Nanogen,
Inc., developer of advanced diagnostic products, announced
today that the Company plans to close commercial operations of the
array business and reduce staff by approximately 20%. Today’s
announcement follows the decision in September to investigate strategic
alternatives for the array business.
“Our analysis of alternatives for the array business
has not resulted in any financially meaningful
opportunities,” said David Ludvigson, Nanogen’s
President and COO. “We have determined that the best way to
meet our commitment to improving financial performance for our
shareholders is to focus on our real-time PCR and point-of-care testing
businesses. Eliminating the investment and operating costs for the
array product group will result in an operating expense reduction of
approximately $15 million. This significant improvement in the bottom
line will be achieved with minimal impact to our revenues.”
“The future of our company and our mission to be a
leading diagnostics company has not changed with this
decision,” stated Howard Birndorf, CEO of Nanogen.
“The acquisitions we have made in the past three years have
given us a good foothold in both the molecular diagnostics labs and the
point-of-care rapid testing market. We believe the long term growth
prospects for both of these product areas will drive significant future
value for the company.”
The restructuring resulted in a $6.9 million non-cash charge
to third quarter financials for inventory and assets related to the
array business. An additional cash charge of approximately $2.5 million
is anticipated in the fourth quarter related to employee severance
costs.