The Burrill Report

The next generation sequencing company Complete Genomics said it was taking steps to cut its burn rate as it restructures its business and seeks advice on strategic alternatives from investment bankers.

The company says it will eliminate about 20 percent of its workforce, or 55 jobs, and has put on hold plans to expand its capacity for analyzing whole genomes until demand supports such an expansion. Company officials expect to complete the job cuts by the end of the current quarter and anticipate taking a $1.5 million charge related to the restructuring in the second quarter, ending June 30.

Complete Genomics has retained Jefferies & Company to act as financial advisor to the company and to assist in its review of strategic alternatives, which it said could include a merger, business combination, equity investment, or sale.

Complete’s restructuring is the latest stumble for the area of next generation sequencing, which has suffered from a slower-than-expected uptake by the market and concerns about research budgets under pressure. The company, which completed a $54 million IPO in November of 2010 at $9 a share, saw its stock rise to nearly $17, but now hovers below $2.

For its most recent quarter, which ended March 31, the company reported sales of $3.9 million and a loss of $20.2 million or 60 cents per share.

The company said it plans to focus on development of clinical applications for its whole human genome sequencing service, while continuing to provide genomes to research customers.

“Leading hospitals, health care systems and physicians are beginning to adopt whole human genome sequencing for clinical applications,” says Complete’s CEO Clifford Reid. He described that market as an “emerging opportunity.”


June 07, 2012
http://www.burrillreport.com/article-complete_genomics_restructures_seeks_strategic_alternatives.html