Genenews Axes 60% Of Staff To Boost New JV

Aug 22 2013

Molecular diagnostics company GeneNews is restructuring, reducing staffing levels by approximately 60% between today and November 30, 2013. The company says that the planned staff reductions will be focused on reducing its internal effort behind pure research, while maintaining its scientific competence and enhancing support for its business development, commercialization, and regulatory functions. Gailina J. Liew, GeneNews' president and COO, is also leaving the company and has resigned from its board of directors.

The firm says it is doing this as part of a plan to position its new joint venture, Innovative Diagnostic Laboratory (IDL), to become a leader in molecular diagnostics and personalized medicine. GeneNews says it initiated the strategic restructuring both to sharpen its focus on commercialization and to improve its overall cost structure, extending the company's cash runway so that it can support IDL's commercial success.

IDL, established in early July, will reportedly initially focus on the development and broader U.S. commercialization of ColonSentry®, which the firm says is the first blood test to assess an individual's current risk for colorectal cancer. It currently expects to launch ColonSentry into regions of the United States beyond New York and New Jersey through IDL during the third and fourth quarters. GeneNews also says it has already started to put together a list of other cancer tests IDL will be offering.

GeneNews reported in its most recent quarterly report a net loss of approximately $3.4 million, or $0.11 loss per common share, as compared to a net loss of approximately $2.5 million, or $0.16 loss per common share for the same six-month period in 2012.

"In many respects, we are just about to cross the starting line," said Liew at the time with regard to the report. "On the one hand, we are impacted by the ongoing challenges in the U.S. reimbursement landscape and have felt it through reduced royalty revenue. On the other hand, we are excited about the expected Q3 launch of the ColonSentry test into regions beyond New York and New Jersey through [IDL]."

In addition to this restructuring, the company has seen other changes since IDL's establishment including the appointment of James Howard-Tripp as executive chair of the board, and the stepping down of Heiner Dreismann, Ph.D., from the position of interim CEO. Dr. Dreismann is, however, continuing on as lead director.