NEW YORK (GenomeWeb News) — Gene Logic today said it plans to sell its preclinical services business, has hired an investment bank to help with this goal, and is already talking with a possible buyer.
The decision is a departure for Gene Logic, which during a restructuring announced in September said the preclinical business will remain with the company.
In a statement at the time Gene Logic said its preclinical services business “continues to improve its financial performance. While the business is not yet profitable, the company expects operating margins to continue to improve and losses to narrow as the substantially increased pace of new business signings leads to growth in revenue. As a result of recent facilities expansions, sufficient capacity exists for growth in the near-term.”
As part of its reorganization, Gene Logic laid off 80 employees from its genomics business in order to focus on its drug-repositioning business.
Today, Gene Logic said the sale of its preclinical services segment is part of ongoing efforts to continue to “implement its strategic plan and is focusing its resources on those opportunities that it believes will have the greatest potential to increase long-term shareholder revenue.”
Gene Logic continues to offer its genomics services and to support existing and new customers as it continues its restructuring. It said it expects to “begin to see the results of these efforts in the fourth quarter.”
The company made these disclosures as it released its third-quarter earnings, which showed that revenues decreased 69 percent as R&D spending rose 44 percent and loss decreased 32 percent.
Total receipts for the three months ended Sept. 30 fell to $3.7 million from $11.8 year over year. Receipts were mostly from the genomics business.
R&D spending increased to $2.6 million from $1.8 million year over year.
The company said loss declined to $26.7 million from $29.4 million in the year-ago period.
Gene Logic said it had around $24.1 million in cash and cash equivalents and $21.4 million in marketable securities available-for-sale as of Sept. 30.