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Gene Logic Says Value of Assets from TherImmune Acquisition is Impaired, Lowers Revenue Expectations for Unit

NEW YORK, Sept. 23 (GenomeWeb News) - Gene Logic said yesterday that the value of the goodwill asset from its 2003 acquisition of TherImmune Research is impaired.


The company will announce the amount of the impairment by Nov. 9 after completing its review with a third-party valuation specialist.


Prior to the impairment, the goodwill asset for TherImmune, Gene Logic's nonclinical services subsidiary that is now called Gene Logic Laboratories, was valued at $43 million. Gene Logic acquired TherImmune in April 2003 for $52 million in cash and stock. The company said that it does not expect this "potentially substantial impairment charge" to lead to any future cash expenditures.


Gene Logic also said it has reduced its revenue growth and financial performance assumptions for the Gene Logic Laboratories business due to "customer reaction to issues raised earlier by the FDA", which it has since addressed, and because the laboratories' capacity is underused.


As a result, Gene Logic will update its financial guidance for 2005 in its next quarterly earnings report in late October.


Nonclinical contract research services contributed $5.82 million to Gene Logic's total revenues of $20.1 million during the second quarter of 2005. In the same period of 2004, the unit contributed $6.0 million to the company's total rvenues of $18.6 million.

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