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Decode Genetics Closing Illinois Facility, Cutting 60 Positions

NEW YORK (GenomeWeb News) – Decode Genetics will close its Woodridge, Ill., facility and eliminate around 60 positions, the firm disclosed in a filing with the US Securities and Exchange Commission today.

Decode said that it expects to incur a total of around $1.5 million in cash expenditures connected with the closure of the facility and winding down of operations. Among those costs, it anticipates around $580,000 to be related to employee costs, $150,000 related to chemical disposal costs, $150,000 related to utility costs, and $460,000 related to contract termination fees.

In addition, Decode said that the closure of the facility means that its decode Chemistry subsidiary will default on the terms of its lease. The firm said that it cannot estimate the amount of charges it may incur as a result of defaulting on the lease. However, it does not expect the total cost in cash expenditures will be more than those already spelled out in the filing.

The firm did not say how much it expects to save from the moves.

Decode also said that it has increased the principal amount of a recently secured promissory note with Saga Investments to $1.87 million. Earlier this month, the firm had executed the promissory note with a principal amount of $700,000, which had an interest rate of 8 percent per annum and was payable in full on Oct. 11, 2009. Decode said today that the terms of the initial note remain in place.

The cash-strapped molecular diagnostics firm recently received a notice from Nasdaq that its stock is not in compliance with the minimum bid price rule, because the closing bid price for its shares had been below $1 per share for 30 consecutive business days. It has until March 15, 2010 to regain compliance.

In mid-afternoon trade on the Nasdaq, shares of Decode were down 2 percent at $.50 per share.

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