Irvine’s Pacific Biometrics Replaces Auditor

Pacific Biometrics Inc. said Monday it has hired Grant Thornton as its auditor, replacing another firm that resigned after the Irvine biomedical outfit recently restated its earnings.

The tiny company, which develops methods to diagnose and manage chronic diseases, also said it has retained a New York investment banker to help it raise as much as $5 million in private capital and look for a partner.

The investment banker, R&R; Capital Group Inc., was chosen because it understands the company’s business and offers good contacts in the financial community, said Paul Kanan, chief executive of Pacific Biometrics.

Kanan said the company will maintain its stepped-up depreciation of certain technology--an item that caused it to amend its financial results for the quarter ended March 31. On May 19, the company said its loss for the period would total $1.3 million, or 88 cents a share, instead of a previously reported loss of $1.1 million, or 62 cents.

On June 29, the company’s previous auditor, Coopers & Lybrand LLP, resigned. Pacific Biometrics attributed the change to the firm’s recommendation that it speed up depreciation for rights to a diagnostic skin patch technique it acquired last year.

Kanan said the company aims to raise new funds so it can pursue development of a skin patch for detection of osteoporosis and a saliva-based test for glucose levels.

The company plans to start selling its first product--the skin patch--in Italy this fall, he said. In the U.S., regulators recently asked the company to conduct more tests on the skin patch before it can be considered for sale.

Kanan noted that Pacific Biometrics’ Seattle-based laboratory services business--which has generated annual revenue of about $2 million--recently cut its payroll after contracts ended. The company now employs 34 people, down from 49.