Healthcare Industry News: Inverness Medical Innovations
News Release - March 18, 2008
Inverness Medical Innovations to Close Cholestech, HemoSense and BioStar FacilitiesWALTHAM, Mass., March 18 (HSMN NewsFeed) -- Inverness Medical Innovations, Inc. (Amex: IMA ), a leading manufacturer and marketer of rapid diagnostic products for the consumer and professional markets, announced today that as part of its continuing efforts to streamline its worldwide operations for the purpose of lowering operating costs and improving margins, it has commenced a process to close two facilities in the San Francisco area which currently house its Cholestech and HemoSense operations and a manufacturing plant in Louisville, Colorado which produces its BioStar OIA product lines.
The Cholestech operation, which was acquired by Inverness in September 2007 and manufactures and distributes the Cholestech LDX system, a point-of- care monitor of blood cholesterol and related lipids used to test patients at risk of, or suffering from, heart disease and related conditions will move to Inverness Biosite facility in San Diego, California. The HemoSense operation, which was acquired in November 2007 and manufactures and distributes the INRatio System, an easy-to-use, hand-held blood coagulation monitoring system for use by patients and healthcare professionals in the management of warfarin, a commonly prescribed medication used to prevent blood clots, is also expected to move to the Biosite facility in San Diego.
The transfers will take place in phases over the next 12-18 months and Inverness expects to begin to see manufacturing savings of approximately $10.0 million annually and general and administrative expense savings of $5.0 million annually beginning in the second half of 2009. Aggregate restructuring charges of approximately $12.0 million are currently anticipated for all costs including but not limited to write down of equipment and leasehold improvements, severance cost and rent obligations and these costs will principally be included as a component of the costs of the acquisitions of Cholestech and HemoSense.
In connection with Inverness' decision to exit the BioStar OIA product line, Inverness will also close its manufacturing facility in Louisville, Colorado around the end of the second quarter of 2008 with OIA products available for purchase through the end of the first quarter of 2009. Inverness expects general and administrative savings of approximately $3 million per year beginning in the second half of 2008 as a result of the closure. Aggregate restructuring charges of approximately $9.5 million including $5.6 million of writeoffs of intangible assets are currently anticipated for all costs including but not limited to write down of equipment and leasehold improvements, severance cost and rent obligations and these be recorded during the first half of 2008.
The Cholestech and HemoSense and BioStar operations currently employ approximately 180, 95 and 70 people, respectively. Some reductions in staffing levels for Cholestech and HemoSense are expected to be achieved as these operations are consolidated with existing operations in San Diego over the next 18 months, and the closure of the BioStar plant is expected to result in the elimination of approximately 56 positions. Field sales staff and certain back office functions from all three operations are already being consolidated as part of Inverness' previously announced formation of a centralized North American shared services center in Orlando, Florida.
By developing new capabilities in near-patient diagnosis, monitoring and health management, Inverness Medical Innovations enables individuals to take charge of improving their health and quality of life. A global leader in rapid point-of-care diagnostics, Inverness' products, as well as its new product development efforts, focus on infectious disease, cardiology, oncology, drugs of abuse and women's health. Inverness is headquartered in Waltham, Massachusetts.
For more information about Inverness Medical Innovations, please visit our website at http://www.invernessmedical.com.
This press release may contain forward-looking statements within the meaning of the federal securities laws, including statements regarding potential synergies and benefits of the business combination described above. These statements reflect Inverness' current views with respect to future events and are based on its management's current assumptions and information currently available. Actual results may differ materially due to numerous factors including, without limitation, risks associated with market and economic conditions; Inverness' ability to successfully complete the business transfers described above and to integrate these operations with its other existing operations in order to recognize the expected cost reductions and other benefits of the move; and the risks and uncertainties described in Inverness' annual report on Form 10-K, and other factors identified from time to time in its periodic filings with the Securities and Exchange Commission. Inverness undertakes no obligation to update any forward-looking statements contained herein.
Source: Inverness Medical Innovations
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