Biotech Values

[DewDiligence]

GNLB Reports 1Q07 Results

[GNLB is a company that NVS takes more seriously than most investors do. The enterprise value (fully-diluted market cap adjusted for net cash on hand) is only about $40M. I do not follow the company closely but perhaps I ought to.]

http://biz.yahoo.com/prnews/070514/sfm084.html?.v=87

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Monday May 14, 5:00 pm ET

REDWOOD CITY, Calif., May 14 /PRNewswire-FirstCall/ -- Genelabs Technologies, Inc. (Nasdaq: GNLB ) today reported revenues of $3.6 million and a net loss of $0.5 million, or $0.02 per share, for the first quarter of 2007. This compares to revenues of $1.7 million and a net loss of $3.4 million, or $0.19 per share, for the first quarter of 2006.

At March 31, 2007, Genelabs had $26.5 million in cash and cash equivalents. At December 31, 2006, Genelabs reported cash and cash equivalents of $18.6 million.

The increase in revenue during the first quarter of 2007 versus 2006 resulted principally from our non-nucleoside collaboration with Novartis Institutes for BioMedical Research, Inc. targeted at hepatitis C virus, or HCV, which commenced in June 2006. Revenue from this collaboration includes on-going research funding as well as a portion of the $12.5 million up-front license fee received from Novartis in 2006, which is being recognized on a straight line basis over the three-year term of our potential obligations under the collaboration. In addition, during 2006, we continued to recognize revenue from our HCV research collaboration with Gilead Sciences, Inc., and from our collaborations for the development and commercialization of Prestara(TM) with Watson Pharmaceuticals and Tanabe Seiyaku Co., Ltd.

Genelab's cash position improved during the first quarter of 2007 principally as a result of a $10 million equity financing completed in February 2007 and from the sale of equity Genelabs held in a Taiwan-based specialty pharmaceutical company known as Genovate Biotechnology, Co., Ltd. for gross proceeds of $2.2 million.

"The first quarter of 2007 was highlighted by finalizing agreement with the FDA on a special protocol assessment for a new phase III clinical trial of Prestara in women with systemic lupus," said James A. D. Smith, Genelabs president and chief executive officer. "The SPA agreement provides us with an extraordinarily clear regulatory and clinical development path forward, given that the FDA has advised us that a positive outcome to the trial, along with existing evidence of efficacy from prior trials with Prestara and an overall positive risk/benefit ratio, would in principal meet FDA's standards for approval of the Prestara NDA. So approval of the Prestara NDA could potentially be one positive phase III trial away.

Separate from Prestara, our HCV drug discovery projects continue to make good progress, including the nucleoside collaboration with Gilead Sciences and the non-nucleoside polymerase inhibitor collaboration with Novartis as well as our own unpartnered programs. For nucleosides, over the past few months we have had five new composition of matter patents issued, substantially increasing the scope of our intellectual property in the field. Within the unpartnered programs, we have been evaluating several feasibility projects that address different mechanisms for inhibiting HCV and our research team is on track to generate the necessary data by mid-year that will enable us to determine whether additional resources should be devoted to them. Finally, during the first quarter we significantly improved our balance sheet through a private placement of stock and the sale of our remaining equity investment in Genovate Biotechnology Co., Ltd, finishing the quarter with $26.5 million in cash while continuing to carefully manage our spending level. Our current cash is sufficient to fund existing operations into 2009."

About Genelabs Technologies

Genelabs Technologies, Inc. is a biopharmaceutical company focused on the discovery and development of pharmaceutical products to improve human health. We have built drug discovery capabilities that can support various research and development projects. Genelabs is currently concentrating these capabilities on discovering novel compounds that selectively inhibit replication of the hepatitis C virus and advancing preclinical development of compounds from this hepatitis C virus drug discovery program, while also developing a late-stage product for lupus. We believe that these high-risk, potentially high reward programs focus our research and development expertise in areas where we have the opportunity to generate either first-in-class or best-in-class products that will address diseases for which current therapies are inadequate. For more information, please visit www.genelabs.com.
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