SurModics last week announced a restructuring in which it will lay off 13 percent of its employees and rearrange its organizational structure into three business units.
The Eden Prairie, Minn.-based firm, which specializes in drug delivery and surface-modification technologies, said the changes are designed to "more closely match operations and cost structure with the current customer environment" and to maintain "investment in long-term growth initiatives."
As part of the reorganization, its CodeLink microarray slide business will be rolled into its newly created In Vitro Diagnostics division, which "consists of component products and technologies for diagnostic test kits and biomedical research applications" as well as protein stabilization reagents, substrates, and antigens.
SurModics' other two new business divisions are Medical Device, which includes its surface modification-coating and drug delivery-coating technologies; and Pharmaceuticals, which encompasses a "broad range of drug-delivery technologies for injectable therapeutics, including microparticles, nanoparticles, and implants."
SurModics acquired the CodeLink Activated Slide business from GE Healthcare for an undisclosed amount in 2008 (BAN 10/7/2008).
The company has manufactured the slides since the CodeLink bioarray business was first developed at Motorola Life Sciences a decade ago, and makes the PhotoLink technology that is used to create a three-dimensional matrix that enables the attachment of biomolecules, including DNA, RNA, and proteins, to the slides. GE sold the CodeLink assets, minus the slides, to Tempe, Ariz.-based Applied Microarrays in 2007.
When SurModics acquired the slide business, it originally included it in its in vitro technologies unit. The company had maintained two other business units, called "drug delivery" and "hydrophilic and other." According to company officials, the firm decided to restructure to focus on its IVD and other businesses.
"It became apparent that the businesses in which we compete would be best served by a more focused business unit approach that is designed to drive improved profitability," Chairman Robert Buhrmaster said in a statement, "these changes better position SurModics for both financial and operational success."
As part of the restructuring, SurModics will reduce its total workforce by around 13 percent. The firm employs 250 people at its Minnesota headquarters and at a second site in Alabama. According to a filing with the US Securities and Exchanges Commission, SurModics expects to take a one-time restructuring charge of approximately $1.3 million to $1.7 million in the first quarter of fiscal 2011.
Also, in connection with these initiatives, SurModics expects to save approximately $3 to $3.5 million on an annualized basis. The company reported revenues of $121 million last year.
Interim CEO Phil Ankeny in a statement called the restructuring "difficult, but necessary," and said that "rightsizing the business provides SurModics with the flexibility to make investments and pursue growth opportunities in our Medical Device and In Vitro Diagnostics businesses."