BASi starts restructuring to cut costs
The US preclinical services contract research organisation (CRO) said it will shift activities at its GxP sample analysis laboratory in McMinnville, Oregon to its headquarters in West Lafayette, Indiana.
BASi also said it is “evaluating actions” to improve the financial performance of its facility near Kenilworth, Warwickshire in the UK – where it also provides GxP sample analysis services – for which it has accumulated a net tax deficit.
In a press statement CEO Tony Chilton said: “By eliminating redundancies in expensive laboratory equipment and improving laboratory utilization, we expect this restructuring to strengthen our ability to meet our clients' needs even as it dramatically reduces our operating costs.”
BASi expects to save $2m (€1.5m) a year as a result of the restructuring, but said that it will incur a charge of roughly the same amount in the current fiscal quarter which ends on March 31.
Job cuts?
After the consolidation in the US Lori Payne, currently general manager of the McMinnville laboratory, will become vice president of bioanalytical operations in West Lafayette.
Quite what the restructuring will mean for other employees at McMinnville - or indeed their counterparts in Kenilworth - is unclear. However, comments by Chilton earlier this month during the firm’s results presentation suggest job cuts are a possibility.
He told investors that delays to a toxicology contract had hit revenues and investment in a new discovery services unit had increased costs and – in order maintain profitability – BASi would need to make sharp cuts to its spending, citing staffing as a potential area for savings.
BASi did not respond to Outsourcing-pharma.com’s request for comment ahead of publication.
