The San Diego-based firm said closure of the unit will result in a staff reduction of about 50 employees by the end of the year, but it will also result in annualized cash flow savings of approximately $10 million. Sequenom believes the closure will enable the firm to fund the operations of its genetic systems business through 2006.
The company also reported its 2004 second quarter results today, reporting total revenues of $6 million, compared to revenues of $7.7 million for the second quarter a year ago. The firm's net loss increased to $9.9 million, or $.25 per share, compared to a net loss of $9.3 million, or $.24 per share, in the comparable quarter last year.
Revenues of the genetic systems unit were $5.8 million for the quarter, compared to $7.3 million for the second quarter of 2003. Revenues for its pharmaceuticals unit were $200,000, a slight decline from revenues of $300,000 in the second quarter last year.
As of the end of the second quarter, Sequenom had cash, cash equivalents, short-term investments, and restricted cash of $50.7 million.
There has been speculation that Sequenom CEO Toni Schuh has been under pressure to divest either the pharmaceuticals unit or the genetic systems, or to sell the company outright, as its share price has fallen and receipts have declined. (see article in GenomeWeb News' sister publication Pharmacogenomics Reporter)