Biotechnology companies have invested millions of dollars into reserch

A. into research to attempt to create the coveted blue rose, which many observers
believe would be more profitable than those previously genetically engineered--- Those has no referent. Those could refer to blue rose that was previously genetically engineered. I think there is ambiguity in the sentence.
B. into research for attempting to create a flower many observers believe would
be more profitable than any previous genetically-engineered flower, the blue rose--- Incorrect modifier. The blue rose is not the previous genetically-engineered flower.
C. for research for the blue rose, which many observers believe would be more
profitable than any previous genetically-engineered flower. ---- Missing attempt to create. Change of meaning.
D. in research for attempting to create the coveted blue rose, which many observers
believe would be more profitable than any that was previously genetically engineered---- for attempting, I feel does not sound correct compared with 'to attempt'. Also wordy when it says would be more profitable than any that was....
E. in research to attempt to create the coveted blue rose, which many observers believe
would be more profitable than any previous genetically-engineered flower--- Correct.

Biotechnology companies (Subject) have invested (Verb) millions of dollars (Object) in research to attempt to create the coveted blue rose (Antcedent), which (Pronoun for "coveted blue rose") many observers (Subject) believe would be more profitable (Verb Phrase) than any previous genetically-engineered flower.

The second clause is a dependent or subordinate clause and thus is reliant on the first clause for its full meaning. I've broken down the sentence as best as I could to show the subject, verb and object relationship. I'll post the official explanation in a couple more days in case anyone else wants to provide any other input into why the correct answer is correct and the others are not. Sometimes its a matter of process of elimination, with the last one standing may or may not be the "correct" way to say the sentence but is the best way of the choices presented.

Official Explanation

Answer E - A vertical scan reveals the three choices "into research", "for research", and "in research". The proper usage is "to invest in X", not "to invest into X" or "to invest for X". So we immediately eliminate (A), (B) and (C). The other problem is the pronoun "those". Here, "those" has no clear antecedent. Structurally, the antecedent would appear to be either "rose" or "blue rose". It would not be logical for the antecedent to be "blue rose" since the sentence implies that the blue rose does not yet exist, so there could be no previously genetically-engineered blue rose. But even if we assume that the antecedent is "rose", which is singular, then the plural pronoun "those" is incorrect. We need an answer that fixes the problem either by using a correct and clear pronoun, or by naming the item instead of using a pronoun. (B) also presents an unclear structure by placing the object "the blue rose" at the end of the sentence, and separating it from its verb "to attempt to create" with the long modifying phrase "a flower many observers believe would be more profitable than any previous genetically-engineered flower". Now we look at (D) and (E). (D) does not fix the problem – it uses the pronoun "any" which is still singular and still has no clear antecedent. Also, (D) uses "(have invested) in research for attempting" which is unidiomatic. (E) fixes the problem by eliminating the pronoun and using the word "flower". This change makes the meaning of the sentence much clearer. Note that while "any" is used as a pronoun in (D), "any" is used as an adjective in (E), and thus the pronoun/antecedent problem is eliminated. (E) also uses the idiomatic "(have invested) in research to attempt". Thus (E) is the correct answer.

Hope this helps.

Please also explain the difference in usage of previous and previously...

'Previously' is an adverb , which can modify an adjective or a verb . 'Previous' is an adjective , which can modify a noun or other adjectives.

Here usage of both 'previously' and 'previous' is correct as they are modifying 'genetically-engineered' adjective that is modifying the noun 'flower'.

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