PARIS - The auditors of Appligène Oncor have accompanied the publication of the company's 1997 fiscal results with a warning to shareholders about the firm's grave financial situation. It recorded a net loss of FFr23 million last year, following one of FFr11.8 million in 1996.
Appligène Oncor, based near Strasbourg, supplies biological substances and equipment to organizations researching the human genome. In February, it reported a slight drop in revenues to FFr38.63 million in 1997 from FFr38.76 million in 1996. The company warned at the time that a restructuring operation under way would adversely affect 1997 earnings. (See BioWorld International, Feb. 25, 1998, p. 3.)
The 1997 loss was equivalent to 59.5 percent of revenues, compared to 30.4 percent in 1996.
The auditors attributed their warning not only to the size of Appligène Oncor's losses and the rapid depletion of its cash in hand, but also to the financial situation of its parent company, Oncor Inc., of Gaithersburg, Md.
In late April, Oncor disclosed it was cutting its staff by 40 percent and intensifying efforts to sell non-strategic assets. The company said it was trying to conserve resources to focus on its oncology work. However, Oncor officials also said the company could be sold.
Oncor took over Appligène in 1994 and, following a FFr50 million initial public offering on France's Nouveau Marché in July 1996, owns an 80.2 percent stake in the company.
The Oncor products distributed by Appligène in Europe account for about 50 percent of its revenues, said Marc Vander Linden, Appligène's chief financial officer.
Oncor recently sold two of its three business units to different companies in the U.S., Vander Linden told BioWorld International. Appligène has negotiated new distribution agreements with the purchasers of those operations so it could continue marketing those products.
“The warning issued by the auditors is based on published information,“ said Vander Linden. “Nothing new has happened.“
As reported in February, the company planned to reduce its French work force by about 20 percent. The staff has been cut to 41 from 51. However, no one has been laid off; the company simply did not replace employees who left.
The one bright spot for Appligène Oncor is that its business is now growing again, since revenues rose by 18.5 percent in the first quarter.
“The company is banking on an increase in sales in 1998, but all depends on the speed at which they increase,“ explained Vander Linden.
Sales were continuing to grow in the U.K., which now accounts for more than 20 percent of the company's turnover, partly thanks to a 34 percent jump there in sales in 1997. The French market, on the other hand, remains stagnant, he said. *