GeneLogic will reduce the number of employees in its genomics division and related corporate staff by eliminating approximately 80 positions, effective October 5, 2006. Staff in the company’s preclinical and drug repositioning divisions will not be affected by this action, said the company. GeneLogic estimates that the staff reductions will save about $8 million.
This staff reduction follows the June announcement from GeneLogic that the revenues for its genomics division would be significantly lower than anticipated for both the second quarter as well as for the full year 2006. The company also withdrew its previously issued financial guidance for 2006 and 2007.
In its second quarter financial report, GeneLogic disclosed that the genomics division had 67% lower revenue than the same period in 2005. Modest improvements in the preclinical division were offset by a substantial decline in genomics division revenue. Total revenue for the second quarter of 2006 was $11.3 million, compared to $20.1 million for the second quarter of 2005.
“Management is addressing the issues in our Genomics Division through our current strategic review process and recent restructuring of the business. We expect to disclose the results of that review to our shareholders by the end of September,” said Lynn Kieffer or GeneLogic.