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Star-crossed NetGenics Cuts its Cast

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Even when a bioinformatics company has layoffs, bioinformaticists are the last to go. NetGenics recently laid off 29 of its 100-person workforce. CEO Manuel Glynias says cuts were primarily made in the administrative, consultancy, IT, and marketing departments. “Essentially no programmers” were let go, he says.

Glynias blames poor market conditions, which foiled NetGenics’ IPO plans. “We haven’t been able to get the IPO done and it doesn’t look possible for the next quarter or two,” he says.

NetGenics’ IPO attempts have been ill-fated from the start. The company was due to start its first roadshow when its biggest contract, with American Home Products, fell apart. “It was a mistake for us to try to do that big a deal in the first place,” Glynias says in retrospect.

Plans to sign Pfizer and an existing deal with Abbott Labs also went down the tubes last year. But according to Glynias, the layoff resulted from a lack of capital, not from problems getting business. NetGenics currently has about 10 customers and no further plans to raise more money privately.

The company still has “enough cash for at least a year,” Glynias says, adding that the layoffs do not reflect declining revenues. But company sources confirm that selling NetGenics could be the next step for this financially-challenged firm.

— Jennifer Friedlin and Bernadette Toner

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