Nanogen, Inc. today announced that it is evaluating strategic alternatives for its microarray business as part of an aggressive plan to achieve profitability. The microarray business includes the company’s NanoChip instrument system and related multiplexed reagents and consumables. The company has retained Credit Suisse to assist in the evaluation of alternatives which may include a sale, partnering or closure of the array business. The company expects to complete its evaluation of strategic alternatives within sixty to ninety days.
The goal of the strategic evaluation is to create a restructured business at Nanogen that can reach profitability faster and with greater predictability. The restructured business will continue to focus on clinical diagnostic markets with emphasis on real-time molecular and rapid point of care products. Nanogen has a strong intellectual property and technology base in both of these areas and Nanogen’s products are widely adopted and well accepted by customers.
“Financial expectations for the restructured business have not been completed and are dependent on the outcome of the strategic evaluation,” said Robert Saltmarsh, Nanogen’s CFO. “While specific goals will be discussed after the conclusion of our evaluation process, we expect that sale or closure of the microarray business will decrease expenses and improve cash flow by at least fifteen million dollars ($15 million) annually. We also expect the restructured business will show revenue growth on a year over year basis.”
“In taking this course of action, we recognize that our microarray technology is very good and customer reception is positive. However, multiplex molecular testing remains an early stage market with slower growth and lower testing volumes than we expected,” said Howard Birndorf, Nanogen’s chairman and CEO. “The cost and effort to develop the broad product menu needed to be successful while also working to develop the clinical market over the next several years are large efforts and are expenses that Nanogen can no longer afford on its own.”
“In the past year, we have begun to build a solid business with our real-time PCR products and Point of Care rapid testing solutions. By focusing on these businesses, we expect to significantly grow our presence in the diagnostics market and improve our business performance,” said David Ludvigson, Nanogen’s president and COO. “We hold significant intellectual property in the molecular and point of care areas and intend to continue developing proprietary, technology based products that add value in the clinical diagnostic market and are well accepted by customers.”
Webcast of Conference Call
Interested investors and others may participate in the conference call by dialing 866-578-5784 for US/Canada participants and 617-213-8056 for international participants. The participant code will be 64018228.
Audio of management's presentation will be available via live webcast on the investor relations section of Nanogen's corporate website at http://www.nanogen.com, and will be archived for one year. A digital recording of the call will also be available for 48 hours, beginning two hours after the completion of the conference call on September 18, and can be accessed via telephone at 888-286-8010 for US/Canada participants and 617-801-6888 for international participants. The passcode 36006805 will be required to listen to the playback.
