NMS Sells Garden Grove Lab Subsidiary

Citing keen competition and almost three years of consecutive losses, NMS Pharmaceuticals Inc. of Newport Beach announced Wednesday that it sold its Medex Laboratory unit to a subsidiary of the Mayo Foundation of Rochester, Minn., for an undisclosed sum.

A spokesman for NMS said that Medex, a full service clinical laboratory in Garden Grove, will be operated by Mayo’s Medical Laboratory Network in Ventura, leaving the Newport Beach medical test manufacturing firm to concentrate on research and development of new products.

NMS manufactures diagnostic kits for the early detection of pregnancy, allergy tests and cancer.

As a result of the sale, the fate of Medex’s 70 employees is uncertain. Company spokeswoman Jennifer Anderson said that while some people may be retained by NMS or Medex, some people may lose their jobs. She said the employees were notified of the change in ownership a few weeks ago.

Growing Losses

NMS suffered a loss in earnings and revenues from the time it purchased Medex in 1982, according to Anderson. She said that NMS, with $7.7 million in assets, lost $472,000 for the nine-month period ending Feb. 28, 1985. This followed a $585,132 loss for the same period last year.

Anderson said that 80% of NMS’s loss could be attributed to the Medex operation.

“There was a lot of outstanding debt assumed when we purchased Medex,” said Anderson. Given the large number of labs in Orange County, “we could not establish enough business in the reference laboratory area.”

A “reference” laboratory is one that analyzes, among other things, blood and urine tests which are sent from or referred by doctors and hospitals.

NMS’s President Joseph H. Irani refused to comment on the sale.