched with the company’s other products.

In September 2007, Genovis became established on the Asian market with a sales office in Hong Kong. Several Asian countries are investing heavily in the life science industry, primarily in stem cell research, vaccine development, and RNA interference. Björn Hammarberg heads the Asian initiative; he represents Genovis in the Asia-Pacific region and in the Middle East. He has extensive experience in molecular biology and has worked with business development and marketing of products and services for the biotech industry and research institutions worldwide. He has implemented projects for companies such as AstraZeneca and PALL Life Sciences.

On September 27, 2007 the company’s new web site was launched to enable online sales. Customers and potential customers in these and other regions demonstrated an interest: Australia, Brazil, Europe, India, Mexico, Singapore, South Korea, and the US. Genovis intends to be represented on several of these markets, and the new web site supports partners’ and distributors’ CRM efforts.

Personnel
In 3Q 2007, the number of employees remained constant. At the end of the period, Genovis had 10 employees (5).

Profit/loss
Revenue streams include instrument rentals and labor market contributions; total revenue for the period reached SEK 44,000 (SEK 108,000). Rentals brought in SEK 5,000 and contributions brought in SEK 39,000. Loss during the period stood at SEK 6,090,000 (SEK -3,401,000).

Investments
During the period, investments in intangible assets (continued patents and prototypes development plus intellectual property rights acquisition) totaled SEK 4,372,000 (SEK 2,476,000). Investments in property, plant, and equipment totaled SEK 651,000 (SEK 209,000).

Cash flow and financial position
Cash flow from on-going operations before changes in working capital was SEK –7,676. Cash flow from financial operations was SEK –1,352,000. On 30 September 2007, cash and cash equivalents stood at SEK 3,856,000 (SEK 2,696,000).

Genovis B shares
Genovis B shares are listed on First North, which is a part of the OMX Nordic Exchange.

Key events after period’s end

Customers
Genovis received its first customers after its online sales were launched.

Subsidiary in the US
Genovis set up Genovis Inc., a subsidiary in Boston. Christopher Wilkins was hired as the CEO for Genovis Inc. He brings extensive biotech industry experience to the Genovis operation. Wilkins has held executive positions in sales, marketing, and business development at Cepheid, Inc. and MJ Research, Inc. (owned by Bio-Rad since 2004). He earned his Ph.D. in Genetics at Cornell University in Ithaca, New York.

Genovis Group marketing manager
Going forward, Wilkins will be responsible for global marketing. The US is the single largest market for Genovis products, which is why Wilkins will be responsible for all marketing efforts carried out by the Group.

Accounting principles
The interim report was prepared as per RR20. Accounting principles, estimates, and appraisals remain unchanged compared to 2006.

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Genovis Quarterly Report – Q2 January 1 – June 30, 2007

Remarks from the CEO
Getting underway with sales and beginning to generate revenues is one of the most important milestones in the development of Genovis. When the Genovis Web Shop opens on September 27, we will be ready to begin selling some 20 products based upon the NIMT® technology.

During the first half of the year, Genovis has been investing in production processes, infrastructure and IT-based support functions in order to be able to handle global support, logistics and sales in as optimum a manner as possible. The task with the highest priority we now face is to establish sales and marketing channels in the US, Europe and Asia, either via partners or under our own auspices. A global web shop requires global marketing.
Genovis ambition is to start marketing activities targeted at customers within niche markets for our products in both the US and Asia before the end of the year.

Sarah Fredriksson
CEO Genovis AB

Operations
Genovis has developed a patented technology, called NIMT™ (NanoInducedMagneticTransfer) technology, which is intended to be used as a research tool in preclinical research as well as in the development of pharmaceuticals. The products that are derived from the concept include a line of different nanoparticles, NIMT™ FeOdots, and a laboratory instrument, NIMT™ NanoHeater, which is used to control the properties of the nanoparticles. All products are intended for laboratory use and for multiple applications: gene transfer, RNA interference, magnetic labeling and sorting of cells as well as magnetic separation of biomolecules.

Since the fourth quarter of 2006, Genovis has carried out a number of reference projects. Genovis NIMT™ technology has been tested in the research enterprises of eight different groups in applications that include gene transfer, magnetic labeling and siRNA delivery. The groups included two Swedish biotechnology companies, Lund University, Karolinska Institutet, Uppsala University, NIH (the National Institutes of Health, in the US) and SCRIPPS (the Scripps Research Institute, also in the US).

The objectives Genovis had in carrying out this reference project included performing quality assurance on the technology by testing its technical performance on difficult tasks and cells that are difficult to work with, based on the customer’s definition. The project has also contributed to giving Genovis feedback regarding its production, logistics and packaging solutions. On the overall, the project has equipped Genovis with additional expertise in issues concerning customer support and customized solutions in different prioritized customer segments.

On May 3, 2007, Genovis entered into an agreement with Hansa Medical AB on the acquisition of a patent and license for biotechnical industrial applications for a group of bacterial surface proteins. Genovis will be marketing the rights together with the company’s NIMT™ FeOdots nanoparticles in completely new laboratory products intended for preclinical research. The proteins that are included in the agreement will first and foremost be used as components in products intended for antibody-based research and production of antibody fragment.
Genovis has combined its technology platform with two of the bacterial surface proteins that the company acquired from Hansa Medical AB and created a unique tool for fragmentation of antibodies. Antibody fragmentation is a technology for which there is increasing demand and which is used in, among other things, analyses of cell cultures , coloring of tissue samples and in order to avoid activating the defenses of the immune system in the development of new antibody-based drugs. The new product line will begin to be sold when the company opens its web shop in September.

Organization
During the second quarter the number of employees has increased by one full-time position and one part-time position. At the end of the period Genovis had 10 (5) employees.

Income and quarterly profit or loss
Revenues for the period of KSEK 131 (KSEK 56) are comprised of instrument rental KSEK 5 and KSEK 126 in the form of labor market contributions and grants. The results for the period comprised KSEK – 3,339 KSEK (KSEK – 2,079).

Investments
During the period, investments in non-tangible assets (continued development of patents and prototypes as well as acquisition of intellectual property rights) were made of KSEK 3,969 (KSEK 1,542). Investments in tangible assets involving, among other things, laboratory and computing equipment were made totaling KSEK 642 (KSEK 205).
Financial position and liquidity
Cash flow from on-going operations before changes in funds tied up in operations was KSEK –4,405. Cash flow from financial enterprises was KSEK -65. Liquid assets as at June 31, 2007, comprised KSEK 7,060 (KSEK).

Genovis class B shares
Genovis class B shares are listed on First North, which is a part of the OMX Nordic Exchange.

wkr0011.pdf

Genovis releases its Annual Report for 2006

Significant events during 2006

• A new share issue for about SEK 10 million was carried out in March for the purpose of
financing the shift from research and development to production. The new share issue was
oversubscribed by around 90 percent.

• Product launch: The Genovis NIMT™ Nanoheater and consumable NIMT™ FeOdots
were launched at the BioTech/ScanLab trade fair in Copenhagen. The applications have
relevance to three different business areas: gene transfer, RNA interference and magnetic
labeling of cells.

• Change of market for the company’s Class B shares. Genovis moved from the Öresund
List/Nordic OTC to First North, which is a part of the Nordic OMX stock exchange.

• A research group from the NIH, National Institutes of Health, Maryland, USA, has used
Genovis products, NIMT™ FeOdots, in order to track treated stem cells inside an animal
model using MRI.
• A preferential rights issue for SEK 20.3 million was carried out in December in order to
maintain the pace of commercial development and to finance production. The preferential
rights issue was oversubscribed by about 99 percent.

Sarah Fredriksson
CEO, Genovis AB

wkr0016.pdf

Genovis releases its Annual Report for 2006

Significant events during 2006
• A new share issue for about SEK 10 million was carried out in March for the purpose of
financing the shift from research and development to production. The new share issue was
oversubscribed by around 90 percent.
• Product launch: The Genovis NIMT™ Nanoheater and consumable NIMT™ FeOdots
were launched at the BioTech/ScanLab trade fair in Copenhagen. The applications have
relevance to three different business areas: gene transfer, RNA interference and magnetic
labeling of cells.
• Change of market for the company’s Class B shares. Genovis moved from the Öresund
List/Nordic OTC to First North, which is a part of the Nordic OMX stock exchange.
• A research group from the NIH, National Institutes of Health, Maryland, USA, has used
Genovis products, NIMT™ FeOdots, in order to track treated stem cells inside an animal
model using MRI.
• A preferential rights issue for SEK 20.3 million was carried out in December in order to
maintain the pace of commercial development and to finance production. The preferential
rights issue was oversubscribed by about 99 percent.