YEAR-END REPORT JANUARY-DECEMBER 2012

Fourth quarter 2012

(compared with the same period 2011)

  • Net sales increased by 88% to SEK 2,017k (1,071k).
  • Operating loss before depreciation, amortization and impairment was SEK 4,335k (loss: 3,333k).
  • Loss after financial items was SEK 8,465k (loss: 3,956k)*.
  • Comprehensive income for the period was a loss of SEK 8,331k (loss: 3,835k)*.
  • Comprehensive income per share basic and diluted totaled SEK -0.70 (-0.60).
  • Cash flow from operating activities during the period was SEK -3,889k (-2,503k).
  • Cash and cash equivalents at the end of the period totaled SEK 6,684k (7,563k).

Full-year 2012

(compared with full-year 2011)

  • Net sales increased by 113% to SEK 6,080k (2,856k).
  • Operating loss before depreciation, amortization and impairment was SEK -14,975k  (- 12,435k).
  • Loss after financial items was SEK 20,161k (loss: 13,758k)*.
  • Comprehensive income was a loss of SEK 19,915k (loss: 13,608k)*.
  • Comprehensive income per share basic and diluted totaled SEK -2.88 (2.37).
  • Cash flow from operating activities during the period was SEK -14,848k (-12,150k).

*The impairment charges for the technology platform and patents have a negative impact of SEK 3,790k.

Events after the end of the period

Genovis’ Board of Directors has decided that the nano portfolio, which focuses primarily on new contrast agents intended for both the preclinical and clinical markets, will be placed in the wholly owned subsidiary GeccoDots AB (formerly Eijdo research AB). Genovis will provide the subsidiary with about SEK 6 million in 2013. Operations will focus on product development of products for imaging of lymph nodes in malignant diseases, as well as for stem cell tracking.

With the authorization of the 2012 Annual General Meeting, the Board of Directors of Genovis has decided to conduct a rights issue to existing shareholders in which three (3) existing shares entitle the holder to subscription for one (1) new share at a subscription price of SEK 3.50/ share. As a result of this decision share capital could increase by a maximum of SEK 1,578,075.60 through the issuance of up to 3,945,189 shares. Following the completed rights issue, share capital will amount to a maximum of SEK 6,312,302.80 and the number of shares to 15,780,757.The company will raise about SEK 13.8 million before issue expenses, which are expected to be SEK 600,000. The issue will have a dilutive effect of 25% on the holdings of those who do not subscribe for their full stake.

Record date, March 28, 2013

Subscription period, April 4 – April 17, 2013

Principal owners Mikael Lönn and LMK Ventures AB have provided written subscription undertakings and will subscribe for their respective shares of the issue. In addition, Mikael Lönn and LMK Ventures AB have provided a guarantee along with subscription commitments guaranteeing 70% of the total issue volume. Guarantee fees of 5% will be charged on the amount exceeding the sum of the underwriters’ subscription undertakings. The guarantee fee is SEK 256,141 to be divided equally among the underwriters. 

CEO COMMENTS

During the fourth quarter, sales of products from our protein engineering portfolio increased by 88% compared with the same period in 2011--our strongest quarter ever. Looking at performance for the for twelve-month period of 2012 sales increased by 112%. FabRICATOR® continues to be our best-selling product, while our more processed products have increased the most in relative terms. The increase in sales is driven by a higher order value from established customers and a continued increase in the number of customers.

We also made ​​some investments and hired more staff in 2012. Overall, our costs rose 38% during the year excluding impairments of patents and the technology related to the Nano portfolio of SEK 3,790k. We launched the campaign for a stronger team in sales and production in late 2011 and now I believe we have shaped an organization that will be able to take advantage of all of the opportunities that await in 2013.

We participated at two international conferences during the fourth quarter and worked with direct customer meetings. During the year as a whole we attended ten conferences, including seven at which we introduced new customers to the products from the protein engineering portfolio. We still have much work to do to reach out to our entire customer base. Our more experienced team enables us to take a more customer-focused approach and as a result our key customers are helping us to a greater extent in our marketing efforts by acting as ambassadors for the products.

Although we are prioritizing sales and delivery capacity for our existing products, during the fourth quarter we also worked intensively with the development of two new enzyme products. The first one, which we call FabULOUS, is an enzyme that supplements FabRICATOR and we are just starting to introduce it to our key customers in Europe and the United States. We will hold a broader launch later this spring, and later this year we are planning to add yet another new product.

In 2012, we worked with our nanostructures to strengthen the portfolio in terms of technology and patents, partly through collaborations with Lund University researchers. One of our most important tasks this year has been to meet potential customers, competitors and partners and in various ways we have analyzed the information, gained experience and identified needs for new technology and business models. As a result we will focus exclusively on new contrast agents that are based on our multimodal nanostructures. Although the preclinical market is a first step, the platform also has potential in the clinical market.

During the year we phased out operations in the subsidiary that consisted of providing medical imaging services. The restructuring of the operation in 2012 has resulted in an impairment of the holdings in the subsidiary since the business is no longer conducted in the way that was intended at the time of acquisition of Eijdo research AB in 2009, which affects the result of both the parent company and the Group.

We are already moving full speed ahead in 2013 and our two product portfolios will take the next step into each market. For the nano portfolio the main objective is to transition from testing and introduction of the technology into sales. Our unique enzymes have made progress and we now have our sights set on a positive cash flow for the protein portfolio at the end of the year.

Lund February

Sarah Fredriksson

CEO 

For more information, please contact:

Sarah Fredriksson, CEO  Tel: 4646 -101235 sarah.fredriksson@genovis.com

Susanne Ahlberg, IR Tel: 4646-10 12 38

ABOUT GENOVIS

Genovis develops and sells innovative technologies from two unique product portfolios. The first includes enzymes that facilitate development and quality control for applications such as antibody-based drugs. The products launched to date are aimed at customers who work with development of drugs, new diagnostic methods and basic research.

The second consists of nanotechnology in new contrast agents and focuses on design, production and characterization of nanostructures as contrast agents in medical imaging. The nanostructures and methods that Genovis focuses on can also be used as carriers of various substances in the development of new drug delivery methods. The projects are mainly in-house, but also include collaborations with research groups, including at Lund University.

Genovis shares are listed on the First North OMX Nordic Exchange and Thenberg Fondkommission is our certified advisor.

About Us

Genovis’ business concept is to develop, produce and market innovative technologies that facilitate and enable development of new treatment methods and diagnostics for customers in the medical device and pharmaceutical industries. The Group consists of Genovis AB and the subsidiary GeccoDots AB. Genovis develops and sells unique enzymes (protein engineering portfolio) in innovative product formats that facilitate development and quality control of and biological drugs. GeccoDots uses nanotechnology to produce a new type of contrast agent that is used in medical imaging. Genovis shares are listed on NASDAQ OMX First North

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