CombiMatrix Cuts Mukilteo Facility, CEO Resigns, Shifts to Diagnostic Strategy

4/19/10Follow @xconomy

Big cuts are happening at Mukilteo, WA-based CombiMatrix (NASDAQ: CBMX). CEO Amit Kumar is stepping down, expenses are being cut, and the board is betting the future of the company on diagnostics, not on its traditional business of selling genetic analysis instruments to researchers.

The company’s statement today is vague, but the news is clearly bad for people in Mukilteo. Operating expenses are being cut by 40 to 60 percent relative to its cash spending rate of $10.6 million in 2009. While CombiMatrix isn’t saying specifically what that means for Mukilteo, it did say that its Irvine, CA-based operation is being shielded from the cuts because it is involved in developing its technology for diagnostics, which is the future of the company.

Kumar didn’t immediately respond to an e-mailed request for comment, but I’ll update this story if he responds with some clarification on what this means for the Mukilteo operation. I wrote a detailed feature last June on the company’s plan to transform into a cancer diagnostics player after it was essentially crushed by bigger competitors like Santa Clara, CA-based Affymetrix and San Diego-based Illumina, which also make DNA microarray tools that help researchers examine which genes are turned on or off in a biological sample.

By last August, CombiMatrix said it intended to hire an investment banker to evaluate options to “unlock shareholder value,” which might mean a sale of the company, or the signing of a partnership. At the time, it said it had a year’s worth of cash left on hand. Now it says it had $13.5 million left in the bank as of March 31.

“CombiMatrix is at a major inflection point in its development,” Kumar said in a statement. “We have developed and launched a number of valuable diagnostic testing services, and we believe the best use of shareholder capital is to focus on selling and increasing the utilization of those tests.

Kumar will stay as CEO until the company finds a replacement, which it hopes to do before the end of June, the company said. More specifics on the company’s plan will be available by the company’s second quarter conference call on May 11.

CombiMatrix said it had 69 employees companywide as of December 31, with roughly half, or 34 of them, in Irvine, CA, according to its annual report filed with the Securities and Exchange Commission.

By posting a comment, you agree to our terms and conditions.

  • http://www.northcoastbio.com Johnny T. Stine

    Hey now – hold on…… I like Mukilteo….. Dr.Kumar, I’m ready to expand and I think I can provide some value generation. Go to my website (northcoastbio.com) and contact me from that info. I’d enjoy chatting with you. Love your location and in fact may have some interesting concepts that could help right the ship.

  • Joe W.

    It was a good call to shut down the Mukilteo location. Most of the senior management in there couldn’t even find their own butts if they used both hands. They were trying to manufacture something that they had no experience doing. Egos got in the way of bringing in the right people resolve the mfg issues, and many that did know manufacturing were let go early on by these guys. It’s a shame really, because the product held so much promise and could have really been quite amazing. If only the people running the show knew enough to get out of the way. Very glad Brooke resigned. Smart fellow, but way too academic with no mfg experience to be of real value. He was not qualified to be the COO of this operation and the collapse was inevitable. I saw that coming years ago. Hopefully someone with the money to invest that DOES understand how to manage a manufacturing business could buy the company and bring in the right people to bring it to market. This is a diamond in the rough.