Sequenom Announces Cost Cutting Initiative in Genetic Analysis Business; Includes Decreasing Its GA Workforce By Approximately 30 Employees
SAN DIEGO -- SEQUENOM, Inc. today announced that as a result of the continuing weak outlook in 2009 for capital equipment sales, particularly in the USA, the company has implemented cost cutting initiatives in the Genetic Analysis (GA) business to ensure the unit remains financially strong and approaches cash flow breakeven. These measures are expected to generate increased operational efficiencies and reduce costs while continuing to allow SEQUENOM to serve the needs of its current and future genetic analysis customers. In addition, SEQUENOM is also repositioning the GA business to better exploit potential synergies with the molecular diagnostic business by focusing on developing methods and assays for translational research and patient profiling in clinical trials. These measures are also designed to leverage the short- and longer-term potential of the company's molecular diagnostics business, where SEQUENOM continues to invest.
The company is decreasing its GA workforce by approximately 30 employees with immediate effect. The realignment along with other efficiencies is expected to result in an $8 million decrease in costs in 2009 and an annualized reduction in costs of $10 million. Estimated charges of $850 thousand will be recorded in the second quarter of 2009 in connection with one-time employee termination benefits including severance. The company will support and add resources to the GA business unit as the economy shows improvement and revenues resume an upward trend.
"These actions are difficult but essential. While we remain optimistic that the outlook for the genetic analysis business will improve, we also need to exercise financial prudence to ensure that our capital resources are properly allocated and utilized," said Harry Stylli, PhD, president and chief executive officer of SEQUENOM. "We will continue to serve our traditional customers such as academic institutions focused on genotyping, methylation and gene expression. However, as our system uniquely combines high throughput with highly quantitative capabilities, our business unit has great potential value in new and growing markets, such as translational research, and in better exploiting the interface with the molecular diagnostics business.
"I would like to express my sincere gratitude for the contributions and commitment of all employees impacted by the workforce reduction," he added. "Our agility as a company has allowed us to implement a strategy over the past several years to focus on the high-growth area of molecular diagnostics, and to leverage the tremendous expertise and innovation generated by our fundamental understanding of genetics and history as a systems and applications provider in genetic analysis. We remain well positioned to launch our innovative SEQureDx prenatal technology in June."
SEQUENOM will provide additional details associated with this initiative with the release of its first quarter 2009 financial results, which is scheduled for April 30, 2009.
SEQUENOM is committed to providing the best genetic analysis products that translate the results of genomic science into solutions for noninvasive prenatal diagnostics, biomedical research, translational research and molecular medicine applications. The company's proprietary MassARRAY® system is a high-performance (in speed, accuracy and cost efficiency) nucleic acid analysis platform that quantitatively and precisely measures genetic target material and variations. The company has exclusively licensed intellectual property rights for the development and commercialization of noninvasive prenatal genetic tests for use with the MassARRAY system and other platforms. SEQUENOM maintains a Web site at www.sequenom.com to which SEQUENOM regularly posts copies of its press releases as well as additional information about SEQUENOM. Interested persons can subscribe on the SEQUENOM Web site to email alerts or RSS feeds that are sent automatically when SEQUENOM issues press releases, files its reports with the Securities and Exchange Commission or posts certain other information to the Web site.
SEQUENOM®, MassARRAY® and SEQureDxTM are trademarks of SEQUENOM, Inc.
Except for the historical information contained herein, the matters set forth in this press release, including statements regarding the Company's weak outlook in 2009 for capital equipment sales, the future financial strength and cash flow for the Company's GA business, expected impact of the Company's cost cutting initiatives on operational efficiencies and costs and its ability to serve its customers, potential synergies between the Company's GA business and its molecular diagnostics business and the expected impact and benefits of repositioning the Company's GA business, the short and long term potential of the Company's molecular diagnostics business, the expected financial impact of the Company decreasing its GA workforce, expectations regarding improvement in the economy and Company revenues resuming an upward trend, optimism regarding the outlook for the Company's genomic analysis business, the Company's ability to ensure that sufficient capital resources are properly allocated and prioritized, the potential value of the Company's GA business in new and growing markets such as translational research, the Company's expected launch of its SEQureDx prenatal technology in June, and the Company's ability to develop and commercialize diagnostic tests on multiple platforms, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the risks and uncertainties associated with the Company's operating performance, demand for and market acceptance of the Company's products, services, and technologies, research and development progress, new technology and product development and commercialization particularly with respect to new markets and for new technologies such as molecular diagnostics and laboratory developed tests, and particularly noninvasive prenatal diagnostics and laboratory developed tests, reliance upon the collaborative efforts of other parties, competition, intellectual property protection and intellectual property rights of others, government regulation particularly with respect to diagnostic products and laboratory developed tests, obtaining or maintaining regulatory approvals, and other risks detailed from time to time in the Company's SEC (U.S. Securities and Exchange Commission) filings, including the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and other documents subsequently filed with or furnished to the SEC. These forward-looking statements are based on current information that may change and you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the Company undertakes no obligation to revise or update any forward-looking statement to reflect events or circumstances after the issuance of this press release.