Genovis Quarterly Report – Q2 January 1 – June 30, 2007

• After tax results for the second quarter amounted to KSEK –1,717 (KSEK –1,003) and for the year KSEK –3,339 (KSEK – 2,079)
• Reference project involving gene transfer, siRNA delivery and magnetic labeling of cells concluded with positive results
• A new business area and new products related to antibody fragmentation as a result of the acquisition of intellectual property rights

Remarks from the CEO
Getting underway with sales and beginning to generate revenues is one of the most important milestones in the development of Genovis. When the Genovis Web Shop opens on September 27, we will be ready to begin selling some 20 products based upon the NIMT® technology.

During the first half of the year, Genovis has been investing in production processes, infrastructure and IT-based support functions in order to be able to handle global support, logistics and sales in as optimum a manner as possible. The task with the highest priority we now face is to establish sales and marketing channels in the US, Europe and Asia, either via partners or under our own auspices. A global web shop requires global marketing.
Genovis ambition is to start marketing activities targeted at customers within niche markets for our products in both the US and Asia before the end of the year.

Sarah Fredriksson
CEO Genovis AB

Operations
Genovis has developed a patented technology, called NIMT™ (NanoInducedMagneticTransfer) technology, which is intended to be used as a research tool in preclinical research as well as in the development of pharmaceuticals. The products that are derived from the concept include a line of different nanoparticles, NIMT™ FeOdots, and a laboratory instrument, NIMT™ NanoHeater, which is used to control the properties of the nanoparticles. All products are intended for laboratory use and for multiple applications: gene transfer, RNA interference, magnetic labeling and sorting of cells as well as magnetic separation of biomolecules.

Since the fourth quarter of 2006, Genovis has carried out a number of reference projects. Genovis NIMT™ technology has been tested in the research enterprises of eight different groups in applications that include gene transfer, magnetic labeling and siRNA delivery. The groups included two Swedish biotechnology companies, Lund University, Karolinska Institutet, Uppsala University, NIH (the National Institutes of Health, in the US) and SCRIPPS (the Scripps Research Institute, also in the US).

The objectives Genovis had in carrying out this reference project included performing quality assurance on the technology by testing its technical performance on difficult tasks and cells that are difficult to work with, based on the customer’s definition. The project has also contributed to giving Genovis feedback regarding its production, logistics and packaging solutions. On the overall, the project has equipped Genovis with additional expertise in issues concerning customer support and customized solutions in different prioritized customer segments.

On May 3, 2007, Genovis entered into an agreement with Hansa Medical AB on the acquisition of a patent and license for biotechnical industrial applications for a group of bacterial surface proteins. Genovis will be marketing the rights together with the company’s NIMT™ FeOdots nanoparticles in completely new laboratory products intended for preclinical research. The proteins that are included in the agreement will first and foremost be used as components in products intended for antibody-based research and production of antibody fragment.
Genovis has combined its technology platform with two of the bacterial surface proteins that the company acquired from Hansa Medical AB and created a unique tool for fragmentation of antibodies. Antibody fragmentation is a technology for which there is increasing demand and which is used in, among other things, analyses of cell cultures , coloring of tissue samples and in order to avoid activating the defenses of the immune system in the development of new antibody-based drugs. The new product line will begin to be sold when the company opens its web shop in September.

Organization
During the second quarter the number of employees has increased by one full-time position and one part-time position. At the end of the period Genovis had 10 (5) employees.

Income and quarterly profit or loss
Revenues for the period of KSEK 131 (KSEK 56) are comprised of instrument rental KSEK 5 and KSEK 126 in the form of labor market contributions and grants. The results for the period comprised KSEK – 3,339 KSEK (KSEK – 2,079).

Investments
During the period, investments in non-tangible assets (continued development of patents and prototypes as well as acquisition of intellectual property rights) were made of KSEK 3,969 (KSEK 1,542). Investments in tangible assets involving, among other things, laboratory and computing equipment were made totaling KSEK 642 (KSEK 205).
Financial position and liquidity
Cash flow from on-going operations before changes in funds tied up in operations was KSEK –4,405. Cash flow from financial enterprises was KSEK -65. Liquid assets as at June 31, 2007, comprised KSEK 7,060 (KSEK).

Genovis class B shares
Genovis class B shares are listed on First North, which is a part of the OMX Nordic Exchange.