NEW YORK, Sept. 4 (GenomeWeb News) - MDS may divest its Proteomics unit, and has begun looking for partners to take over the money-losing division, the company said today.
"We believe that MDS Proteomics has value ... but that MDS Inc. cannot fund it over the long term," Sharon Mathers, an MDS spokeswoman, told GenomeWeb today. "We'll be looking for alternate financing arrangements, whether that's partnering [or] R&D collaborations."
Mathers said MDS hopes to deal with the MDS Proteomics issue "as quickly as we can." She added that though the parent company "is a fairly well-developed health and life-sciences company, proteomics probably represents a different risk profile than we would normally like to be invested in."
She said that MDS Proteomics, which employs around 70 people, has enough cash on hand to survive until the middle of 2004.
In his company's third-quarter earnings report today, John Rogers, president and CEO of MDS, said that "over the last several months we have been focusing on several initiatives organized around four key priorities: focus on our core businesses, improve return on capital, deal with our non-core investments and change the way we do business." The statement continued: "MDS Proteomics continues to focus on identifying new financial and scientific partners as well as advancing existing collaborations. MDS Inc. does not intend to make any further investments in MDS Proteomics."
"We expect to see the impact of these initiatives next year," Rogers said.
Of MDS' its three units - MDS Proteomics, MDS Health Sciences, and MDS Life Sciences - Proteomics is the only one losing money. Revenue for MDS' Life and Health Sciences divisions, which provide lab services and equipment to hospitals, grew to CA$279 million ($203 million) and CA$184 million, respectively, during the third quarter 2003 from CA$269 million and CA$181 million for the same period one year ago. Also, both divisions enjoyed third-quarter operating margins of 8 percent (Health Sciences) and 20 percent (Life Sciences), MDS said.
By comparison, MDS Proteomics recorded zero revenues in the quarter and posted CA$8 million in net losses. Revenues for the third quarter 2002 reached CA$1 million, while net losses were CA$12 million.