A Diagnostics & Imaging Week

Nanogen (San Diego), developer of advanced diagnostic products, said that it will close the operations of its array business and reduce staff by about 20%. The company said it had decided 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, president/COO of Nanogen. “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.”

He said that the move will provide about $15 million in reduced expenses, adding: “This significant improvement in the bottom line will be achieved with minimal impact to our revenues.”

Howard Birndorf, Nanogen’s CEO, said the decision does not change the future of the company or its mission. “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,” Birndorf said.

The restructuring results in a $6.9 million non-cash charge to 3Q financials for inventory and assets related to the array business. An additional 4Q cash charge of about $2.5 million is anticipated, related to employee severance costs, the company noted.

Nanogen’s products include real-time PCR reagents and kits based on its MGB Eclipse probe technology, and a line of rapid point-of-care tests used in urgent care to aid in diagnosing heart failure.