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GeneNews Announces Second Quarter Results
Date:8/7/2008

TORONTO, Aug. 7 /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 second quarter and year to date ended June 30, 2008.

"The launch of our first commercial product, ColonSentry(TM), a blood test to assess a patient's current risk of having colorectal cancer, marks the completion of our Company's transition into a fully commercial enterprise. ColonSentry is the world's first blood test for colorectal cancer screening and we believe this unique product will facilitate earlier detection and treatment of the disease, resulting in improved outcomes for patients with colorectal cancer," said Dr. Heiner Dreismann, Lead Director and Interim CEO of GeneNews. "Over the coming quarters, our focus will be on driving adoption of ColonSentry in Canada, subsequent launches of the test in Asia, the United States and Europe, and further development of our pipeline of innovative molecular diagnostic tests for a range of disease indications."

Highlights in the second quarter:

- Subsequent to quarter-end in July, launched the world's first blood

test for colorectal cancer screening in the Greater Toronto Area.

- Presented positive results in a Late Breaking Abstract at the

American Association of Cancer Research (AACR) annual meeting from a

validation study of a panel of six colorectal cancer biomarkers,

confirming (p less than 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).

- Elected two additional independent members to the Board of Directors,

Mr. Harry A. Glorikian and Ms. Fran Tuttle.

Financial results (CDN dollars) for the three-month and six month periods ended June 30, 2008:

Total revenue for the first quarter was $0.3 million (year-to-date - $0.6) compared to $nil (year-to-date - $1.7 million) for the same periods last year. Revenue in the second quarter 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 second quarter were $4.3 million (year-to-date - $7.3 million) compared with $2.7 million (year-to-date - $6.2 million) for the same periods last year. Research and development expenses in the second quarter were $3.0 million (year-to-date - $5.2 million) compared with $1.8 million (year-to-date - $4.4 million) for the same periods last year. General and administrative expenses for the second quarter were $0.8 million (year-to-date - $1.3 million) compared with $0.6 million (year-to-date - $1.3) for the corresponding periods in the previous year.

The net loss for the second quarter was $4.0 million or a loss of $0.07 per common share compared with a net loss of $2.3 million or a loss of $0.04 per common share for the same period last year. Year to date, the net loss was $6.6 (2007 - $4.0) million or a loss of $0.12 (2007 - $0.07) per common share. The net loss is reflective of the Company's continuing focus on research and development and product development which has led on July 21, 2008 to the launch of its first product, ColonSentry(TM), and the advancement of related products in the Company's pipeline.

As at June 30, 2008, the Company's cash and cash equivalents amounted to $6.7 million compared to $11.3 million as at December 31, 2007. The Company believes it has adequate resources to continue through the first quarter of 2009 based on its current cash and cash equivalent position.

As at June 30, 2008 the Company had 55,883,437 common shares and 6,483,738 stock options outstanding.

Management's Discussion and Analysis of the financial statements for the three-month and six-month periods ended June 30, 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

June 30 December 31

2008 2007

$ $

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ASSETS

Current

Cash and cash equivalents 6,688,727 11,279,030

Short-term investment 400,000 400,000

Accounts receivable 720,759 1,582,242

Investment tax credits recoverable 170,477 1,038,199

Prepaid expenses and deposits 455,330 512,914

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Total current assets 8,435,293 14,812,385

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Property, plant and equipment, net 3,507,339 3,635,245

Intellectual property, net 182,010 400,380

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12,124,642 18,848,010

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LIABILITIES AND SHAREHOLDERS' EQUITY

Current

Accounts payable and accrued liabilities 1,682,135 1,699,153

Deferred revenue 1,022,953 1,204,305

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

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

Total current liabilities 3,300,670 3,489,361

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Long-term debt 983,081 1,280,916

Long-term portion of deferred revenue - 401,371

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

Total liabilities 4,283,751 5,171,648

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

Shareholders' equity

Capital stock 44,542,030 44,290,930

Contributed surplus 3,228,101 2,733,562

Deficit (39,929,240) (33,348,130)

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Total shareholders' equity 7,840,891 13,676,362

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12,124,642 18,848,010

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CONSOLIDATED STATEMENTS OF OPERATIONS

AND DEFICIT

(Unaudited)

(Expressed in Canadian dollars)

Three months Three months Six months Six months

ended ended ended ended

June 30 June 30 June 30 June 30

2008 2007 2008 2007

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

Revenue

Milestones $ 288,438 $ - $ 582,724 $ 1,666,236

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

288,438 - 582,724 1,666,236

Expenses

Research and

development 3,044,225 1,772,371 5,229,981 4,361,474

General and

administrative 806,675 643,191 1,319,236 1,315,266

Stock

compensation 352,264 131,747 494,538 278,186

Amortization of

intellectual

property 110,537 110,537 221,074 221,074

Interest on long

term debt 28,172 1,538 58,700 4,191

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4,341,872 2,659,384 7,323,528 6,180,191

Interest income 58,634 357,865 159,694 541,186

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

Net and

comprehensive

loss for the

period $ (3,994,800) $ (2,301,519) $ (6,581,110) $ (3,972,769)

Deficit, beginning

of period (35,934,440) (25,385,336) (33,348,130) (23,714,086)

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

Deficit, end

of period $(39,929,240) $(27,686,855) $(39,929,240) $(27,686,855)

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

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

Net and

comprehensive

loss per common

share

Basic and fully

diluted $ (0.07) $ (0.04) $ (0.12) $ (0.07)

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

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

Weighted average

number of common

shares outstanding

Basic and fully

diluted 55,623,367 55,441,019 55,571,069 55,441,019

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Expressed in Canadian dollars)

Three months Three months Six months Six months

ended ended ended ended

June June June June

2008 2007 2008 2007

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

Cash flows provided

by (used in):

Operations:

Net and

comprehensive

loss for

the period $ (3,994,800) $ (2,301,519) $ (6,581,110) $ (3,972,769)

Items therein

not requiring

cash

Stock based

compensation 352,264 131,747 494,538 278,186

Amortization

of capital

assets 213,183 89,917 358,365 174,862

Amortization of

intellectual

property 110,537 110,537 221,074 221,074

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(3,318,816) (1,969,318) (5,507,133) (3,298,647)

Changes in

non-cash working

capital:

Accounts

receivable 397,391 (245,835) 861,483 (311,706)

Investment

tax credit

recoverable 403,141 - 867,722 -

Prepaid expenses

and deposits 103,452 166,687 57,583 241,671

Accounts payable

and accrued

liabilities 220,553 122,972 (17,018) 120,718

Deferred revenue (288,437) 531,700 (582,723) 531,700

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

(2,482,716) (1,393,794) (4,320,086) (2,716,265)

Financing:

Net proceeds from

issue of

capital stock

Proceeds from

exercise of

employee stock

options 220,350 251,100 25,459

Net proceeds from

exercise of 2004

broker warrants -

Payments on long

term debt (145,256) (38,258) (288,156) (75,401)

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

75,094 (38,258) (37,056) (49,942)

Investments:

Additions to

capital assets (20,057) (1,168,630) (233,161) (1,277,031)

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

Increase (decrease)

in cash and cash

equivalents (2,427,679) (2,600,682) (4,590,303) (4,043,238)

Cash and cash

equivalents,

beginning of period 9,116,406 19,151,012 11,279,030 20,593,568

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

Cash and cash

equivalents, end

of period $ 6,688,727 $ 16,550,330 $ 6,688,727 $ 16,550,330

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

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Supplemental cash

flow information:

Interest received 27,999 137,213 123,957 232,700

Interest paid 28,172 1,538 58,700 4,191


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

Related biology technology :

1. GeneNews CSO Dr. CC Liew awarded state honour by the Government of Malaysia
2. GeneNews Chief Scientist Dr. C.C. Liew co-editor of new genomics reference book
3. GeneNews initiates patient sample accrual for validation studies of colon cancer blood test
4. GeneNews receives ISO 13485 accreditation
5. GeneNews selected to present late-breaking abstract at AACR Annual Meeting
6. GeneNews announces 2007 year end results
7. GeneNews reports positive results from validation study of colorectal cancer biomarkers in late-breaking abstract at AACR
8. GeneNews Announces First Quarter Results
9. Genenews adds two members to its Board of Directors
10. GeneNews announces management changes to support commercialization of ColonSentry(TM)
11. GeneNews launches worlds first blood test for colorectal cancer screening
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