SAN DIEGO, Oct. 25 – Incyte Genomics on Thursday announced it will jettison its custom genomics program and layoff roughly 400 employees as it restructures its business.
The discontinuation of the custom genomics product lines will lead Incyte to close its facilities in Fremont, Calif., and St. Louis, the company said. Details of the schedule for the shutdown were not disclosed.
The company also announced it was considering ending its internal therapeutic SNP discovery program, which is conducted in Cambridge, England, by the end of the year.
“The markets for microarrays, public domain clones, transgenics, and contract-sequencing services, where success is less dependent on our key competitive advantages, have been marked by increasing competition and margin erosion that appear to be a permanent trend,” Roy A. Whitfield, CEO of Incyte, said in a statement. “As a result, the custom genomics operations no longer provide a strategic benefit to our core database and intellectual property business and have increasingly been diluting our focus and our resources while contributing to our operating losses."
"Thus, we made the hard decision to divest or restructure these non-core product lines to enable us to more fully capitalize on the opportunities available to our core businesses,” he said.
“Following the restructure, we will continue to participate in the proprietary clone market,” added Whitfield. “With respect to the microarray market, we expect to benefit from the numerous strategic collaborations with microarray manufacturers that rely on our extensive gene content and currently provides a growing royalty stream.”
Incyte also posted third-quarter revenues of $57.3 million compared to $52 million for the same quarter a year ago.
The company's database and partnership programs accounted for $39.8 million of the revenue, up 13 percent from the year-ago quarter. Custom genomics programs, which have been targeted for discontinuation, brought in $12.2 million in revenue, equivalent to the third quarter in 2000, the company said.
Total cost of operations for the third quarter 2001 were $68.6 million, with $47.7 million in R&D, compared to $67.7 million, with $51.3 million in R&D, for the year-ago period.
As of Sept. 30, Incyte had total current assets of $592.9 million, including cash, cash equivalents, and marketable securities.