PARIS — Genset SA reported a substantially increased net loss of FFr93.9 million for 1997, up from FFr65.1 million in 1996, although revenues doubled to FFr98.7 million from FFr48.6 million.
The Paris-based genomics company's turnover was mainly boosted by a sharp rise in research and development income, which quadrupled to FFr64.2 million last year from FFr16.1 million in 1996.
Genset's other source of revenue, sales of synthetic DNA, edged up to FFr34.4 million in 1997 from FFr32.4 million the year before.
The biggest component of Genset's profit and loss account, R&D spending, jumped 73 percent to FFr152.3 million last year from FFr88 million in 1996. That was essentially due to the initiation of new research programs, which entailed a 50 percent increase in personnel, higher in-house consumption of synthetic DNA required for Genset's high-resolution mapping activities, and the depreciation of capital outlays at its genomics research center in Evry, south of Paris.
The spurt in R&D revenues in 1997 was due to the conclusion of collaboration agreements with Abbott Laboratories, of Abbott Park, Ill., in July for the joint development of pharmacogenomics services; and with Genetics Institute Inc., of Cambridge, Mass., in August, giving the U.S. company access to Genset's portfolio of 2,000 secreted protein genes.
Genset pointed out that Abbott's FFr59.7 million purchase of an equity stake in the company significantly lessened the impact of its substantial investments in the expansion of its research laboratories and the acquisition of new equipment in 1997. As a result, Genset's holdings of cash and liquid assets fell by no more than FFr57.8 million during the year, from FFr519.5 million as of Dec. 31, 1996, to FFr461.7 million at the end of 1997.
Genset said its R&D spending will continue to increase this year as a result of further expansion of its research facilities, the hiring of additional laboratory staff and the start of new gene discovery and screening programs. In 1997 the company hired 78 additional researchers, swelling its total R&D staff by almost 50 percent from 158 in January to 236 at the year end. Genset's total work force now numbers 360.
Despite the continued growth in R&D outlays, Genset's financial performance in 1998 will be strengthened by a further increase in R&D income, including milestone payments. The company still expects to break even in 1999.