What in the name of value creation has Strategic Diagnostics Inc. done?
Like many other companies, the Newark, Del. company has decided to sell off a business unit. However, the company, which rebranded itself SDIX in 2010, is apparently selling its last remaining business unit.
OriGene Technologies Inc., of Rockville, Md., will pay $16 million for the assets of SDIX's Life Sciences business. SDIX said OriGene has agreed to offer employment to a "substantial majority" of SDIX's employees.
All that will be left of this biotechnology firm that was started by three former DuPont scientists in 1990 is a "strong balance sheet," SDIX said in a statement.
SDIX's creation was an example of how a life-sciences company tends to happen in the Philadelphia region: Big Pharma talent strikes out on its own in a startup, raises capital, and develops new products. By the end of 2008, it employed 166 people, revenues had grown to $27.7 million, but the company had lost $15.8 million.
The revenue line proved difficult to move higher over the next few years and the losses continued. SDIX sold its water and environmental diagnostic products to Modern Water P.L.C. for $4.2 million in December 2011.
In October, SDIX sold its Food Safety and Genetically Modified Organisms business to Romer Labs Technology Inc. for $13.5 million. At the time, SDIX president and CEO Francis DiNuzzo said the sale was "another step in our strategic plan to be solely focused on our Life Sciences business."
DiNuzzo went on to describe SDIX's development of new technologies for generating monoclonal antibodies that could be used by biotech and pharmaceutical firms. "Based on current development plans, we believe we will have demonstrated proof of performance from this technology by the end of the first quarter of 2013," he said in announcing third-quarter financial results.
Or not. Nearly six months later, DiNuzzo described the sale of its Life Sciences business as a "natural progression for SDIX."
Care to guess what the next step will be for this penny stock? "The board will review alternatives for the company's cash and public-company status," SDIX chairman Steven Becker said in a statement.
Pronouncements like that usually are followed by a distribution check and a wave good-bye. So long, SDIX.
Contact Mike Armstrong