It’s all well and good for policy-makers to talk about encouraging innovation as the path to economic growth.
But for every innovative company in the life-sciences arena that attracts millions in venture capital, several others are tightening their belts as their cash burns away.
Last week, Rosetta Genomics Ltd. announced plans to cut its annual operating expenses by $4 million. Its total operating expenses were $7.89 million for the first half of 2010.
To produce a 32 percent reduction in its monthly burn rate, Rosetta Genomics plans to eliminate 14 positions, or about 20 percent of its global workforce, with cuts coming in research and development and general and administrative jobs. Founded in 2000, the company develops and sells diagnostic tests based on micro-RNA technology.
Rosetta Genomics’ remaining workers will move to a four-day workweek and receive a 20 percent cut in salary. As of the end of 2009, Rosetta Genomics employed 11 people at its laboratory at 3711 Market St. in West Philadelphia and 61 people at its principal executive offices in Rehovot, Israel.
Even with the changes, which took effect immediately, the company estimates it will have enough cash to fund operations only through March 2011. As of June 30, Rosetta Genomics listed cash and cash equivalents of $2.9 million on its balance sheet.
In a statement, Rosetta Genomics president and chief executive officer Kenneth A. Berlin said the restructuring would not affect its planned launches of the second generation of its miRview line of diagnostic tests.
The announcement followed the resignations of two executives recently. Dalia Cohen resigned as chief scientific officer as of Sept. 30. Limor Zur-Stoller stepped down as vice president of finance as of Oct. 1 to become chief financial officer of Rosetta Green Ltd., in which Rosetta Genomics holds a 76 percent ownership stake.
Rosetta Genomics had raised $4.65 million in an equity offering in January. Shares closed Monday at $1.11, up 11 cents, or 11 percent.
When the Philadelphia region landed the headquarters of Gardner Denver Inc. a few weeks ago, I reported that it really wasn’t going to mean a lot of jobs. The maker of industrial tools intends to relocate from Quincy, Ill., and create about 50 jobs somewhere in the suburbs.
But in the back of my mind, I wondered if another firm might not be heading in the opposite direction. Sure enough, Dynasil Corp. of America recently announced that it had moved its headquarters from West Berlin, N.J., to Watertown, Mass., as of Oct. 1.
“The Boston area now represents our largest concentration of commercial and research operations,” said Dynasil CEO Craig T. Dunham, noting that the instrument-maker has acquired a number of small companies there over the last five years.
Again, not many jobs are affected by this move, fewer than 20 of Dynasil’s 190 total employees.
Still, it’s a reminder that corporate headquarters tend to go where CEOs want them to be. History only counts for so much. Dynasil had been based in South Jersey since 1960, where it first began providing silica for military radar applications.
The recent acquisitions were launched by Dunham, who had acquired a large ownership stake in Dynasil six years ago. They had diversified the company into new markets, and revenues have grown accordingly. Dunham now owns about 20 percent of the company.
So Philadelphia has lost the headquarters of a growing company that generated $34 million in revenues in its fiscal year ended Sept. 30, 2009.
Let’s console ourselves with the pending addition of Gardner Denver, which also grows by acquisition, and its $1.78 billion in revenues for 2009.