Innotron Decides to Put Eggs in Different Basket
In an admittedly belated disclosure, struggling Innotron Diagnostics of Irvine announced Wednesday that it has a new president, has closed its insolvent manufacturing subsidiary in England and has changed its focus in the hotly competitive medical testing field.
Officials also said the company’s planned merger with ProMed Technologies, announced last June, fell through late last year because that company, an Irvine maker of medical testing computers, filed for bankruptcy.
In its first official report of its activities of the last six months, the company said Donald H. Frank became president Nov. 1, following the resignation of Jack Snyder. Snyder resigned the presidency in October after 10 months on the job, and early last month gave up his seat on the company’s board of directors. Frank, who also is a member of the executive committee and a director, previously served as a consultant to Innotron.
According to Frank, Snyder’s ouster set the stage for other moves that are designed to turn the tiny, money-losing company into a competitive manufacturer of blood-testing materials. The company has completed a switch from the manufacture of blood-testing equipment, an industry Frank described as declining, in favor of making disposable blood-testing kits.
“We’re now in the kit business and the potential is far greater,” Frank said.
“You can only sell one piece of equipment to a hospital, but you can sell tens of thousands of kits. And that’s where the growth is.”
Early last month, directors moved to close the company manufacturing subsidiary’s plant in Oxford, England. The plant, which employed 13 in the manufacture of Innotron’s blood-testing equipment, had been a consistent money loser for the 3-year-old company.
Company officials predicted that the plant’s closing would add to Innotron’s expected losses for the 1984 calendar year. In 1983, the company lost $1 million on revenues of $645,000. The 1984 results are expected within the next several weeks.
Frank said that before the changes, the company’s cash drain was so great that it would have depleted its resources in “a relatively short period of time” without bold action.
“The company was consuming cash faster than it was generating revenues and that was its history since its inception,” Frank said. “Quite obviously there were things that needed to be done and Mr. Snyder was not up to the challenge at the time.” Snyder could not be reached for comment.
During the last year, Frank said, Innotron has received Food and Drug Administration approval for five blood-testing kits. All the kits are chemically based and require fluorescent light to detect diseases and impurities, a distinct improvement, Frank said, from earlier equipment that used radioactive materials.
As for the delay in announcing the moves, Frank said: “I guess we were remiss, but I came into a situation that was so chaotic and there were so many other things to do that I just never got around to making the announcement until now.”
