BioWorld International Correspondent

MUNICH, Germany - Reacting to a significant drop in sales and increasing losses, MWG Biotech AG will reduce its staff from 351 to 140. Of those cuts, about 90 are expected to fall in Germany, with the balance divided among the company's global operations.

Sales in the first three quarters of 2004 amounted to €26.5 million, about 20 percent lower than the same period last year. Earnings before interest, taxes, depreciation and amortization showed a near doubling of the company's losses, to €6.8 million.

The company said that its core businesses were nearly in balance, with losses coming primarily from its genomic diagnosis and genomic technology areas. MWG plans to sell those divisions, which account for about 70 employees. The rest of the layoffs are expected to be in sales and administration.

MWG's core businesses are genomic information (DNA sequencing) and genomic synthesis (production of synthetic nucleic acids). Those areas are expected to bring in €22 million, with a net loss of €700,000.

"Our goal is to be profitable by the end of 2005," said Chairman Wolfgang Pieken. "Next year we hope to grow at least at the same rate as the market as a whole."

MWG expects sales for 2004 to reach €31 million, compared with €43 million in 2003. Losses for the year are expected to reach €9.4 million, not including costs associated with personnel reductions.

The company said that it will remain active in all of its current markets, and that production facilities in the U.S. and India will be retained.

In May, MWG raised €3.9 million in new capital.

MWG was founded in 1990. It started as a service provider in genome research, offering production, analysis, sale and development of biologically active molecules. Over time, it added production and sale of apparatus for molecular biology laboratory applications.