CombiMatrix has taken itself off the block and will instead continue to invest in its molecular diagnostics business, the firm said this week.
The Mukilteo, Wash.-based company said it has instructed its investment bankers to cease their work in identifying and pursuing potential partners for a merger, acquisition, or asset purchase.
The decision was not entirely surprising. Last month, CEO Amit Kumar called CombiMatrix an "attractive acquisition prospect" and said it would either very shortly announce a transaction or "cease these activities and focus on our operations and cash flow" (BAN 5/11/2010).
In September 2009 CombiMatrix hired investment bank RW Baird to help it consider future strategic options, including alliances, divestitures, and business combinations (see BAN 9/22/2009). The firm said this week that it had been in discussions with parties about a possible sale of the company or its assets. However, a few days ago its board of directors decided the firm should concentrate solely on building and growing its diagnostics services business.
CombiMatrix will continue to shift its remaining resources to CombiMatrix Molecular Diagnostics, its five-year-old, Irvine, Calif.-based subsidiary. CombiMatrix said in April that it would restructure its operations, a move that would include layoffs, moving its headquarters to Irvine, and finding a new "commercially oriented" CEO to replace outgoing chief Kumar (BAN 4/20/2010).
The company expects the restructuring to reduce its annual cash burn roughly by half to $5 million.
Last week, Kumar said CombiMatrix is "at an inflection point in its development and needs to refocus its efforts on increasing the commercial use of its tests. Often for young companies, such a transition is difficult and requires a change in management, strategy, and operations."
CombiMatrix believes the decision to end M&A activity and the announced restructuring is the "best course of action for the company and creation of total shareholder value," Kumar added.
A successor for Kumar has not yet been announced. The company said previously that it hopes to hire a new CEO to oversee its diagnostics business by the end of this quarter.