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Zurich, Switzerland, July 14, 2005 – Tecan (SWX: TECN) today announced that it has decided to discontinue its LabCD development programs. Due to difficulties in developing the LabCD technology and delays in its commercialization, the company will close its Tecan Boston facility in the United States. Tecan Boston, which employs 16 staff, is the research and development site for the LabCD microfluidics technology, a product intended to facilitate the drug discovery efforts of researchers at biotech and pharmaceutical companies. The anticipated net impact on Tecan’s 2005 profit before taxes will be CHF -3.2 million. This streamlining of its operations in Boston will improve the income statement by CHF 5.2 million per year beginning 2006.
Thomas Bachmann, CEO of Tecan, says: “The LabCD technology has not reached the development milestones put in place for this microfluidics technology for drug discovery assays. Despite showing promise in Early Access Programs with leading pharmaceutical companies worldwide, the LabCD has failed to reach the quality and performance standards Tecan has established for this technology.” He adds: “The pace of the past development program for the LabCD will not allow this technology to achieve significant economical competitiveness and substantial market share in the required time-frame. We therefore believe Tecan’s future competitive interests are best served by focussing on our core business areas and by terminating the LabCD project. Tecan will serve its existing customers by converting their current LabCD installations to alternatively developed 384-well microtiterplate-based assays.”
The LabCD is a microfluidics technology intended to allow scientists to perform key tests in the drug discovery process more quickly, reliably and at lower cost. Tecan obtained the intellectual property rights to the LabCD technology in 2000 after the acquisition of Gamera Bioscience Corporation, a Boston-based company that specialized in the development of microfluidics-based assay technologies. Initial assay development focused on metabolism tests for potential drug candidates being investigated by biotech and pharma companies. However, the milestones put in place by Tecan for the development and introduction of this technology have not been reached and, in the meantime, new technologies for these tests are being developed by Tecan and reagent suppliers.
Tecan (www.tecan.com) is a leading global player in the Life Sciences supply industry specializing in the development, production, and distribution of advanced automation solutions enabling drug discovery, genomics, proteomics and diagnostics. Through its REMP subsidiary (www.remp.com), Tecan is the leading supplier of compound and sample storage, management and logistics solutions. Tecan clients are pharmaceutical and biotechnology companies, university research departments and diagnostic laboratories. Founded in Switzerland in 1980, the company has manufacturing, research and development sites in both North America and Europe and maintains a sales and service network in 52 countries. In 2004, Tecan achieved sales of CHF 286.0 million (USD 230.6 million; EUR 185.7 million) and REMP achieved sales of CHF 36.4 million. Registered shares of Tecan Group are traded on the SWX Swiss Exchange (TK: TECN / Reuters: TECZn.S / Valor: 1210019).
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