U.K. decision to close operations at Forensic Science Service could contribute to Orchid Cellmark's growth

Orchid Cellmark Inc. (Nasdaq:ORCH), a leading international provider of identity DNA testing services, said today the decision by the United Kingdom government to wind-down operations at the Forensic Science Service (FSS) could contribute to Orchid Cellmark's ongoing growth.

The FSS, formerly part of the U.K. Home Office and once the sole provider of services to U.K. Police forces, became a GovCo in 2005, a non-public company solely owned by the government. The FSS currently holds the largest share of the U.K. forensic testing market. However, despite its quality work and its development of the U.K. National DNA Database, according to a ministerial statement to parliament, losses of £2 million per month and loss of market share to commercial rivals, including Orchid Cellmark, are key reasons for the government's decision to have "no continuing state interest in a forensics provider" by March 2012.

"We believe this development could have a significant impact on our U.K. forensics business," said Thomas A. Bologna, president and chief executive officer of Orchid Cellmark. "The operational and staffing decisions we have been making in the U.K. have delivered increased capacity for the provision of high quality forensic services to meet the changing requirements of U.K. police forces."

In making the announcement, the U.K. government also stated its desire that the U.K. forensic science industry operate as a genuine market, with the expectation that police will deal with serious crimes quicker and more efficiently by using services from a more competitive private sector market.