NEW YORK – Australian molecular diagnostics firm Genetic Technologies announced on Friday that it is restructuring its business to transition to a "capital light operations model," which will materially reduce operating costs, in an attempt to focus on US sales growth.
The change is also intended to move the firm's operations to an outsourced approach rather than conducting in-house laboratory operations. The restructuring will not affect the firm's EasyDNA and GeneType businesses, and existing partners, distribution channels, and manufacturing capabilities won't be impacted, Genetic Technologies said in a statement.
EasyDNA is an online marketplace for providing home DNA testing, tests for lifestyle, health, and well-being, and animal testing services. GeneType is a platform providing integrated genetic risk testing for a variety of serious diseases. The firm started US testing operations for GeneType in June.
The company will fund its working capital requirements and the initial cost of the transition with a short-term $800,000 secured loan facility.
In addition, CEO Simon Morriss will leave the company in September as a result of the change in operating model. The firm's current board of directors will assume executive roles to drive US market expansion, Genetic Technologies noted. The company will also move its Melbourne-based laboratory and use third-party contractors to provide a portion of its laboratory testing.
The changes are expected to reduce the company's monthly cash burn from $800,000 to below $200,000 with a yearly burn under $2.5 million. Genetic Technologies is aiming to be cash flow positive by the end of 2025 or shortly after, it said.