Genex Corp., a 14-year-old Gaithersburg biotechnology firm that has fallen on hard times, yesterday put itself up for sale.
Genex, which recently said it would lay off more than half of its 65 employees to save money, announced that it had hired Allen & Co., New York investment bankers, to explore the company's sale or merger.
Genex's decision to find a buyer reflects the consolidation taking place in the biotech industry, where high expectations for genetically engineered products have turned into disappointments at many firms.
Among the key projects at Genex are those involving single-chain antigen-binding proteins, known as SCA, which may be useful in attacking human cancer cells. The firm also has developed genetically engineered adhesives that may eventually be used in place of sutures in surgery.
Genex, once a Wall Street favorite, encountered a series of product setbacks and financial losses in recent years that have made it difficult for the company to raise additional funds.
Genex President Reed Prior said, "Against the backdrop of a very tough financial environment, we have so far been unable to meet our financing needs. We have thus concluded that the retention by the company of an investment banking firm to help us actively pursue a possible sale of the company, as well as financial alternatives, is in the best interests of our shareholders at this time."
After a promising beginning in 1977, Genex suffered a major blow when the company lost a contract to produce a genetically engineered version of the artificial sweetener aspartame.
In 1989, Genex revenue moved up to $5 million, but the company lost $6.3 million. The losses have continued. In the first nine months of 1990, Genex lost $4.5 million.
Genex shares, which traded for as much as $23.25 in the firm's early years, were selling for 9 cents a share yesterday.
Genex said that it recently sold its bioseparations division, which manufactures devices and proteins used to separate liquids in laboratory work. The devices went to Whatman Inc. of New Jersey for $400,000. The protein section is expected to go to Pharmacia LKB Biotechnology AB, a Swedish firm, for $2.25 million.