- Women's health diagnostic firm, Progenity Inc PROG, will close its genetics laboratory as part of a strategic transformation that emphasizes its drug delivery technologies and therapeutics.
- Closing the lab and other "operational improvements" will allow the company to reduce annual the capital required for operations by approximately 70%, from more than $180 million to about $50 million in 2022.
- Progenity will focus primarily on its research and development pipeline and will stop offering its Preparent Carrier Test, Innatal Prenatal Screen, Riscover Hereditary Cancer Test, and Resura Prenatal Test.
- The strategic transformation is expected to be finished over the next two months and will include a 56% reduction of its total workforce, trimming 374 employees from its staff.
- The change is also expected to result in annualized cost savings of about $130 million in costs.
- After accounting for the costs of the change, the company's capital requirements are expected to be about $4 million to $5 million per month.
- Progenity's affiliate laboratory, Avero Diagnostics, has projected revenues for 2021 of $35 million to $40 million, and the company said it is "evaluating strategic opportunities" for Avero to generate capital.
- On a conference call to discuss the change, Progenity CFO Eric d'Esparbes said the firm was withdrawing its full-year 2021 guidance.
- Progenity will still develop its Preecludia preeclampsia rule-out test, Drug Delivery System platform, and Oral Biopharmaceutical Delivery System, along with gastrointestinal-targeted therapeutics and monoclonal biotherapeutics.
- It will also continue developing PIL Dx, its ingestible lab-in-a-capsule technology, as well as its single-molecule detection platform.
- Price Action: PROG shares are down 17.5% at $2.36 during the market session on the last check Wednesday.
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