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Gene Logic's Q2 Revenue Falls 44 Percent on Weak Genomics Results

NEW YORK (GenomeWeb News) - Gene Logic today reported that total revenues for the second quarter declined nearly 44 percent due to weak performance in its genomics segment.
 
Receipts for the three months ended June 30 declined to $11 million from $20 million year over year.
 
The genomics division reported revenues of $4.7 million, a 67-percent decline over the prior year period. Declining subscription revenue, database license sales that failed to materialize, and slower-than-expected sales growth for microarray data-generation and -analysis services were blamed for the slide.
 
Gene Logic hired a strategy-consulting firm to review its business strategy, the company said. The review results will be released by Sept. 22.
 
As GenomeWeb News reported earlier this week, the company began restructuring its genomics division by announcing plans to lay off approximately 80 employees. The lay-offs are effective as of Oct. 5 and will cost $1.8 million in severance.
 
Gene Logic said it expects the lay-offs to reduce annual salary and fringe benefits costs by approximately $8 million.
 
R&D costs in the secnd quarter soared 84 percent to $2.5 million from $1.4 million from the comparable quarter a year ago.
 
Gene Logic said net loss quadrupled to $11.3 million from $2.6 million during the comparable period last year.
 
The company withdrew its financial guidance for 2006 and 2007 in June.
 
Gene Logic said it had around $24.8 million in cash and cash equivalents as of June 30.

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