Genovis 3Q 2007 interim report 1 January – 30 September 2007
• The company launched a new web site for online sales.
• Genovis opened a sales office in Hong Kong in September.
• Patents acquired during 2Q 2007 generated new products.
Key events after period’s end
• Sales started, products delivered to customers.
• US subsidiary established, subsidiary manager recruited (also responsible for global marketing)
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.
Genovis launches US operation, recruits American manager
R. Christopher Wilkins.
Due to demand for its products in the US market, Genovis hired Christopher Wilkins to head its US subsidiary; his responsibilities also include global marketing initiatives.
”I’m delighted that Chris chose Genovis,” says Sarah Fredriksson, CEO of Genovis AB. “Staffing is crucial when an operation like Genovis expands internationally. I’m convinced that Chris will drive the business in the right direction and enable successful global marketing activities.”
Wilkins brings extensive biotech industry experience to the Genovis operation. He 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 & Biochemistry at Cornell University in Ithaca, New York.
Genovis has also recently launched a new web site that enables online sales. The site’s first customers were in the US, which is the largest single market for Genovis products. Consequently, the company decided to establish Genovis Inc. Going forward, Wilkins will have primary responsibility for global marketing efforts.
“Heading up Genovis Inc. and having responsibility for global marketing is a great challenge,” says Wilkins. “The Genovis proposition includes top-quality products based on innovative technologies that can be utilized in a wide range of research applications. Building the US organization and enabling the company to realize its global potential is very exciting.”
Genovis is currently focusing on two business areas: bimolecular delivery and antibody engineering. Its product portfolio contains NIMT® FeOsilence, NIMT® FeOfection, NIMT® FeOlabeling, and NIMT® FabRICATOR. Further product launches are planned this autumn. While the company’s customers are spread across the entire US, one business-critical region is the Boston area in Massachusetts where Genovis Inc. is located.
Genovis’ Online Sales Generate First Revenues and Open Doors to New Markets
During the first few weeks the site attracted interest from Europe, the US, Australia, India, Korea, Singapore, Brazil, and Mexico, which now generate the first revenues. These markets are prioritized markets were Genovis intends to be represented. The new web site will help partners and distributors in their customer relationship management initiatives.
“Establishing online sales has been our strategy since the first test launch one year ago,” says Sarah Fredriksson, CEO. “Now we have a web site for online sales, as well as an underlying system and resources to be able to offer our customers good service and support. The web store will also facilitate future alliances with partners and distributors in different geographic markets.”
Genovis currently offers products in two business areas: biomolecule delivery and antibody engineering, as well as customer-specific solutions. The company’s product portfolio contains the following products: NIMT® FeOsilence, NIMT® FeOfection, NIMT® FeOlabeling, and NIMT® FabRICATOR. The company plans to launch additional products during the autumn.
Genovis bets on growing markets in Asia – continues expansion with new office in Hong Kong
The Asian effort will be headed by Björn Hammarberg, who will represent Genovis in the Asia-Pacific region and the Middle East. Björn Hammarberg has many years of experience from molecular biology, including from KTH. He has also worked with business development and the marketing of products and services to the biotechnology industry and research institutes the world over on behalf of companies such as AstraZeneca and PALL Life Sciences.
“It is incredibly exciting to have the opportunity to participate early in the commercialization phase and subsequently be a part of building the business in the Asia-Pacific region and the Middle East,” says Björn Hammarberg, the Genovis representative in Hong Kong. “Genovis technology, expertise and products are quite timely with respect to the massive efforts that are being made in stem cell research and RNAi in many quarters of the region.”
With the new office in Hong Kong and by hiring Björn Hammarberg Genovis is gaining a platform from which to proceed for its business development and marketing.
“Obviously we wish to be competing in the markets that are making investments and growing,” says Sarah Fredriksson, CEO of Genovis. “There is a strong drive in this market and a large demand for new technologies and products, which I hope that we will address and continue to develop. Initially, we will be focusing primarily on Singapore, Japan and South Korea.”
The market for Genovis products is growing annually by approx. 15-30 percent and Asia is one of the markets that is showing the strongest growth. The Genovis office in Hong Kong is yet another step in the company’s expansion internationally. Genovis will begin sales of its NIMT® technology for gene transfer, magnetic labeling and siRNA delivery directly to customers on September 27 of this year.
Genovis Quarterly Report – Q2 January 1 – June 30, 2007
• Reference project involving gene transfer, siRNA delivery and magnetic labeling of cells concluded with positive results
• A new business area and new products related to antibody fragmentation as a result of the acquisition of intellectual property rights
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.
Genovis main owner increases its voting rights
European Institute of Science AB has transferred all its Genovis AB series A shares to the main owner of the company, Farstorps Gård Förvaltnings AB, in exchange for a corresponding amount of series B shares (in total 175 990 shares). The transaction means that Bo Håkansson through his company Farstorps Gård Förvaltnings AB has increased the votes from 17 % to 27 % but without any change in its 30% capital share of Genovis. European Institute of Science reduces its votes from 11 % to 1% while its 2% share of the capital of Genovis remains unchanged. As a result of this transaction, European Institute of Science AB no longer has an insider position in Genovis AB.
Sarah Fredriksson
CEO Genovis AB
Genovis NIMT technology successfully meets expectations in important reference projects
Since the fourth quarter of 2006, Genovis has conducted a number of reference projects. Genovis NIMT™ technology has been tested by eight different research groups in applications involving gene transfer, magnetic labeling and siRNA delivery. The groups are located at two Swedish biotechnology companies, Lund University, Karolinska Institutet, Uppsala University, NIH (the National Institute of Health, in the US) and SCRIPPS Research Institute (also in the US).
The objectives Genovis for this reference project included performing quality assurance of the technology by testing its technical performance on cells that the customers had defined as difficult to work with. The project has also given Genovis valuable feedback regarding production, logistics and packaging solutions. On the whole, the project has provided Genovis with additional know-how that is useful in customer support and customized solutions in different prioritized customer segments.
“Now we know that our technology meets our own expectations as well as those of our customers”, says Sarah Fredriksson, CEO of Genovis. “We have a receipt showing that our NIMT™ technology is competitive internationally.”
The different research groups have worked with one or more different cells (for a complete list of the cells tested, see the homepage for Genovis at www.genovis.com). The reference groups have selected cells that are difficult or sensitive to work with, and for which they have actively searched for new methods that are milder to the cell. The NIMT™ technology from Genovis has turned out to be the answer.
“By running these projects we have had the opportunity to view our NIMT™ technology through the eyes of our customers, which is crucial to our future development work,” continues Sarah Fredriksson, CEO of Genovis. “Our nanoparticles, the NIMT™FeOdots, can easily be modified to suit customer needs. This shows the potential of the technology and it means that we can offer our customers great flexibility.”
Genovis will begin sales of its NIMT™ technology for gene transfer, magnetic labeling and siRNA delivery on a direct basis to its customers on 27 September this year.
Sarah Fredriksson
CEO Genovis AB
Genovis adds value to the NIMT™ – technology via acquisition of patents and opens a new business area for Genovis products
“Our goal is to market our nanopaticle technology and know-how under the NIMT™ trademark in applications where there is an obvious need for improved technologies,” says Sarah Fredriksson, the CEO of Genovis. Via the acquisition, we will access several attractive and useful building blocks for use in a series of products suitable for protein research.
The acquisition of the patent rights is a part of the strategy being pursued by Genovis of continually working with the safeguarding and expansion of its existing patent portfolio. The purchase sum will amount to SEK 2 million in cash reimbursement as well as a royalty on the future sales of products by Genovis.
Via the acquisition, Genovis will be active in four business areas: gene transfer, RNA interference, magnetic labeling and sorting of cells and protein research.
“The acquisition in combination with our core competence in biochemistry and molecular biology means that we will shortly be able to expand and supplement our offerings to our customers, first and foremost to customers involved with preclinical research,” says Sarah Fredriksson, the CEO of Genovis. There is a great interest in new techniques and reagens that can facilitate the development of antibody-based medicines. Our ambition is to launch these new products in conjunction with the opening of our web shop in September.
The intangible assets in Hansa Medical’s portfolio are built on the basis of extensive research concerning bacterial surface proteins. Hansa Medical is a wholly owned subsidiary of Biolin AB, which is listed on the Stockholm Stock Exchange.
Bo Håkansson is the Chairman of the Board for Biolin AB and a Board Member for Genovis AB. He declared himself to be disqualified from taking part in the matter, and hence participated neither in the decision nor in the preparation of the deal.
Genovis to open web shop for international sales in September
Copenhagen, Genovis will be launching a new web site with an integrated web shop on
September 27. Genovis develops and markets innovative tools for medical cell research. The
company share is listed on First North. The web-based sales will constitute a foundation for
the introduction of international marketing efforts.
The idea behind a new web site and web shop is for Genovis itself to be the driving force in
establishing its trademark, NIMT™, which includes a product portfolio containing the NIMT™
FeOdots nanoparticles and the NIMT™ Nanoheater laboratory instrument for, among other
things, gene transfer. Genovis views the new web site as one of a number of steps in the
inauguration of its international marketing efforts.
“Opening a web shop is a big step for Genovis. It is a strategically important decision that is
based on new consumption patterns and behaviors by our customers. Researchers in
laboratories at companies, clinics and institutions the world over will be able to purchase our
products in a simple manner through the web shop,” says Sarah Fredriksson, CEO of
Genovis. “The advantage of a web shop is that it is always open.”
In addition to the direct sales aspect, customers must also be able to test new products and
acquaint themselves with new informational material that the company will be presenting on an
on-going basis.
“Establishing a web shop is a cost-effective way for Genovis to commence sales activities
without needing to build up a large sales and marketing organization in different markets
during an initial period,” continues Sarah Fredriksson. “Subsequently, we will be looking for
international working partners to co-operate in further marketing efforts. What is important
for us is to get the ball rolling and to get our products out to our customers in order to reach
our goal of positive earnings and cash flow in 2008.”
The market for Genovis products is growing by approx. 15-30 percent annually, with the most
significant growth currently taking place in the US and Asia. Genovis views a web shop that is
always open as being a great advantage in its contacts with potential customers in these markets.
“This is a beginning. We have a lot of work remaining before we are ready to fully cultivate
and manage an international market. Our ambition is to be effective and creative in our sales
and marketing work, and, in this way, to develop into a force to be reckoned with,” concludes
Sarah Fredriksson.
Communiqué from Annual General Meeting for Genovis AB (publ) 19 April 2007
The following decisions were adopted at the Annual General Meeting:
• The balance sheet and income statement were ratified.
• The Board and the CEO were granted a release from liability.
• The Board shall consist of five ordinary members up to the next Annual General Meeting. The
Chairman of the Board Hans Göran Arlock and the ordinary members Sarah Fredriksson, Nicklas
Gerhardsson, Viveca Rüter and Bo Håkansson were all re-elected.
• A Nominating Committee shall be created consisting of representatives for the three shareholders
who at the point in time at the end of the third quarter of the year 2007 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 Annual General Meeting approved changes to the Articles of Association. The changes
involved the following:
The scope of the company’s enterprises was expanded to include the ownership and
administration of securities and real estate as well as enterprises compatible with such.
The share capital shall comprise at the lowest three million (3,000,000) SEK and at the highest
twelve million (12,000,000) SEK.
The number of shares shall be at the lowest seven million five hundred thousand (7,500,000) and
at the highest thirty million (30,000,000).
The Board shall consist of at the lowest three (3) and at the highest the (10) members with at the
highest five (5) alternates.
One (1) auditor with or without an alternate or a registered public accounting firm will be
appointed.
Summons to the company’s Annual General Meeting shall take place through announcement in
Dagens Industri and Post- och Inrikes Tidningar.
The Chairman of the Board shall be selected by the Annual General Meeting.
If such should be the case, group annual accounts and the group auditor’s report will be submitted
to and ratified by the Annual General Meeting.
The record day provision was adjusted to meet the new statutory definition of a VPC company.
Lund 20 April 2007
Genovis AB (publ)
The Board
