Transgenomic begins closure of nucleic acids segment

By E. Janene Geiss

Philadelphia, Dec. 29 - Transgenomic, Inc.'s board of directors has voted to either sell or close and liquidate its nucleic acids operating segment, according to an 8-K filing with the Securities and Exchange Commission.

The decision, made by the board Dec. 22, was based on short- and long-term sales projections for products sold by the nucleic acids segment, including 2006 sales estimates of its largest customer, the filing said.

The assets of the operating segment were impaired as of Dec. 22 and a non-cash charge of $7 million to $10 million for this impairment is required to be taken in the fourth quarter of 2005. The charge is related to inventory, property and equipment, the filing said.

While the option of selling the segment is being evaluated, closing procedures have started and employees have been notified, the filing said. The number of employees affected was not included in the filing.

Closing the segment may lead to the closure of the company's nucleic acids facility in Glasgow, Scotland, as early as the first quarter of 2006, the filing said.

Cash costs of the closure would be about $1 million, the filing said, relating primarily to regulatory payments to affected employees. The company said it will record a charge related to these expenses in the fourth quarter of 2005.

Transgenomic is an Omaha, Neb., maker of scientific and technical instruments for the medical research and pharmaceutical markets.

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