Exhibit 99.1
Genelabs Announces Receipt of Notice from Nasdaq
and Drug Development Restructuring
Redwood City, CA -- April 7, 2006 -- Genelabs Technologies, Inc. (Nasdaq: GNLB)
announced that on April 4, 2006 it received a staff deficiency letter from The
Nasdaq Stock Market (Nasdaq) stating that the company does not comply with
Nasdaq Marketplace Rule 4310(c)(2)(B). The Rule requires the company to have a
minimum of $2,500,000 in shareholder's equity or a $35,000,000 market value.
The letter from Nasdaq further stated that as determined by Nasdaq, Genelabs'
shareholders' equity was $2,347,000 at December 31, 2005 and that its market
value as of April 3, 2006 was $33,675,357. Nasdaq indicated that its staff is
reviewing Genelabs' eligibility for continued listing on The Nasdaq Capital
Market and requested that Genelabs submit a plan to achieve and sustain
compliance with The Nasdaq Capital Market listing requirements. Genelabs
intends to comply with the Nasdaq request.
Genelabs also announced that the Company has closed its data management and
statistical office in New Jersey. In addition, Dr. Mumtaz Ahmed, Vice
President, Drug Development, is retiring from the company. Dr. Kenneth
Schwartz, Vice President, Medical Affairs, is now leading the process of
designing an additional clinical trial for the company's Prestara(TM)
investigational drug for the treatment of systemic lupus erythematosus. Dr.
Schwartz is working with the U.S. Food and Drug Administration (FDA) in the
development of the protocol, which is targeted for completion approximately
mid-year 2006. Genelabs plans to conduct this clinical trial only if it secures
a source of funding for the study and believes that a protocol agreed with the
FDA will assist in obtaining funding for the trial.
"We have initial preliminary feedback from the FDA on our proposed Prestara
clinical trial design and are moving toward completion of the final protocol,
in which we propose to study time-to-flare as the primary endpoint. Data from
previous clinical studies GL95-02 and GBL96-01, both of which have been
published, showed a beneficial effect of Prestara on time to flare and the
overall rate of lupus flares in patients with stable disease. Separately, we
are continuing our business strategy of focusing our internal resources on our
hepatitis C virus drug discovery programs, and I am very pleased with the
progress we have been making," stated James A.D. Smith, President and Chief
Executive Officer. "Our preclinical development candidates continue to move
forward as we prepare to conduct IND-enabling studies later in the year. We are
also pursing several different avenues to secure additional funds for our
operations, and I hope to be able to update investors on the results of these
activities in the near future."
Financial Update
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As of March 31, 2006, Genelabs had cash, cash equivalents and restricted cash
of approximately $7.5 million. Genelabs intends to report its first quarter
2006 financial results during the week of May 8, 2006.
About Genelabs
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Genelabs Technologies, Inc. is a biopharmaceutical company focused on the
discovery and development of pharmaceutical products to improve human health.
We have built drug discovery capabilities that can support various research and
development projects. Genelabs is currently concentrating these capabilities on
discovering novel compounds that selectively inhibit replication of the
hepatitis C virus and advancing preclinical development of compounds from this
hepatitis C virus drug discovery program, while also developing a late-stage
product for lupus. We believe that these high-risk, potentially high reward
programs focus our research and development expertise in areas where we have
the opportunity to generate either first-in-class or best-in-class products
that will address diseases for which current therapies are inadequate. For more
information, please visit www.genelabs.com.
Genelabs(R) and the Genelabs logo are registered trademarks and Prestara(TM) is
a trademark of Genelabs Technologies, Inc.
NOTE ON FORWARD LOOKING STATEMENTS AND RISKS: This press release contains
forward-looking statements including statements regarding compliance with
Nasdaq listing requirements, plans to comply with the Nasdaq request,
development of a protocol for a clinical trial for Prestara, actions by the FDA
with respect to the protocol, the Company's business strategy, progress of the
Company's HCV drug discovery programs, progress in obtaining funding to
continue operations and for the Prestara clinical trial, and announcement of
our financial results. These forward-looking statements are based on Genelabs'
current expectations and are subject to uncertainties and risks that could
cause actual results to differ materially from the statements made.
Uncertainties and risks include, without limitation, that Genelabs may not be
able to raise sufficient funds to continue operations; delisting of Genelabs
common stock from the Nasdaq Capital Market; fluctuations in Genelabs' stock
price; failures or setbacks in our HCV research programs or in our
collaboration with Gilead; progress and announcements by competitors regarding
their HCV programs; regulatory problems or delays regarding Prestara(TM),
including an adverse response from the FDA or a determination to discontinue
development of Prestara; increases in expenses and Genelabs' capital
requirements and history of operating losses. Please see the information
appearing in Genelabs' filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, under the captions "Risk
Factors" and "Forward-Looking Statements" for more discussion regarding these
uncertainties and risks and others associated with the company's research
programs, early stage of development and other risks which may affect the
company or cause actual results to differ from those included in the
forward-looking statements. Genelabs does not undertake any obligation to
update these forward-looking statements or risks to reflect events or
circumstances after the date of this release.