Watson to quit Genesis' helm

One of the most familiar faces and names in New Zealand's biotechnology industry, Genesis Research & Development Corp CEO Dr Jim Watson, is retiring -- but only as far as the research bench.

Watson used his presentation to the company's 10th AGM last week to signal his imminent retirement from the CEO role, state his faith in the company's future, and to take a pot-shot at the media for suggesting Genesis (ASX:GEN) might not survive.

Watson acknowledged that the NZ biotech industry was at a crossroads. "To be a sustainable industry, investors must believe it is an industry worth investing in," he said. "That does not appear to be the case at the moment. The NZ biotechnology industry, while in its infancy, still has very little to show in the way of products in the market."

Genesis shares have languished since its IPO in 2000. Watson said he never dreamed 10 years ago that he would be explaining to investors today why they should continue to invest in Genesis.

He devoted much of his talk to explaining what was in the company's development pipeline, and describing its income and expenditures.

Watson was irritated by a report in the New Zealand Herald in February this year which said Genesis had cash to survive only two more years. "That assumes we run the company like deliberately driving a car over a cliff," he said.

"Our spend is always a balance between revenues and our bank balance. We have the cash reserves to continue our business in an orderly manner, and our past record in partnering, combined with the response we have had to our portfolio, gives us confidence we will maintain sound financial stability."

The company's most promising pre-clinical therapeutic was a molecule it had discovered and patented itself, called Zyrogen. Watson said the molecule appeared to play a key role in the development of autoimmune diseases like lupus and was also a player in osteoporosis.

Genesis was now in discussion with several pharmaceutical companies interested in the commercial potential of Zyrogen as a therapeutic target for these disorders.

Telling the AGM that he believed in "sound succession planning", Watson said the Genesis board would initiate a search for a new CEO. "At the point a new CEO is in place in the future, I will return to the scientific ranks of the company as founder scientist," he said.

Last week's Genesis AGM also saw the retirement of long-time chairman David Irving. He was replaced by Jim McLean, a Genesis director since 1994 and a prominent member of the NZ biotech community.