BASi is planning further cost cutting actions after continued weakness in toxicology led to a double-digit drop in revenue.
Sales slumped 17 per cent year-on-year as long-standing weakness in bioanalytical and toxicology dragged on financial performance. With BASi projecting a flat toxicology market it is trying to cut costs across the business.
“We are moving forward as rapidly as possible on the restructuring of our bioanalytical laboratory operations announced in March”, Jacqueline Lemke, the new vice president of finance at BASi, said.
BASi expects to finish decommissioning its Oregon bioanalytical lab this month. Talking to investors in a conference call Tony Chilton, CEO of BASi, said the CRO (contract research organisation) has kept its clients despite the closure.
With work at Oregon nearing completion BASi is looking to cut costs in other areas of the business. In the coming quarter BASi will take actions to save $2.5m (€1.9m) a year at two Indiana facilities and is “evaluating several options” to improve financial performance at its UK laboratory, Lemke said.
BASi is taking the steps to halt its recent decline. In the first half of the year BASi posted an operating loss of $3m, compared to a profit of $1.2m in the prior year period. Chilton and Lemke both said the results are “not indicative of the performance we expect”.
Lemke said: “We are going to turn it around. The six months that you just saw, you are not going to see them again.” BASi is looking to emerging areas of its business, such as discovery, to offset weak demand for toxicology services.
Toxicology quote activity has actually improved, Chilton said, but the acceptance rate was “much, much slower” than in earlier years. This means work toxicology BASi would normally start in the second quarter is now pushed back until later in the year.