NEW YORK (GenomeWeb News) - Lumera said today that it has discontinued operations for its Plexera proteomics subsidiary in conjunction with an agreement to merge with GigOptix, a privately held developer of integrated circuits for optical communication systems.
The combined company will be listed on the Nasdaq market under the name GigOptix. GigOptix’s CEO and chairman, Avi Katz, will serve as CEO and chairman of the company following the merger.
Lumera was founded in 2000 to develop optical network components based on electro-optic polymer materials. In 2006, the company formed a bioscience business unit to apply its organic polymer technology to the life science market, and this led to the formation of Plexera Bioscience last July.
The company said today that its decision to exit the life science tools business “will allow the combined company to focus its resources solely on the electro-optic space.”
Lumera said that day-to-day operations in Plexera will be discontinued “immediately” in order to conserve cash while the company “seeks ways to realize value from Plexera’s assets and intellectual property.”
As of the end of 2007, Lumera had $7.1 million in cash and cash equivalents.
James Judson, Chairman of Lumera, said in a statement that the company determined it does not have enough cash to see both its electro-optic and bioscience businesses “reach their full commercial potential.”
Judson said that after considering its strategic options, “it became clear that the greatest shareholder value would be derived by focusing on our electro-optic business.”
GigOptix's revenue for the first quarter of 2008 is projected to be around $2 million and $2.2 million in the second quarter. On a combined basis, the two companies expect to generate around $6 million in revenue for the first half of 2008.
The transaction is subject to shareholder and regulatory approval and is expected to close in the third quarter of 2008, Lumera said.