In a corporate restructuring move aimed at generatingproducts and profits as well as streamlining operations, T CellSciences Inc. has reacquired the assets of its subsidiary, T CellDiagnostics Inc. As part of that move, the subsidiary will loseWilliam Gelb, its chairman and chief executive officer, as wellas 10 employees.
T Cell Sciences, based in Cambridge, Mass., announcedWednesday that it has acquired the 16 percent minorityinterest in the subsidiary, which it sold to a group of sevenprivate investors --including Yamanouchi Pharmaceutical -- in1991 for $4 million.
In the new transaction, valued at $4 million to $5 million, T CellSciences issued 660,000 new shares of common stock(NASDAQ:TCEL) to those minority investors. "They got 0.33shares of T Cell Sciences for each Diagnostics share owned,"explained Susan Primrose, T Cell's manager of marketdevelopment and communications. "Those investors now ownabout four percent of T Cell," Primrose told BioWorld. The stockissuance will bring the number of common shares of T Celloutstanding to approximately 14,166,000.
T Cell Diagnostics' products measure the level of solublereceptors in the bloodstream to monitor disease treatment orprogression. The subsidiary has been bringing in close to $4million annually on sales of 40 different products, Two ofthose products -- both ELISAS (enzyme linked sandwichimmunoassays) -- have marketing clearance from FDA; theothers are being sold for research purposes only. And the T CellDiagnostics subsidiary is awaiting clearance from FDA tomarket its latest immunodiagnostic, TRAx CD4, as a CD4 cellenumeration kit to be used in managing HIV-infectedindividuals. T Cell is currently "seeding" the European marketwith this product by introducing it to potential users, she toldBioWorld.
Through its reacquisition of the T Cell Diagnostics subsidiary,the parent company is hoping to "capture the value" of thoseproducts. "It permits us to apply the potential financial successof T Cell Diagnostics as a resource for the development of ourtherapeutic products portfolio," explained Alan Tuck, T CellSciences' president and chief executive officer, and "itfacilitates the operations of T Cell Diagnostics."
T Cell Diagnostics will continue to be managed as a separateoperating company within T Cell Sciences. William Gelb, whohas been chairman and CEO of the subsidiary, will be leavingafter helping with the transition. There are no immediate plansto replace him. To further cut costs, the staff of the subsidiaryhas been cut by 20 percent --10 individuals. The parentcompany says that "while there will be a one-time charge ofapproximately $250,000 in the third quarter of 1993, theannualized savings in 1994 will exceed $1 million."
T Cell Sciences reported a net loss of about $1.5 million for thesecond quarter of fiscal 1993 (ended June 30) and revenues ofclose to $2.6 million for the same period. It also reported cash-on-hand of $13.6 million.
The stock lost 13 cents Wednesday, closing at $6.50.
-- Jennifer Van Brunt Senior Editor
(c) 1997 American Health Consultants. All rights reserved.