SEQUENOM Announces Cost Cutting Initiative in Genetic Analysis Business
News Apr 27, 2009
SEQUENOM, Inc. has announced that as a result of the continuing weak outlook in 2009 for capital equipment sales, particularly in the USA, the company has implemented cost cutting initiatives in the Genetic Analysis (GA) business to ensure the unit remains financially strong and approaches cash flow breakeven. These measures are expected to generate increased operational efficiencies and reduce costs while continuing to allow SEQUENOM to serve the needs of its current and future genetic analysis customers.
In addition, SEQUENOM is also repositioning the GA business to better exploit potential synergies with the molecular diagnostic business by focusing on developing methods and assays for translational research and patient profiling in clinical trials. These measures are also designed to leverage the short- and longer-term potential of the company’s molecular diagnostics business, where SEQUENOM continues to invest.
The company is decreasing its GA workforce by approximately 30 employees with immediate effect. The realignment along with other efficiencies is expected to result in an $8 million decrease in costs in 2009 and an annualized reduction in costs of $10 million.
Estimated charges of $850 thousand will be recorded in the second quarter of 2009 in connection with one-time employee termination benefits including severance. The company will support and add resources to the GA business unit as the economy shows improvement and revenues resume an upward trend.
“These actions are difficult but essential. While we remain optimistic that the outlook for the genetic analysis business will improve, we also need to exercise financial prudence to ensure that our capital resources are properly allocated and utilized,” said Harry Stylli, PhD, president and chief executive officer of SEQUENOM.
“We will continue to serve our traditional customers such as academic institutions focused on genotyping, methylation and gene expression. However, as our system uniquely combines high throughput with highly quantitative capabilities, our business unit has great potential value in new and growing markets, such as translational research, and in better exploiting the interface with the molecular diagnostics business.
“I would like to express my sincere gratitude for the contributions and commitment of all employees impacted by the workforce reduction,” he added.
“Our agility as a company has allowed us to implement a strategy over the past several years to focus on the high-growth area of molecular diagnostics, and to leverage the tremendous expertise and innovation generated by our fundamental understanding of genetics and history as a systems and applications provider in genetic analysis. We remain well positioned to launch our innovative SEQureDx prenatal technology in June.”