NEW YORK (GenomeWeb News) - Nanogen said yesterday that it is looking for ways to exit its microarray business as part of a plan to achieve profitability and focus on its clinical diagnostics strategy.
The company said it has hired Credit Suisse to help evaluate its options, “which may include a sale, partnering, or closure of the array business.”
Nanogen said it expects to complete the evaluation of the array business, which includes its NanoChip instruments and related reagents and consumables, within sixty to ninety days.
The company expects that the sale or closure of the microarray business will decrease expenses and improve cash flow by at least $15 million per year.
Robert Saltmarsh, Nanogen’s CFO, said that if the company sells or closes the segment, "the restructured business will show revenue growth on a year over year basis."
Nanogen said it plans to continue to focus on the clinical diagnostic market, with an “emphasis on real-time molecular and rapid point of care products."
Howard Birndorf, Nanogen CEO, said in a statement that despite “positive“ customer reception for its microarray product line, “multiplex molecular testing remains an early-stage market with slower growth and lower testing volumes than we expected."
He added, "The cost and effort to develop the broad product menu needed to be successful while also working to develop the clinical market over the next several years are large efforts and are expenses that Nanogen can no longer afford on its own."
The plan follows several recent moves Nanogen has taken to augment its working capital, including a $50 million shelf offering in May and a $20 million convertible debt registered offering in August.