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GeneNews Announces First Quarter Results
Date:5/2/2008

TORONTO, May 2 /PRNewswire-FirstCall/ - GeneNews Limited (TSX: GEN), a company focused on developing blood-based biomarker tests for the early detection of diseases and personalized health management, today reported operational and financial results for the first quarter ended March 31, 2008.

"During the quarter, we achieved several of the key milestones necessary to support the commercialization of our first product, ColonSentry(TM), a risk stratification test for colorectal cancer," said Dr. K. Wayne Marshall, President and CEO of GeneNews. "We remain on track to launch the laboratory-developed test (LDT) version of ColonSentry(TM) in the third quarter of 2008. The test will be administered as a service by our in-house clinical reference lab located at our headquarters just north of Toronto, Canada. This novel test will initially target the estimated 1.5 million people over the age of 50 in the Greater Toronto Area who should be screened for colorectal cancer, the vast majority of whom do not currently comply with screening guidelines."

Highlights in the first quarter:

- Reported positive results from a validation study of a panel of

six colorectal cancer biomarkers, confirming (p<0.05) that

the panel was able to stratify a population with average risk for

colorectal cancer into three defined risk groups (Increased, Average,

and Decreased Probability). The results were presented in a Late

Breaking Abstract at the annual meeting of the American Association

of Cancer Research (AACR), held in San Diego, California.

- Obtained ISO 13485:2003 certification for the design and development

of in-vitro diagnostic (IVD) test kits for the management of

colorectal disease status in a laboratory setting, following a

successful audit in December 2007.

- Expanded its Colorectal Cancer Clinical Advisory Board with the

appointment of leading cancer screening experts, Dr. David A.

Lieberman, Dr. David Sidransky and Dr. Richard Wender. They join Dr.

Bernard Levin who is Chair of the CRC Clinical Advisory Board.

- Published a paper entitled "Novel Blood-Based, Five-Gene Biomarker

Set for the Detection of Colorectal Cancer" in the January 15, 2008

issue of Clinical Cancer Research journal which further validates

GeneNews' proprietary approach to detecting colon cancer by

monitoring the gene expression patterns of unique biomarker sets in

blood.

Financial results (CDN dollars) for the first quarter, ended March 31, 2008:

Total revenue for the first quarter was $0.3 million compared to $1.7 million for the same period last year. Revenue in the first quarter of 2008 resulted from a collaboration agreement entered into with an Asian biomedical consortium to identify and validate a set of biomarkers in the field of prostate diseases, for a total fee of $2 million (USD), while revenue in 2007 resulted from a collaboration agreement with Pfizer completed in the first fiscal quarter of 2007.

Total operating expenditures for the first quarter were $2.9 million compared with $3.5 million for the same period last year. Research and development expenses for the first quarter were $2.2 million compared with $2.7 million for the same period last year. General and administrative expenses for the first quarter were $0.5 million compared with $0.6 million for the corresponding quarter in the previous year.

The net loss for the first quarter was $2.6 million or a loss of $0.05 per common share compared with a net loss of $1.7 million or a loss of $0.03 per common share for the same period last year. The net loss is reflective of the Company's continuing focus on research and development and product development leading to commercialization of its first product, ColonSentry(TM), and the advancement of related products in the Company's pipeline.

As at March 31, 2008, the Company's cash and cash equivalents amounted to $9,116,406 compared to $11,279,030 as at December 31, 2007. The Company believes it has adequate resources to continue into the second quarter of 2009 based on its current cash and cash equivalent position.

As at March 31, 2008 the Company had 55,587,103 common shares, 5,761,146 stock options and 625,000 broker warrants outstanding.

Management's Discussion and Analysis of the financial statements for the three-month period ended March 31, 2008 is available on SEDAR at http://www.sedar.com.

About GeneNews

--------------

GeneNews is focused on the application of functional genomics to enable early diagnosis and personalized therapeutic intervention based on disease-specific biomarkers. The Company has developed a novel approach, the Sentinel Principle(TM), to detect and stage virtually any disease or medical condition from a simple blood sample. GeneNews is currently applying the Sentinel Principle(TM) in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews' first product in development, ColonSentry(TM), is a convenient and patient-friendly blood-based test that can assess an individual's current risk for colorectal cancer. For more information on GeneNews, visit http://www.genenews.com.

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.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Expressed in Canadian dollars)

As at

March 31 December 31

2008 2007

$ $

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ASSETS

Current

Cash and cash equivalents 9,116,406 11,279,030

Short-term investment 400,000 400,000

Accounts receivable 1,118,151 1,582,242

Investment tax credits recoverable 573,618 1,038,199

Prepaid expenses and deposits 558,783 512,914

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Total current assets 11,766,958 14,812,385

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Property, plant and equipment, net 3,700,464 3,635,245

Intellectual property, net 292,547 400,380

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15,759,968 18,848,010

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LIABILITIES AND SHAREHOLDERS' EQUITY

Current

Accounts payable and accrued liabilities 1,461,582 1,699,153

Deferred revenue 1,210,514 1,204,305

Current portion of long-term debt 595,582 585,903

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Total current liabilities 3,267,679 3,489,361

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Long-term debt 1,128,337 1,280,916

Long-term portion of deferred revenue 100,876 401,371

-------------------------------------------------------------------------

Total liabilities 4,496,892 5,171,648

-------------------------------------------------------------------------

Shareholders' equity

Capital stock 44,321,680 44,290,930

Contributed surplus 2,875,837 2,733,562

Deficit (35,934,440) (33,348,130)

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Total shareholders' equity 11,263,077 13,676,362

-------------------------------------------------------------------------

15,759,968 18,848,010

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CONSOLIDATED STATEMENTS OF OPERATIONS

AND DEFICIT

(Unaudited)

(Expressed in Canadian dollars)

Three month period ended March 31

2008 2007

$ $

-------------------------------------------------------------------------

REVENUE

Milestone revenue 294,286 1,666,236

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EXPENSES

Research and development 2,185,756 2,667,360

General and administrative 512,560 593,819

Stock-based compensation 142,274 146,439

Amortization of intellectual property 110,537 110,537

Interest on long-term debt 30,528 2,653

-------------------------------------------------------------------------

2,981,655 3,520,808

-------------------------------------------------------------------------

Interest income 101,060 183,321

-------------------------------------------------------------------------

Net and comprehensive loss for the period (2,586,310) (1,671,251)

Deficit, beginning of period (33,348,130) (23,714,085)

-------------------------------------------------------------------------

Deficit, end of period (35,934,440) (25,385,336)

-------------------------------------------------------------------------

-------------------------------------------------------------------------

Net and comprehensive loss per common share

Basic and fully diluted $(0.05) $(0.03)

-------------------------------------------------------------------------

-------------------------------------------------------------------------

Weighted average number of common

shares outstanding

Basic and fully diluted 55,518,769 55,431,359

-------------------------------------------------------------------------

-------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Expressed in Canadian dollars)

Three month period ended March 31

2008 2007

$ $

-------------------------------------------------------------------------

OPERATING ACTIVITIES

Net and comprehensive loss for the period (2,586,310) (1,671,251)

Add items not involving cash

Stock-based compensation 142,274 146,439

Amortization of property, plant and equipment 145,182 84,945

Amortization of intellectual property 110,537 110,537

-------------------------------------------------------------------------

(2,188,316) (1,329,330)

Changes in non-cash operating working capital

Accounts receivable 464,274 (65,871)

Investment tax credits recoverable 464,581 -

Prepaid expenses and deposits (45,869) 74,984

Accounts payable and accrued liabilities (237,571) (2,254)

Deferred revenue (294,286) -

-------------------------------------------------------------------------

Cash used in operating activities (1,837,370) (1,322,471)

-------------------------------------------------------------------------

FINANCING ACTIVITIES

Proceeds from exercise of employee stock options 30,750 25,459

Repayments of long-term debt (142,900) (37,143)

-------------------------------------------------------------------------

Cash provided by (used in) financing activities (112,150) (11,684)

-------------------------------------------------------------------------

INVESTING ACTIVITIES

Additions to property, plant and equipment (213,104) (108,401)

-------------------------------------------------------------------------

Cash used in investing activities (213,104) (108,401)

-------------------------------------------------------------------------

Net increase (decrease) in cash and cash

equivalents during the period (2,162,624) (1,442,556)

Cash and cash equivalents, beginning of period 11,279,030 20,593,568

-------------------------------------------------------------------------

Cash and cash equivalents, end of period 9,116,406 19,151,012

-------------------------------------------------------------------------

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Supplemental cash flow information:

Interest received 95,958 163,353

Interest paid 30,528 35,490

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SOURCE GeneNews Limited
Copyright©2008 PR Newswire.
All rights reserved

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