Helicos BioSciences Corp. (NASDAQ:HLCS) is eliminating 40 jobs, or about half of its current workforce, as it gives up on its genetic analysis and drug discovery business to instead focus solely on the molecular diagnostics market.
The Cambridge, Mass.-based genomics company said last month it was exploring strategic alternatives to take better advantage of its DNA-sequencing technology and to address current and potential competition. The firm received orders for 10 of its Helicos Systems during 2009 but was able to fully recognize only two of those sales in last year’s financial results, generating $2.3 million in reported revenues.
Helicos also received $700,000 in grant revenues last year. In a May 17 statement announcing the change in corporate strategy and the upcoming layoffs, Helicos said about half of the 40 employees remaining on the payroll were supported by funding from the National Institute of Health.
Company executives also said Monday that the company would continue to support Helicos Systems now in the field but would increasingly shift resources into building up the new diagnostics strategy, including developing new products and applications for commercialization.
“One of the key growth drivers in the molecular diagnostics market has been the increased demand from both patients and physicians for assays,” Chief Executive Ron Lowy said in a statement. “We believe that Helicos’ technology is capable of meeting this need today.”
Although the Helicos System has only been on the market for little over a year, the company already has been losing ground to several larger and better funded rivals, including Life Technologies (NASDAQ:LIFE), Illumina Inc. (NASDAQ:ILMN) and the Applied Science of Roche (VX:ROG). According to a recent report by Isaac Ro, an analyst at Leerink Swan, Illumina likely controls 60 percent of the sequencing device market, followed by Roche and Life Sciences with nearly 20 percent each. Helicos probably has about 1 percent of the market, Ro estimates.
Scores of other established and startup companies likewise are working on genetic sequencing techniques.
Helicos was advised during the strategic evaluation by Thomas Weisel Partners, which also worked with the company last year when the firm sought a possible buyer.