Having ridden the COVID-19 testing wave as far as it will take them, laboratory diagnostic companies are now settling in to manage bearish conditions. Restructuring has become the order of the day for many of these firms, with nurses and skilled lab technicians in short supply and just about every other position on the chopping block. No fewer than eight significant lab companies have announced significant staff cuts since 2023 began:
Cue Health: After seeing revenues decline by 69 percent in 2022 Q3, Cue Health cut its workforce by roughly 26 percent (388 employees) as part of a new cost reduction plan. Times have been tough for the COVID-19 testing lab that went public via a $200 million initial public offering (IPO) in September 2021. The new round of layoffs, which officially take effect in March, comes after the firm cut 170 jobs in June. They also carry a hefty price tag, with Cue estimating that it will incur an aggregate restructuring charge of up to $8 million for the termination payments it will have to make.
Biocept: The day after Cue filed its SEC Form 8-K disclosing the cost reduction plan, Biocept announced its own restructuring process, including a 35 percent staff cut. The liquid biopsy firm did make one hiring, though, bringing in EF Hutton to help it “preserve [its] remaining resources and extend [its] cash runway.” Potential options include acquisition, merger, reverse merger, asset sales, licensing, and/or other strategic transactions, the company added.
Verily Life Sciences: Alphabet subsidiary Verily Life Sciences kicked off the next round of layoffs on Jan. 11. As first reported by The Wall Street Journal, the life sciences company broke the news of its reorganization in an email to employees, more than 200 (15 percent of the company’s work force) of whom will be getting pink slips. “We will advance fewer initiatives with greater resources,” noted the email from new CEO Stephen Gillett. “In doing so, Verily will move from multiple lines of business to one centralized product organization with increasingly connected healthcare solutions.” Among the casualties are the Verily Value Suite clinical and financial insights platform and an early heart failure patient monitoring products program.
Personalis: On Jan. 16, Personalis filed its SEC Form 8-K disclosing plans to lay off approximately 30 percent of its workforce. The move will cost about $3 million in severance benefits and employee benefits but is expected to save the cancer genomics company $17 million in operating costs for the remainder of 2023. Earlier this month, Personalis estimated that its 2022 revenues will come in at $65 million, $2 million above its previous guidance.
PAVmed Inc.: The bloodletting continued on Jan. 18 when PAVmed and its subsidiaries, Lucid Diagnostics and Veris Health, announced the layoff of 20 percent of their employees. The commercial-stage cancer prevention and diagnostics company is struggling to stay afloat. In Q3, Lucid reported revenues of only $76,000, as compared to $200,000 in Q3 2021 and well short of its Wall Street estimate of $420,000. By slashing its workforce, the company is hoping to reduce its quarterly cash bleed by 25 percent.
Immunovia: The layoffs and restructuring bug also bit foreign diagnostics firms, with Swedish firm Immunovia announcing the layoff of R&D employees in the home country so that it could focus on US operations, particularly the commercialization of its new new ImmRay PanCan-d blood-based pancreatic cancer test. “Immunovia is in the early stages of commercial execution, and the scope of the in-house R&D and operations needs have changed,” noted the firm in a statement.
Guardant Health: Reeling from a December stock sell-off in reaction to setbacks in its blood-based colorectal cancer test ECLIPSE trial, precision oncology firm Guardant Health laid off 130 employees, approximately seven percent of its workforce. As reported by GenomeWeb, the staff reductions reportedly included the account management, bioinformatics, and technology development departments, according to LinkedIn postings of terminated employees.
Quantum-Si: In its most recent Form 8-K SEC filing, Quantum-Si disclosed that it’s planning to lay off roughly 12 percent of its workforce as part of a Q1 restructuring program. The proteomics firm has struggled since going public in 2021, with its shares trading at just above $2.00 after peaking at $20.49. The layoffs will cost the firm up to $1 million in severance payments and benefits.
For the full article and M&A report, see our February 2023 Laboratory Industry Report (LIR). Log in to your account or sign up for a free trial of LIR to gain access.