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Med BioGene Cuts Costs as Cash Dwindles

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Med BioGene today said that it has taken steps to reduce costs, including cutting staff, as its cash on hand shrinks.

The Vancouver, Canada-based molecular diagnostics developer had filed for a US initial public offering nearly a year ago but said today that it has been unsuccessful in completing that offering due to "unfavorable and deteriorating market conditions." Med BioGene said that there are a number of investment funds "considering an investment in the US IPO, or in a structured private financing, [but] there can be no assurance that a financing will be completed.

Med BioGene said that it currently has negative working capital and enough cash on hand to support current operations for approximately 60 to 90 days. However, it added, "there are no assurances that MBI will be able to avoid payment of certain outstanding payables and, as a result, such timeline may be significantly reduced."

The firm has not said how many employees have been terminated, but noted that it also has reduced the number of consultants to the company and is evaluating strategic alternatives, which may include a sales of company assets, collaborative agreements, a merger of sale of the company, or a winding down of the firm.

MBI also said it has reduced its board of directors from eight members to four. The directors continuing with the firm are Erinn Broshko, Heiner Dreismann, Dennis Grimaud, and Kevin Rooney. The others, Bruce Cousins, Hector MacKay-Dunn, Michael Hayden, and John Rayson, have resigned as directors.

MBI had planned to launch in the US this year its LungExpress Dx test, a 15-gene signature panel for identifying those patients with early-stage non-small-cell lung cancer who, following surgical removal of their tumor, are at a higher and lower risk of mortality.

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