Losses, Layoffs Expected at Troubled Synbiotics
Synbiotics, a struggling San Diego biotechnology company, announced that it is expecting a significant loss in the current quarter and that it may lay off up to 30 employees in coming weeks because of restructuring.
In a prepared statement, Synbiotics said it would be reassigning or laying off about 30 employees in its animal health products operations. If all 30 employees are let go, the staff reduction would represent a 25% cut of Synbiotics’ 120-employee payroll.
Synbiotics’ chief financial officer, Norman C. White, said in an interview that the company is trying, despite the expected layoffs, to focus its resources on its animal health division, which makes veterinary vaccines and diagnostic products.
Synbiotics is spinning off or “de-emphasizing” its two other product areas, its human therapeutics and cell culture businesses, White said.
White said that as a result of the reorganization, the company expects to post a significant restructuring charge in the fourth quarter ending March 30 and a loss that will exceed the $581,000 loss reported for the same three months last year. The company will report its financial results for the third quarter ended Dec. 31 in coming weeks.
For the six months ended Sept. 30, Synbiotics posted a loss of $1.76 million on sales of $4.8 million, contrasted with a loss of $2.8 million on revenue of $2.9 million for the same two quarters last year.
The company’s product sales, most of which are derived from animal vaccines and diagnostic kits, totaled $3.3 million over the first six months of this fiscal year, up from $1.8 million over the same six months in the previous year. The balance of the company’s revenue comes from licensing fees and contract research.
Despite accumulated losses totaling $11 million since the company was founded in 1979, the company is apparently in no immediate danger of insolvency. As of Sept. 30, Synbiotics had $15 million in shareholder equity and $8 million in cash or cash equivalents.