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Despite Closing its Microarray Business in 2004, MWG Still Seeking Buyer for Assets

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MWG Biotech is in “active discussions” to sell the assets of its microarray business, despite shutting down the unit at the end of 2004, Wolfgang Pieken, speaker of the management board of MWG, told BioArray News last week.

The Ebersberg, Germany-based firm also said it had transferred its lab-automation business to Aviso, a lab automation products developer headquarterd in Greiz, Germany.

“We wound down our activities in bioarrays and microarrays towards the year end,” Pieken said. “However, we are still looking to sell some of the assets, so there should be some continuation of the business.”

MWG announced in October that it was seeking buyers for its microarray and lab-automation units in an effort to refocus on its core businesses — DNA sequencing services and oligonucleotide manufacturing (see BAN 10/13/2004). The company said during the fall that it would shutter the facility if a buyer was not found.

MWG established the microarray unit in 2000, and its assets include custom and catalog microarrays, including a 40K human genome chip; its ExpressArt mRNA Amplification Kits; a hybridization service; a bioinformatics service; and an online gene index for all of the catalog arrays’ content.

In a statement announcing the sale of the lab automation unit, MWG said the closing of the microarray business meant that no "further running cost will accrue from this business line in 2005 and the following years. However, a residual amount of one-time restructuring costs will impact the 2005 result."

In addition to gaining MWG’s Theonyx liquid-handling platform, Aviso has taken on 15 former MWG lab-automation employees. Terms of the deal were not disclosed.

Company officials believe that selling the two units will create the basis for long-term profitability. Together, the units brought in revenue of €8.5 million ($10.8 million) for the first nine months of 2004 compared to €11.5 million in the comparable period last year. For full-year 2003, the two units accounted for 37 percent of MWG’s total revenue of €43 million.

MWG is predicting total revenue of approximately €31 million and a net loss of roughly €9.4 million for 2004. The firm has yet to release its results for the last fiscal year.

Analysts covering the company had suggested that selling the microarray and lab-automation units may be difficult (see BAN 11/10/2004). According to Patrick Fuchs, an analyst who covers MWG for Frankfurt-based DZ Bank, the firm’s relatively weak patent position in both fields was a potential obstacle to finding buyers. He said in November that MWG has struggled to make the microarray business profitable due to its dependence on Affy’s intellectual property and the related license payments per spot it must pay.

The divestitures come at the end of a restructuring program undertaken in 2001, which lead to a staff cut, the resignation in August 2004 of Chairman Thomas Becker, and the decision to sell the microarray and lab-automation units.

These actions were followed with an announcement by MWG in October 2004 that it would reduce its headcount from 351 to 140 employees and “streamline the administration and sales structures” of the company.

— EW

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