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Gene Logic Shares Toxicogenomics Data with FDA’s IPRG in Wake of 44 Percent Drop in Revenues, Layoffs

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In the wake of major layoffs and disappointing second-quarter earnings, Gene Logic said last week that it will share toxicogenomics data with the US Food and Drug Administration for use in evaluating voluntary genomic data submissions.
 
The company’s total revenues for the second quarter were down 44 percent due to the underperformance of its genomics segment — the same segment for which Gene Logic officials previously expressed optimism for growth in 2006.
 
Total sales for the quarter ended June 30 declined to $11 million from $20 million year over year, while the genomics division reported revenues of $4.7 million, a 67-percent decline over the prior year period. The company blamed declining subscription revenue, database license sales that failed to materialize, and slower-than-expected sales growth for microarray data-generation and -analysis services for the slide.
 
The company said it planned to lay off approximately 80 employees in an effort to restructure its genomics division. Gene Logic expects the lay-offs, which will be effective Oct. 5, cost $1.8 million in severance. Ultimately, the lay-offs should save the firm about $8 million in annual salary and fringe benefits, Gene Logic said.
 
The firm’s net loss grew to $11.3 million from $2.6 million during the second quarter of 2005.
 
Gene Logic had about $24.8 million in cash and cash equivalents as of June 30.
 
Greener Pastures?
 
The poor performance of the genomics business represents a sharp turnaround from the company’s outlook in the beginning of the year. At that time, the company officials expected to add more customers and offer its genomics services in more markets and countries, said Gessler. Gene Logic added "more than 25" new clients for its genomics business during the year of 2005, and "completed two projects for two major pharmaceutical companies," CEO Mark Gessler said.
 
Trouble only became apparent when the company reported that its second-quarter and full-year revenue for the genomics unit would be “significantly lower" than anticipated. The company later withdrew its financial guidance for 2006 and 2007.
 
But the company hopes that sharing toxicogenomic data with the FDA’s Interdisciplinary Pharmacogenomics Research Group will raise its profile a bit, and help it our in the long term.
 
Gene Logic expects that working with the IPRG will give it further insight into how the agency views pharmacogenomic data submissions. The “long-term goal” is that the company may be able to develop more useful products through a better understanding of the agency’s concerns, said Donna Mendrick, the company’s vice president of toxicogenomics.
 
Gene Logic has been in discussions with the agency for “several months,” said Mendrick.
 
In addition to toxicogenomic data on humans, mice, and rats, the IPRG is going to get access to a “large number” of normal human, mouse, and rat tissues, said Mendrick.
 

The FDA-based group will likely use the data to provide context for genomic submissions consisting of a limited number of samples into context, she said. Sometimes gene expression in experimental animals fluctuates as the result of diet, time of day, gender, or a number of other factors. The company’s database “gives you a very good insight into what genes are and may not be reliable to look at” due to fluctuations caused by outside factors, she added. 

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