Scale-up problems force layoffs at Ambri

Listed biotech Ambri Ltd has laid off 15 staff in response to unexpected manufacturing problems in scaling up its biosensor technology for commercial production.

Regulatory and quality assurance specialists make up a large portion of the cutbacks, which in toto represent about 20 per cent of Ambri's remaining headcount of 80.

At Ambri's annual general meeting in November, managing director Joe Shaw signalled the company had underestimated the time it would take to move into commercial mode with the medical diagnostic products it is developing.

At the time, Shaw did not reveal what steps the company was contemplating but yesterday he said the cutbacks, which occurred about a week after the AGM, "were the only appropriate thing to do.

"We had started to build up for distribution but we underestimated how long it would take to complete the transition from a scientific base to a commercial product," Shaw said.

Besides regulatory and quality assurance personnel, the layoffs also claimed sales and marketing and production staff.

Shaw said the cutbacks were related to scale-up and manufacturing issues and did not reflect substantial problems with Ambri's underlying technology.

Its system uses a complex syringe disposal delivery apparatus "that proved to be not as reproducible as we had hoped," he said.

Ambri is cashed-up with nearly $20 million in hand thanks to a public float and the recent addition of US multinationals Dow Corning Corp and Genencor International to its shareholder register.

However it may take the company another two quarters to work through the production issues, Shaw said.

The new shareholders appear to have stepped into the gap created in Ambri's in-house expertise by the layoffs.

Dow Corning has dedicated nine of its California-based staff to readying Ambri's technology for commercial production, Shaw said.

Job cuts at Axon too

Meanwhile, Axon Instruments has also pared its workforce by 15 per cent as a cost reduction measure. The latest layoffs mean Axon has trimmed its staff by 20 percent in the last year, a reorganisation the company expects will save it more than $US4 million in 2003.

The struggling instrumentation company, which is forecasting a loss of up to $US10 million for the year to December 31, still holds approximately $US27 million in cash and securities.

The restructuring and expense reduction plan has been prompted by a combination of less-than-anticipated revenue from a depressed world genomics market, and significant increases to research and development expenses because the company undertook to develop a larger than usual number of new products.