Genelabs Reports Fourth Quarter and Year-End 2007 Financial Results and Provides...

Genelabs Reports Fourth Quarter and Year-End 2007 Financial Results and Provides 2008 Outlook on Advancing HCV Pipeline

-- Company Reports Increased Revenue, Decreased Loss and Enhanced
Cash Position to Advance Diverse HCV Pipeline --
REDWOOD CITY, Calif.--(Business Wire)--
Genelabs Technologies, Inc. (Nasdaq:GNLB), a biopharmaceutical
company focused on discovering novel compounds for hepatitis, reported
fourth quarter and year-end financial results for 2007. The Company
also provided a 2008 outlook on its priorities for advancing its
pipeline of hepatitis C virus (HCV) inhibitors.

"In 2007, we continued to expand our HCV platform by promoting two
novel projects, NS4b and replicase, to lead optimization status. These
new programs, combined with our existing NS5a program, now provide a
broad foundation for future development of our internal candidates,"
said Fred Driscoll CFO. "In addition to the momentum of these internal
candidates, our partnered programs with Novartis and Gilead continue
to be active in preclinical development. We have the people, programs
and financial resources in place to build on the progress we have made
with our drug candidates. We believe the combination of these factors
will bring results that enhance Genelabs' value in 2008. The
operational priorities we have set for 2008 are as follows:

-- Select a candidate from among our three internal HCV drug
discovery programs and advance it into preclinical
development, with the future goal of progressing into clinical
development;

-- Achieve a milestone event from one of our ongoing HCV
collaborations; and

-- Leverage the value of our internal proprietary HCV candidates
to form a new partnership."

Financial results:

Genelabs reported 2007 revenues of $16.9 million, compared to
$11.2 million for 2006. Operating expenses were $21.7 million in 2007
compared to $20.6 million in 2006. For 2007, the company reported a
net loss of $2.3 million, or $0.07 per share, compared to a net loss
of $8.7 million, or $0.41 per share, in 2006.

The company also reported financial results for the fourth quarter
of 2007. Revenues for the three months ended December 31, 2007 were
$4.0 million, compared to revenues of $3.6 million for the three
months ended December 31, 2006. Operating expenses for the fourth
quarter of 2007 were $5.7 million, compared to $4.2 million for the
fourth quarter of 2006. The net loss for the three months ended
December 31, 2007 was $1.3 million, or $0.03 per share, compared to a
net loss of $0.4 million, or $0.02 per share, for the three months
ended December 31, 2006.

The increase in revenue for 2007 compared to 2006 resulted
primarily from our collaboration with Novartis Institutes for
BioMedical Research, Inc. (Novartis). The increase in operating
expenses in 2007 compared to 2006 resulted primarily from an increase
in the number of research scientists supporting our internal HCV
programs.

Genelabs had $37.6 million in cash and cash equivalents at
December 31, 2007 as compared to $18.6 million at December 31, 2006.
The Company estimates that its current cash resources will be adequate
to provide liquidity for existing operations into fiscal year 2010.

About Genelabs Technologies

Genelabs is a biopharmaceutical company focused on the discovery
and development of novel compounds for infectious diseases. In
addition to a late-stage drug candidate for Hepatitis E partnered with
GlaxoSmithKline, the company is advancing multiple partnered and
proprietary compounds designed to selectively inhibit replication of
the hepatitis C virus. For more information, please visit
www.genelabs.com.

NOTE ON FORWARD LOOKING STATEMENTS AND RISKS:

This press release contains forward-looking statements including
statements regarding the Company's business strategy and potential
results, our ability to successfully execute our operational
priorities for fiscal 2008, developments and new programs in the
Company's HCV platform and the future of the company's research and
development programs, including our ability to successfully advance
our infectious disease pipeline. 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
collaborations with Gilead, Novartis and GlaxoSmithKline; progress and
announcements by competitors regarding their HCV programs; regulatory
problems or delays regarding HCV; 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 ("SEC"), 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. All documents also
are available through the SEC's Electronic Data Gathering Analysis and
Retrieval system (EDGAR) at http://www.sec.gov or from the Company's
website at http://www.genelabs.com.

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*T
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

December 31, December 31,
2007 2006
------------ ------------
ASSETS
Cash and cash equivalents $ 37,575 $ 18,560
Other current assets 2,353 1,279
Property and equipment, net 2,854 1,011
Other long-term assets 112 1,222
------------ ------------
$ 42,894 $ 22,072
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities, including deferred revenue $ 10,190 $ 19,066
Shareholders' equity 32,704 3,006
------------ ------------
$ 42,894 $ 22,072
============ ============
*T

Note: Balances are derived from the audited financial statements.

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*T
GENELABS TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

For the three For the year
months ended ended
December 31, December 31,
----------------- -----------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) Note 1

Revenue $ 3,950 $ 3,583 $16,880 $11,209
-------- -------- -------- --------

Operating expenses:
Research and development 3,977 2,742 14,993 13,620
General and administrative 1,755 1,456 6,745 7,008
-------- -------- -------- --------
Total operating expenses 5,732 4,198 21,738 20,628
-------- -------- -------- --------

Operating loss (1,782) (615) (4,858) (9,419)

Gain on sale of long-term
investment - - 1,189 -
Interest and other income 458 250 1,334 734
-------- -------- -------- --------

Net loss $(1,324) $ (365) $(2,335) $(8,685)
======== ======== ======== ========

Net loss per common share, basic
and diluted $ (0.03) $ (0.02) $ (0.07) $ (0.41)
======== ======== ======== ========

Weighted average shares
outstanding to calculate basic
and diluted net loss per common
share 43,075 24,054 32,596 20,952
======== ======== ======== ========
*T

Note 1: Derived from audited financial statements.

Genelabs Technologies, Inc.
Frederick Driscoll, 650-562-1477
Chief Financial Officer

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