NEW YORK, June 1 (GenomeWeb News) - MDS Proteomics today announced plans to shelve its drug discovery and development efforts and focus on its services business in a broad restructuring effort designed to reach cash flow breakeven by the end of 2005.
The company said it will embark upon a three-pronged services model centered around biomarker identification, lead optimization, and protein analysis and will "substantially discontinue" its drug discovery and development activities.
MDS Proteomics said it plans to reduce its quarterly net cash burn rate to between Can$2.5 million ($1.8 million) and Can$3.0 million in a reorganization effort that will bring its total headcount to 72. The company did not provide details on its current burn rate or headcount.
MDS Proteomics said it will also convert all of its existing funded debt into equity in the reorganized company, and that it will sell access to its tax assets and an "ongoing technology access agreement" to MDS Inc. for Can$15 million. As a result of the proposed reorganization, MDS Inc. will hold less than 50 percent of the common equity in MDS Proteomics.
The company said that it has launched a proteomics analytical services unit called Protana Analytical Services that will focus on identifying proteins in biological samples. Additionally, MDS Proteomics said it will merge with OptiMol - its lead optimization business unit in which it holds a 50 percent stake. The company said it will also collaborate with MDS Pharma Services to offer biomarker identification and assay development services for biopharmaceutical customers.
MDS Proteomics announced plans to create these new services businesses in its first-quarter earnings report in March.
The company said that it anticipates "full implementation" of its reorganization plan by mid-July.