Complete Genomics Cuts Staff, Hires Banker for ‘Strategic Alternatives’
Complete Genomics has seen its cash reserves dwindle and its stock tumble, and now it is sending a big group of its workers to the exits.
The Mountain View, CA-based company (NASDAQ: GNOM), which provides whole human genome sequences as a service for researchers and clinicians, said today it is cutting 55 workers. It has also hired Jefferies & Co. to help it explore “strategic alternatives” which it said could include a merger, business combination, sale, or equity investment. Complete had about 275 employees before the cuts, so this represents about a 20 percent cut of its workforce.
Complete said that even after the cutbacks, it will still maintain its capacity to sequence 1,000 genomes a month, but it will delay any further expansion until it sees demand materialize from hospitals and clinics for whole genome sequences.
“Leading hospitals, health care systems and physicians are beginning to adopt whole human genome sequencing for clinical applications,” said Cliff Reid, Complete’s CEO, in a statement. “Our industry-leading accuracy should position us well to capture this emerging opportunity.”
Complete has drawn attention over the past couple years as a bold new entrant in the genome sequencing field, with a different business model based on sequencing genomes as a service, rather than selling instruments to scientists. The company has been open about its desire to be the first to sequence 1 million genomes. But competition in the field has been fierce from San Diego-based Illumina (NASDAQ: ILMN) and Carlsbad, CA-based Life Technologies (NASDAQ: LIFE), which are locked in a race to sequence genomes for as little as $1,000 or less. While the competition has intensified, research customers who might want to buy the Complete service have seen their purchasing power weaken because of tightening in federal research budgets.
It’s all added up to trouble for Complete in its first couple years on the market. The company generated just $3.9 million in revenue in the first quarter, down from $6.8 million in the same period a year earlier. Expenses have continued to climb, up to $23.4 million in the first quarter, compared with $18.9 million in the same period a year earlier. The company ended the first quarter with about $40 million left in net cash, said Quintin Lai, an analyst with Robert W. Baird, in a note to clients today.
Complete went public in November 2010 at $9 a share. It saw its shares climb 8 percent to $2.21 on today’s news.