CombiMatrix announces operational restructuring plan

CombiMatrix Corporation (Nasdaq:CBMX) announced today that it is implementing a restructuring plan to significantly reduce operating costs, increase the focus on the Company's diagnostic services business and transition senior management. After the restructuring, CombiMatrix will be focused on its diagnostics services business, including increasing utilization of its existing tests, expanding the test menu, increasing the number of customers and partners, and improving reimbursement for its testing services. Management and operations at CombiMatrix's diagnostic laboratory in Irvine, CA will not be affected by this restructuring. Specific components of the plan and additional details will be presented at the company's second quarter earnings call scheduled for May 11, 2010, if not sooner.

"CombiMatrix is at a major inflection point in its development," stated Dr. Amit Kumar, President and CEO of CombiMatrix Corporation. "We have developed and launched a number of valuable diagnostic testing services, and we believe the best use of shareholder capital is to focus on selling and increasing the utilization of those tests. In light of the tremendous opportunities we see in the diagnostics arena, management and the Board have decided to develop and implement a strategic plan which we believe will enable us to make the most effective use of our capital and provide the most probable path to cash flow positive operations. We believe that this plan provides us an opportunity to create the most value for the Company's shareholders. We anticipate that the restructuring will result in a reduction of our operating cash burn of between 40-60% relative to our 2009 cash burn of $10.6 million, after taking into account one-time costs. The company will report a cash balance of $13.5 million as of the end of the first quarter of 2010. As a component of this plan, the Company will initiate a search for a new President and Chief Executive Officer, which we hope will be completed by the end of the second quarter, at which time I intend to step down as CEO, but remain active with the company in an advisory role at the request of the Board," concluded Dr. Kumar. 

Tom Akin, Chairman of the Board, stated, "We thank Dr. Kumar for leading the company to this point in its development, and wish him well in his next endeavor. We all agree that this is the right time to make this transition for the benefit of our shareholders, as Dr. Kumar led the company through its development and technology focused period. Now that we are transitioning to more commercial activities, we feel that the company would benefit from an experienced commercially oriented leader that is focused on diagnostic testing services and building the laboratory business. We have a growing diagnostics business, cash on the balance sheet, and a pathway to cash flow positive operations.  Dr. Kumar and the Board will work together to identify the right candidate to lead the company in its next stage of development," concluded Mr. Akin.