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Biotechnology firm, Genesis Research & Development, looks for more after raising investment to stay in NZ


Genesis Research and Development Corp., an Auckland based biotechnology company reported it had found a viable New Zealand investor and may rethink its decision to move its operations overseas. The company’s CEO, Stephen Halls, said Tuesday that the company expects to conclude the placement of 7.4 million shares at 6c per share, to raise $446, 278 in the coming two weeks.

 

This announcement comes after last month’s decision by the company to suspend its operations in New Zealand, resulting in the loss of nine jobs after funding dried up in what the company considered a high risk sector that was then experiencing the decline of the global financial meltdown. However, the company was not considering delisting from either the New Zealand or the Australian stock exchanges, with most of its 2000 shareholders being New Zealand small retail investors.

 

The change in plans does not mean the company abandons altogether its offshore operations as it still has the option of using an overseas lab for some of its work. Mr. Halls added that the company’s previous position was to cease operations in the country but with the new placement and opportunities, the company may resume its New Zealand operations. The company however did not disclose the new investor, saying the investor’s identity was confidential.

 

Currently, Genesis is in discussion with the new investor over the possible future focus of research and development efforts and the financing required. After the discussions are finished, the company will present a proposal to its shareholders for approval of any direction the company will take and the issuance of shares to the new investors as well.

 

Genesis Research and Development further confirmed that it was still looking for new investors in its Solirna Biosciences to enable it further develop its genetic technology. Even so, the company’s other assets will be retained till value is realized for shareholders, he said. According to him, the company was pondering whether to center its investments on shorter term prospects with lower risks, instead of the long term, high risk, expensive research it currently undertakes.

 

The company has traditionally centered on human health, but with a lot of research in agricultural biotechnology, and some of its research is still being considered to be an economic interest.  Shares of Genesis, which was founded in 1994, last traded at 3.1 cents on May 18 and have slumped 74% in the past 12 months. It was turned down for additional funding from the Foundation for Research, Science and Technology.

 

June 16, 2010.

 

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