GENOVIS SIGNS DISTRIBUTION AGREEMENT WITH BIOLEGIO
Genovis has developed unique technological aids for medical research. In September 2007 the products were ready to be marketed to customers. Since then Genovis is engaged in introducing the products to customers and continues to expand its sales channels in Europe.
To date Genovis has signed agreements with distributors for the Korean, Swedish, Danish, British, Irish, Spanish, and Portuguese markets. Genovis works through its subsidiary Genovis Inc in the United States.
Through this latest distribution agreement Genovis is taking another important step in its expansion on the European market.
“During this summer we have worked with two reference projects in the Netherlands and Biolegio, with it’s effective and well trained teem, has been a valuable link in these projects. Central Europe is a most important market to us and I look forward to start working towards customers together with Biolegio as distributor”, sais Sarah Fredriksson, CEO Genovis
Biolegio is a Dutch oligonucleotide synthesis company, founded in 1996. Being in the business for over ten years Biolegio has obtained great experience in the oligo synthesis market. Biolegio supplies high quality DNA/RNA oligos, probes and siRNAs to academic hospital, universities and biotechnology company’s throughout Europe. With a well educated and trained team, Biolegio provides superior quality and service.
” Next to the synthesis facility, Biolegio Lab Equipment is a distributor for small bench equipment for the molecular research market. Genovis will fit our product range perfectly thinking of our siRNA synthesis. We look forward to work together with Genovis, since we are looking for high quality products to fit our product range. All products that we are distributing must qualify our customers needs concerning quality and the service they are used to from our own synthesis facility. We think Genovis will open new perspectives in transfection and this will give Biolegio an even stronger position in the research market”, says Ruud van der Steen, CEO
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.
Genovis Enters into Distribution Agreement with Spanish Teknokroma
Genovis has developed unique technological aids for medical research. In September 2007 the products were ready to be marketed to customers. Since then Genovis has worked on introducing the products to customers and continues to expand its sales channels in Europe.
So far this year Genovis has signed agreements with distributors for the Korean, Swedish, Danish, British, and Irish markets. In the United States Genovis works through its subsidiary Genovis Inc.
Through the Spanish distribution agreement Genovis is now taking yet another important step in its expansion in the European market.
” Teknokroma is a key player in Spain and Portugal and this agreement is yet another step in our strategy to build a sales organization together with effective and experienced partners in their respective home markets. ” Teknokroma has extensive practical experience in sales to laboratories as well as the well-established customer contacts we need now that we are introducing our products,” says Sarah Fredriksson, CEO of Genovis.
Teknokroma is an international enterprise with 30 years of experience in chromatography and a product portfolio consisting of more than 40,000 products. With a team of highly qualified chemists, pharmacists, and technicians in an environment that encourages initiative, creativity, and enthusiasm, Teknokroma ensures satisfied customers.
“Our focus is to introduce the latest technologies and we are therefore extremely pleased to be able to work with Genovis, which has the latest and most advanced technology and completely unique products. The Spanish market for gene transfer techniques has experienced incredible growth in recent years and through this agreement we will become a part of this exciting trend,” says Rafael Nadal, President of Teknokroma.
Genovis offers new technological solutions in transfection, RNAi, imaging, and antibody tools to customers who work with sophisticated research in pharmaceutical companies and within the academic research community. Its market strategy to provide customers with effective support and service is to choose partners with strong customer relations in different geographic markets in the product families in which Genovis is active.
GENOVIS ENTERS INTO COLLABORATION WITH JAPANESE COMPANY MAGNABEAT INC.
Genovis is currently represented through distributors in the Korean, Swedish, Danish, British, and Irish markets. In the United States, Genovis works through its subsidiary Genovis Inc. The intention during 2008 is to reach agreements with strategic distributors and partners on all of Genovis’ important markets, including the rapidly growing Asian market.
“We are extremely pleased that Magnabeat, with Chisso as a strong owner and its expertise in polymer materials and production of magnetic nanostructures, has chosen us as a partner. The goal is to take full advantage of the potential in the combination of the two companies’ technologies and intellectual property through completely unique new products in transfection (gene transfer). If successful this partnership will benefit both Magnabeat and us commercially, while providing us with an excellent opportunity to become established on the Japanese market,” says Sarah Fredriksson, CEO of Genovis.
Magnabeat, which is headquartered in Kobe-shi, Hyogo, Japan, manufactures and develops thermo responsive magnetic nanoparticles and applications for biomedical research within the field of biomedicine. The company was founded in 2005 as a spin-off of Chisso Corporation. Chisso Corporation, which owns 90% of Magnabeat, has long been a leader in the Japanese chemical industry.
“We look forward to a rewarding partnership with Genovis, a company with the latest and most advanced technology based on magnetic nanoparticles. By cooperating and combining our technologies we aim to offer the market products that neither of us could produce on our own. With this collaboration we hope to be able to advance our technology one step forward,” says Noriyuki Ohnishi, CEO of Magnabeat Inc.
Genovis initiated sales of its products in September 2007 and offers new technological solutions in transfection, RNAi, imaging and antibody tools to customers who work with sophisticated research in pharmaceutical companies and within the academic research community.
GENOVIS SIGNS DISTRIBUTION AGREEMENT WITH STRATECH SCIENTIFIC LTD
Genovis, which offers new technological solutions to customers who work with sophisticated research in pharmaceutical companies and within the academic research community, initiated sales of its products in September 2007. Until today, Genovis has been represented through distributors on the Korean, Swedish, and Danish markets. In the United States, Genovis works through its subsidiary Genovis Inc. The intention during 2008 is to reach agreements with strategic distributors with strong customer relations in other markets, including the European and Asian markets.
“We are extremely pleased that Stratech Scientific Ltd with its knowledgeable product specialists and extensive experience in sales to Genovis’ target group has chosen to distribute our products. This partnership strengthens the Genovis brand, which will also benefit our efforts in other markets,” says Sarah Fredriksson, CEO of Genovis.
Stratech Scientific Ltd, with headquarters in Suffolk, UK, is an efficient company which for 25 years has delivered competitive high-quality and reliable products to research laboratories in the UK and the rest of Europe.
“We offer a comprehensive range of antibodies, reagents and cells in areas such as immunology, cell biology and specialist fields like neuroscience. Now that we can also offer Genovis’ products, which are truly on the cutting edge in one of the hottest research areas today, we strengthen our offering to our customers and hope to be able to contribute to the increased commercial success of Genovis” says Tony Savill, Commercial Director
Genovis currently markets products in transfection, imaging, and antibody tools. Genovis’ market strategy to provide customers with effective support and service is to choose partners with strong customer relations in different geographic markets in the product families in which Genovis is active. Genovis will be represented together with Stratech Scientific at MICROSCIENCE International Conference and Exhibition, London’s ExCeL, June 2008 23 – 26, in booth F3.
GENOVIS IMPLEMENTS CONVERSION TO ONE CLASS OF SHARES AND ISSUES WARRANTS
According to the resolution of the Annual General Meeting on April 17, 2008, conversion to one class of shares will take place as of the cut-off date of June 2, 2008, after which the company will have 10,886,233 shares.
According to the resolution at the 2008 Annual General Meeting the company will issue 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.
GENOVIS: COMMUNIQUÉ FROM ANNUAL GENERAL MEETING FOR GENOVIS AB (PUBL) APRIL, 17 2008
The balance sheet and income statement were ratified.
The Board and the CEO were granted a release from liability.
The Board shall consist of six ordinary members with no alternates until the next Annual General Meeting.
Hans Göran Arlock was re-elected as chairman of the board.
Nicklas Gerhardsson and Bo Håkansson were re-elected.
Three new board members were elected; Carina Schmidt, Thomas Laurell and Thomas Svensson.
Price Waterhouse Coopers was elected as auditor.
A Nominating Committee shall be created consisting of representatives for the three shareholders
who at the end of the third quarter of the year 2008 own the most votes in the company.
Guidelines for remuneration for the CEO and other leading employees were ratified in accordance
with the Board’s proposal.
The general meeting resolves to delete sections 6 and 7 of the Articles of Association in their entirety to allow only one class of stock.
The Board of Director’s proposal for issuance of warrants with the right to subscribe to new shares was ratified in accordance with the Board’s proposal.
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.
GENOVIS: THE NEW SHARE ISSUE WAS OVERSUBSCRIBED
98 % of the new share issue was subscribed with preferential rights. The rest of the shares were subscribed without preferential rights within the frame of the highest amount of the issuing. The issuing ensures Genovis approximately 14 MSEK after issue expenses. The number of shares increased from 8,708,987 to 10,886,233.
Contract note and notification of allotment of shares subscribed without subscription rights is estimated to be sent out around the April 14, 2008.
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.
