SurModics is cutting its workforce by about 13% and will reorganize its business in a move designed to help save $3–3.5 million a year. The firm specializes in the development of drug delivery and surface modification coating technologies, along with components for in vitro diagnostic test kits and specialized surfaces for cell culture and mircroarrays. The overall restructuring operation will result in SurModics incurring a one-time charge of about $1.3–1.7 million during the first quarter of fiscal 2011.
Reorganization of the business will involve SurModics separating its three core areas into distinct business units: medical devices, pharmaceuticals, and in vitro diagnostics. The Medical Devices business will cover surface modification coating technologies and drug delivery coating technologies for use with medical devices. SurModics’ pharmaceuticals business, which is based in Birmingham, Alabama, will have responsibility for a range of drug delivery technologies for injectable therapeutics including microparticles, nanoparticles, and implants. The Birmingham cGMP facility for manufacturing and development was opened in January this year.
SurModics’ third business unit, for in vitro diagnostics, will focus on component products and technologies for diagnostic test kits and research applications. Product ranges will include microarray slide technologies, protein stabilization reagents, substrates, and antigens. “Rightsizing the business provides SurModics with the flexibility to make investments and pursue growth opportunities in our medical device and in vitro diagnostics businesses, while positioning the company for long-term success in our pharmaceuticals business,” remarks Philip D. Ankeny, interim CEO, svp, and CFO. “Moreover, the new structure aligns our organization with the unique customer bases, technologies, development timelines, and markets served within each of our business units.”
SurModics reported recorded overall product sales of $5.8 million for its third fiscal quarter of 2010 (ended June 30), up 20% on the previous quarter. Royalties and license fees were up 20%, at $9.3 million, but R&D revenues were down 34%, at $3.5 million. Overall revenues of $18.6 million were up 1%. Operating income was $2.2 million and net loss was $0.9 million. The firm negotiated an additional five new licenses in the third quarter of 2010, for making 16 so far during the fiscal year. Its goal is to sign 18 new licenses in fiscal 2010.
Subsequent to release of the fiscal Q3 results, SurModics announced a new licensing deal in July. The agreement with Australian firm Clinuvel Pharmaceuticals covers use of SurModics’ biodegradable polymer implant technology with Clinuvel’s sustained-release afamelanotide implant Scenesse®, which is in Phase II development for the prophylactic treatment of UV and light-related skin disorders. SurModics points out that the firms have been collaborating on development of the Scenesse implant formulation for a number of years.