Procognia Ltd., a UK-based start-up developing biological arrays for drug development, fired eight of its 31 Israeli employees a month ago.
Procognia CEO Ron Long said yesterday, “The firings aren’t a dark secret. We completed core technological development of the company’s products. We can now market two or three new products a year, based on a team of half a dozen development staff. It’s always possible to find more R&D work that’s nice to work on, but as a company managed by venture capital funds, we can’t keep a team that’s no longer essential. We initiated sales, and our goal at the moment is to reach the operating break-even point ahead of a future exit. I can say with pride that activities in Israel are very close to breaking even. We had our first sales in 2005, achieving $500,000. We expect to double that figure this year.”
“Globes”: Does your emphasis on breaking even mean that you’re close to an exit?
Long: “We have no clear plans, but I believe that we’ll formulate one over the coming year. The venture capital funds prefer a sale, because they want to see money in hand right away. Management prefers going public, because we’ll then manage a larger business. But in the end, we’ll naturally do what the shareholders want.”
You’ve laid off development staff now, but will you need to hire people in other fields?
“We have no hiring plans for the near future. We’ve moved some our of production activity to Israel, but in our business you don’t need many production workers. In retrospect, I’d be happy if we hadn’t hired our current production and sales employees so quickly because we launched sales later than planned, but that’s how it is with a start-up. Obviously, if the business skyrockets, we’ll have to hire more people.”
Published by Globes [online], Israel business news - www.globes.co.il - on April 24, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006