SAN FRANCISCO, Nov. 21 - DoubleTwist and Hitachi have agreed to extend for an additional year a distribution deal as the bioinformatics company navigates the new market environment by attempting to preserve cash to rein in its burn rate, according to officials at DoubleTwist.
The agreement extends a deal made last year when Tokyo-based Hitachi agreed to purchase licenses to DoubleTwist's bioinformatics products with DoubleTwist granting the company exclusive rights to market and distribute the products in the Asia-Pacific region.
John Couch, CEO of DoubleTwist, told GenomeWeb during an interview at the company's Oakland, Calif. headquarters that the deal gave DoubleTwist an upfront payment, though he would not divulge the exact amount. "It's significant, it's cash," Couch said.
DoubleTwist plans to formally announce the deal soon, according to a company spokesperson.
In March, DoubleTwist laid off approximately 20 people, or about 10 percent of its staff. The company continues to bring down its staff numbers through "natural attrition … to cut burn rate," said Couch, who also said that management had taken a pay cut.
"My salary [last September] was for a company going public," said Couch. "Now it's cut."
DoubleTwist has since shelved plans for an IPO.
"We have to preserve cash and generate additional cash through revenue," said Couch, who said revenue in the third quarter was up compared to the same period last year.
The company also continues to entertain the possibility of being acquired, said Coach, especially as consolidation in the industry becomes more prevalent. Still, he contends that DoubleTwist's possible exit strategies also included an IPO or "running the course."
"I have spent a good portion of my time listening to larger companies [exploring acquisitions]," said Couch. "That's one potential avenue. I don't see the IPOs opening up until late next year, if then. My focus is to continue to sell [product] but also listen to opportunities that present themselves. We have a responsibility to our investors."
And if more cash is needed from investors to keep DoubleTwist on track?
"Stay tuned," Couch answered.