GNLB Genelabs Technologies (MM)

Genelabs Technologies, Inc. (Nasdaq:GNLB), a biopharmaceutical company focused on the discovery and development of novel compounds for infectious diseases, reported financial results for the third quarter and nine months ended September 30, 2008. Genelabs reported revenues of $0.3 million and a net loss of $4.9 million, or $0.11 per share, for the third quarter of 2008. This compares to revenues of $4.6 million and a net loss of $0.1 million, or $0.00 per share, for the third quarter of 2007. Revenues for the first nine months of 2008 were $7.4 million, and the net loss was $9.9 million, or $0.23 per share, compared to revenues of $12.9 million and a net loss of $1.0 million, or $0.03 per share, for the first nine months of 2007. Genelabs had $24.1 million in cash and cash equivalents at September 30, 2008 as compared to $37.6 million at December 31, 2007 and $31.8 million at March 31, 2008. Genelabs� revenue decreased in the third quarter and first nine months of 2008 compared to the same periods in 2007 as a result of lower overall contract revenue recorded under our HCV collaborations after we completed our research obligations under the agreements. Operating expenses increased in the 2008 periods primarily due to higher personnel, legal, financial advisory and depreciation expenses. Additionally, during the first quarter of 2007, a gain of $1.2 million was recorded on the disposition of our investment in Genovate Biotechnology Co., Ltd. with no similar transaction occurring in 2008. About Genelabs Technologies Genelabs Technologies, Inc. is a biopharmaceutical company engaged in the discovery and development of pharmaceutical products to improve human health. Our primary business objective is to translate research into novel therapeutics for disease areas with significant unmet medical needs. Currently, our product pipeline consists of infectious disease projects focused on HCV infection as well as a late-stage clinical asset for HEV that is being developed by GlaxoSmithKline. For more information, please visit www.genelabs.com. NOTE ON FORWARD LOOKING STATEMENTS AND RISKS: This press release contains forward-looking statements regarding Genelabs� business strategy and our ability to successfully advance our infectious disease pipeline. These statements are based on Genelabs� current expectations and are subject to uncertainties and risks that could cause actual results to differ materially. Uncertainties and risks include, without limitation, failures or setbacks in our HCV research programs or in our collaboration with GlaxoSmithKline. Please also refer to the Company�s periodic reports filed with the Securities and Exchange Commission. Genelabs does not undertake any obligation to update or revise forward-looking statements in this press release. GENELABS TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) � September 30, December 31, 2008 2007 (Unaudited) (Note 1) Assets � Cash and cash equivalents $ 24,091 $ 37,575 Other current assets 231 2,353 Property and equipment, net 3,278 2,854 Long-term deposit � 112 � 112 $ 27,712 $ 42,894 � Liabilities and Shareholders� Equity � Liabilities, including unearned contract revenue $ 3,583 $ 10,190 Shareholders� equity � 24,129 � 32,704 $ 27,712 $ 42,894 � � Note 1: Derived from audited financial statements GENELABS TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited) � � For the three months ended September 30, � For the nine months ended September 30, � 2008 � � � 2007 � � 2008 � � � 2007 � Revenue: Contract $ 30 $ 4,404 $ 6,727 $ 12,212 Royalty � 270 � � 236 � � 711 � � 718 � Total Revenue � 300 � � 4,640 � � 7,438 � � 12,930 � Operating expenses: Research and development 3,655 3,335 11,916 11,016 General and administrative � 1,647 � � 1,672 � � 5,971 � � 4,990 � Total operating expenses � 5,302 � � 5,007 � � 17,887 � � 16,006 � Operating loss (5,002 ) (367 ) (10,449 ) (3,076 ) Gain on sale of long-term investment - - - 1,189 Interest and other income � 124 � � 279 � � 570 � � 876 � Net loss $ (4,878 ) $ (88 ) $ (9,879 ) $ (1,011 ) Net loss per common share � basic and diluted $ (0.11 ) $ 0.00 � $ (0.23 ) $ (0.03 ) Weighted average shares outstanding to calculate basic and diluted net loss per common share � 43,685 � � 30,186 � � 43,401 � � 29,115 �