This article has been updated from a previous version to include information about the company's listing transfer.
NEW YORK (GenomeWeb News) – In a move to reduce costs, Nanogen said Thursday that it plans to transfer its Toronto, Canada, point-of-care manufacturing operations to its San Diego facility and to cease all manufacturing operations in Canada by the end of the year.
Nanogen said it expects to lay off around 30 people as part of the transition, and that the consolidation should enable it to reduce its overall costs by approximately $3 million beginning in 2009.
As of Dec. 31, 2007, Nanogen had 248 employees.
Separately, the company announced today that it has received approval to transfer its stock from the Nasdaq Global Market to the Nasdaq Capital Market, effective Tuesday, May 27.
Nanogen's trading symbol will remain "NGEN."
The listing transfer is in response to a delisting warning Nanogen received last November regarding its non-compliance with Nasdaq’s minimum bid price requirement of $1.00 per share. Nanogen said today that once its shares are transferred to the Nasdaq Capital Market, it will have an additional 180 days from the original May 27 deadline, or until the end of November, to regain compliance with the $1.00-per-share listing requirement.
The company’s shares were trading at $0.35 as of mid-morning Friday.
Regarding the transfer of its point-of-care manufacturing operations, Nanogen said the move to San Diego will take place over “the next several months” and that it does not expect the transition to affect customers.
The Toronto facility manufactures qualitative cardiac products that Nanogen purchased from Spectral Diagnostics in 2006.
Those operations will now be consolidated with the company’s immunoassay manufacturing activities in San Diego, which the company said will enable it to reduce costs and focus its resources on next-generation platform and products.
"The decision to consolidate these operations is driven by our commitment to improving profitability and reaching positive operating cash flow," said David Ludvigson, Nanogen's president and COO, in a statement.
"R&D and manufacturing will now be in the same facility and will be more closely aligned as we develop our future rapid testing products," he said.
The move follows a restructuring plan that Nanogen initiated last year, which involved closing its microarray business and laying off around 20 percent of its staff with the goal of focusing its business on its real-time PCR and point-of-care testing units.
Last week, in a conference call to discuss the company’s first-quarter financial results, Nanogen CEO Howard Birndorf said that the restructuring plan has “substantially improved” the company’s financial performance, but noted that Nanogen “will require additional financing to reach profitability.”