NEW YORK, Sept. 27 - Decode Genetics has fired 200 people, or 30 percent, of its gene-research staff worldwide in a feverish attempt to "achieve positive cash flow" by next year, the firm said today.
The move will cut Decode's worldwide headcount to 450 from 650 people, the company said, adding it will use "ongoing process automation" to buoy gene research.
Decode has people working in 20 countries, including between 75 and 80 in the United States. US employees, most of whom work in the company's offices in Chicago, were told they were being fired before the company released a press notice at 6:00 a.m. Eastern time, a company spokeswoman said. A conference call was scheduled for 8:00 a.m.
"Given that the equity markets are effectively closed as a source of funding for research and development, it is essential for Decode to become self-sustaining if we are to have the staying power to reap the substantial upside from product development," Kari Stefansson, Decode CEO, said in the statement. "We believe that these measures will enable us to do so.
"The current economic environment dictates that we break even somewhat earlier than we had planned, and we have accepted this challenge as an opportunity to build a stronger business," he added. Decode had originally planned to break even in 2004.
Last month, Decode reported a surge in second-quarter total revenue and said that an increase in R&D spending caused net loss to swell to $16.8 million, or $.32 per share, from $12.3 million, or $.28 per share, year over year.
Total revenue for he period ended June 30 were $13.4 million, a 116-percent jump over the $6.2 million the company posted one year ago.
R&D spending in the quarter increased to $23.3 million from $16.3 million in the same quarter in 2001, in line with overall operating expenses, which grew to $29 million from $20 million in the second quarter 2001, Decode said.
Decode said it had roughly $121.4 million in cash and cash equivalents as of June 30.