Transgenomic CEO Collin D'Silva has resigned this week and will be replaced on a temporary basis by CFO Michael Summers until a permanent replacement can be found, the company said.
The firm, whose share price and revenues have suffered in recent months, also said that D'Silva will "evaluate corporate strategic alternatives" for the company.
D'Silva's departure comes four months after Transgenomic announced it would rid itself of the last vestiges of its nucleic acids business to focus largely on marketing its Wave genotyping platform and related consumables, as well as its fee-for-service mutational-analysis business.
But although the change in management might be part of a larger plan to name a CEO to lead the company in its new incarnation, D'Silva's departure could have been precipitated by ongoing financial woes at Transgenomic.
The company's reference to evaluating corporate strategic alternatives probably referred to the sale of its Glasgow, Scotland nucleotide-manufacturing facility, which Transgenomic said in December it planned to shed, but the firm did not specify in its statement this week.
Transgenomic still has not found a buyer for the facility, although it has begun procedures required for the sale, including notifying affected employees, according to documents filed last week with the US Securities and Exchange Commission. The firm expects to incur about $720,000 in costs related to statutory payments to employees and other costs related to the closure, "which have been accrued at December 31, 2005," the company said.
Transgenomic also expects to incur $250,000 more in each of the first two quarters of this year related to the closure that it will record in discontinued operations, the company said. The firm also recorded an impairment charge of $8.02 million "consisting of valuation adjustments to reflect the carrying value … at estimated fair market value," Transgenomic said.
The company last week reported a decline in net sales of 21.3 percent for the fourth quarter of 2005, to $5.3 million from $6.8 million in the year-ago period. Transgenomic's net loss for the period ended Dec. 31, 2005 almost doubled to $11.2 million, compared with $6.9 million in the fourth quarter of 2005. Transgenomic did not break out its R&D expenses. As of Dec. 31, Transgenomic had $6.7 million in cash and cash equivalents.
Transgenomic's financial difficulties include flirting with Nasdaq delisting. Near the end of February, the firm received a letter from the exchange indicating that the company was failing to maintain a $1 minimum bid price requirement, and had until Aug. 14 to regain compliance. The share price must close at or above $1 for 10 consecutive days, though Nasdaq may require the company to maintain that closing price for a longer period before determining compliance.
Transgenomic's share price last closed above $1 on Feb. 14. In February, the company received a letter from the Nasdaq indicating that the company does not comply with the $1 minimum bid price requirement. According to the letter, which was received Feb. 15, Transgenomic has until Aug. 14 to regain compliance. The share price must close at or above $1 for 10 consecutive days, though Nasdaq may require the company to maintain that closing price for a longer period before determining compliance.
— Chris Womack ([email protected])