GeneNews Limited
TSX : GEN

GeneNews Limited

March 25, 2011 21:20 ET

GeneNews Reports Fourth Quarter and 2010 Annual Results

TORONTO, ONTARIO--(Marketwire - March 25, 2011) - GeneNews Limited (TSX:GEN), an emerging molecular diagnostics company focused on the application of functional genomics to enable early diagnosis and personalized health management, today reported operational and financial results for the year ended December 31, 2010.

Sentinel Principle® and ColonSentry™ Highlights for 2010:

  • Reported the submission of ColonSentry™ validation data package to New York State health regulatory authorities by Enzo Clinical Labs (NYSE:ENZ).
  • Received approval of approximately $1,665,000 (MYR 5,000,000) grant from the Government of Malaysia to support the identification and development of blood-based biomarkers for liver cancer and hepatitis B, of which approximately $1,000,000 was received in 2010.
  • Presented positive ColonSentry™ validation data from a 786-cohort study entitled "Blood RNA Biomarker Detects Both Left- and Right-sided Colorectal Neoplasms" at the at the Next Generation Dx Summit, Washington, DC August 24-26.
  • Reported a seed capital grant of approximately $600,000 (MYR 1,876,000) from the Malaysia Biotech Corp. to the company's commercialization partner, GeneNews Diagnostics, to support ColonSentry™ commercialization in Malaysia and southeast Asia.
  • Executed a formal marketing partnership agreement with GeneDiagnostics Inc. to market and sell ColonSentry™, the world's first blood-based test to determine a person's current risk for colorectal cancer, in Shanghai and the provinces of Zhejiang and Jiangsu where a combined population of more than 38 million men and women aged 50 or older reside.
  • Presented an abstract further confirming and validating the Company's ColonSentry™ test panel in an independent Malaysian patient population.
  • Granted U.S. patents for schizophrenia and osteoarthritis based on the Company's core platform technology, the Sentinel Principle®, further expanding its scope of protection to include all aspects of personalized health management from early detection to determining response to treatment, and to protect the use of biomarkers derived from the application of the Sentinel Principle® to specific clinical applications.
  • Granted a second U.S. patent covering the application of the Company's core platform technology, the Sentinel Principle®, in any health management context, including diagnosis, staging of disease, drug testing, monitoring response to treatment and biomarker screening.
  • Published positive validation data in the International Journal of Cancer for a novel blood-based, seven-gene biomarker panel for colorectal cancer that can stratify average risk patients according to their current relative risk of actually having colorectal cancer, the basis of the Company's lead product ColonSentry™.

Corporate Highlights for 2010:

  • Completed two concurrent private placement offerings for total gross proceeds of approximately $2.1 million.
  • Sub-leased approximately two-thirds of its leased premises to a third party to further manage operational expenditures.
  • Completed its surveillance and upgrade audit for ISO 9001:2008
  • Management and Board changes including the appointment of Ms. Gailina J. Liew as President and Chief Operating Officer, the appointment of Ms. Leslie Auld as Chief Financial Officer, the election of Ms. Gailina J. Liew to the Company's Board of Directors and the re-election of six incumbent directors at the Company's annual shareholder meeting.

"Our progress in 2010 reflected our continued development as a commercial organization," said Ms. Liew. "We secured additional ColonSentry marketing partners and were granted important patents to protect our Sentinel Principle platform technology and its application to address a broad range of clinical applications."

"Our marketing partners are expected to launch ColonSentry in the United States, China and Malaysia in 2011", added Dr. Dreismann, Lead Director and interim CEO. "Our efforts will remain focused on further broadening the global commercial footprint of ColonSentry™ and to engage with potential strategic partners to establish our technology platform as an industry standard."

Financial results for the fourth quarter and year-ended December 31, 2010:

For the three months ended December 31, 2010, the Company reported a consolidated net loss of $1,034,533, or $0.01 loss per common share, as compared to a consolidated net loss of $463,654, or $0.00 loss per common share for the three months ended December 31, 2009. For the year ended December 31, 2010, the Company reported a consolidated net loss of $4,815,390 or $0.07 loss per common share, as compared to a consolidated net loss of $5,593,869 or $0.09 loss per common share for the year ended December 31, 2009. This decrease in loss of $778,479 occurred from a decline in revenue of $952,333 offset by declines of $936,669 in research and development costs, $487,322 in stock-based compensation and $288,043 in sales and marketing.

As at December 31, 2010, the Company's unrestricted cash and cash equivalents, cash held in trust and short-term investments amounted to $1,966,938 as compared with $2,888,716 as at December 31, 2009. Management believes that the Company's current level of cash and cash equivalents and short-term investments provides sufficient funding to conduct operations into the third quarter of 2011. The Company's ability to continue operations thereafter is dependent upon its ability to secure additional operating capital from the execution of strategic partnering agreements and/or financing opportunities. Potential sources of capital include payments from potential strategic partners, equity and debt financings as well as other financing opportunities. The amount and availability of these potential sources of capital will be affected by the current economic conditions and state of the capital markets generally. There is no assurance that the Company will be successful at obtaining additional financing on acceptable terms and at reasonable cost, if at all.

The Company had 73,748,063 common shares, 10,202,971 stock options and 21,511,178 warrants outstanding as at December 31, 2010.

The Company's annual financial statements and management's discussion and analysis are available on www.sedar.com.

Notice of Annual General Meeting:

GeneNews will hold its Annual Shareholder Meeting at 4:30pm on May 16, 2011 at Fasken Martineau DuMoulin LLP at 333 Bay Street, Suite 2400, Bay Adelaide Centre, Toronto, ON.

About GeneNews

GeneNews is an emerging molecular diagnostics company focused on the application of functional genomics to enable early diagnosis and personalized health management based on disease-specific biomarkers. The Company has a patented core platform technology, the Sentinel Principle®, which has the power to detect and stage virtually any disease or medical condition from a simple blood sample. GeneNews is currently applying the Sentinel Principle® in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews launched its first commercial product, ColonSentry™, a blood-based test to pre-screen and assess an individual's risk for colorectal cancer, in Canada in 2008. The company's marketing partners, GeneDiagnostics, Enzo Clinical Labs and GeneNews Diagnostics, are expected to launch the ColonSentry™ test in China, the United States and Malaysia in 2011. For more information on GeneNews and ColonSentry™, www.genenews.com or www.ColonSentry.com.

Forward-Looking Statements

This press release contains forward-looking statements, which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements.

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