NEW YORK, May 30 - Visible Genetics said today it is looking to sell itself.
In a surprise announcement, the company said a sale would "include a modest premium" to its current share price. Shares in the Toronto-based tool company closed at $3.75 on the Nasdaq yesterday. Based on this figure its current market cap hovers around $65 million.
"While VGI is committed to acting in the best interest of its shareholders, the timing and outcome of this process is uncertain," the company said in a statement.
The decision to sell was made following strategic-planning talks that took place "over the past three or four months," according to company spokesman Bruno Maruzzo. "Recently one of the options we started considering was an acquisition or a sale."
In an interview with GenomeWeb, Maruzzo, who is also an investor relations official for Visible Genetics, said that the company has no plans to trim any of its 350-strong workforce, pull back R&D, or shutter facilities if a sale or acquisition fails to materialize.
Asked why Visible Genetics settled on this option when its less-than-stellar financial picture is on a par with the broader genomics sector, Maruzzo said: "I guess when and if [the acquisition or sale] happens then you'll see the terms and see that it's probably the best thing for the company."
Though he wouldn't elaborate, a statement made my CEO Richard Daly one year ago may offer a clearer perspective: "The future of our company lies in the clinical market, not the research market," he said. "Research customers using the company's sequencing products order less frequently than clinical customers, and selling to both markets would require separate marketing and distribution networks. The two don't have much in common."
Maruzzo added that the firm "has had serious discussions with a number of groups over the last few months" and expects a deal to close within the next six months.
Visible Genetics reported total sales in the current first quarter grew to $4.3 million from $3.6 million in the same period one year ago. Product sales led that drive, increasing to $4.2 million in the current first quarter from $3.5 million last year. R&D also inched up to $2.8 million in the first quarter 2002 from $2.7 million year over year.
Net loss for the three months ended March 31 swelled $10.8 million, or $.56 per share, compared with $9.4 million, or $.58 per share, over the first quarter of 2001, the company said.
Visible Genetics had about $749,000 in cash and cash equivalents as of March 31, a free-fall drop from the $16 million it had three months earlier, it said.
The company, headquartered in Toronto, has a production facility in Atlanta, a European base and a research facility in the UK, and maintains operating companies in France, Spain, Italy, Portugal, and Israel.
A new date for a postponed conference call has not been set, said Maruzzo.
Shares in the company fell nearly $1, or more than 25 percent, to $2.80 in morning trading on Thursday.