NEW YORK (GenomeWeb News) - Nanogen has ended two months of speculation about the future of its microarray business by saying it decided to shut down the unit, lay off around 20 percent of its staff, and realign the company behind its real-time PCR and point-of-care testing units, the firm said Monday.
As GenomeWeb Daily News reported in September, the company had hired investment banking firm Credit Suisse to help it explore strategic options for the array business, which could have included selling the segment, finding a partner, or simply closing down operations.
“Our analysis of alternatives for the array business has not resulted in any financially meaningful opportunities” David Ludvigson, Nanogen’s president and COO, said in a statement.
Ludvigson projected that shedding the microarray business from its books would lower its operating expenses by around $15 million per year.
Earlier this week, Nanogen had said in its third-quarter earnings report that an 11-percent revenue jump was offset by expenses and restructuring costs, although it projected annual growth of 25 percent in fiscal 2008 over the current year.
“The future of our company and our mission to be a leading diagnostics company has not changed with this decision,” Nanogen CEO Howard Birndorf said in the statement.
Nanogen expects to take on a fourth-quarter charge of around $2.5 million from employee severance costs related to the closure of the microarray business.