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MDS' Q3 Revenues Drop Amid Sale of Analytical Technologies Unit

NEW YORK (GenomeWeb News) – MDS today reported a 21 percent decline third-quarter revenues and a sharp rise in its net loss, as the firm proceeds with the planned sale of its Analytical Technologies unit to Danaher.

The Toronto-based firm brought in total revenues of $199 million for the three-month period ended July 31, compared to $252 million for the third quarter of 2008. Revenues for the MDS Pharma Services segment dropped to $56 million from $76 million year over year, while revenues for MDS Nordion declined to $49 million from $72 million. Revenues for MDS Analytical Technologies fell to $94 million from $104 million.

MDS inked a deal last week to sell its Analytical Technologies unit, including its mass spectrometry joint venture with Life Technologies, to Danaher. Of the $1.1 billion that Danher will pay for the businesses, MDS will get $650 million in cash, while Life Technologies will get $450 million for its stake in the JV.

"The economic downturn, further softening in demand for contract research organization services and the unexpected and prolonged shutdown of AECL's National Research Universal (NRU) reactor created significant challenges for our business," Stephen DeFalco, President and CEO of MDS, said in a statement. "We believe the announced strategic repositioning of MDS will unlock the value of our businesses in the near-term, and provide greater opportunities for each of our businesses going forward."

MDS posted a net loss of $62 million, or $.51 per share, for the quarter, compared to a net loss of $10 million, or $.08 per share, for the third quarter of 2008.

Its R&D spending decreased to $16 million from $19 million, while its SG&A spending increased to $57 million from $53 million. The most recent quarter included a $25 million charge for impairment of goodwill.

MDS finished the quarter with $298 million in cash and cash equivalents.

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