In the latest sign of distress at Marrone Bio Innovations Inc., the Davis biotech firm announced Wednesday it’s laying off 23 percent of its staff as it struggles with slumping revenue and a shareholder revolt.
Marrone Bio said it’s streamlining operations with an emphasis “on reducing operating expenses and conserving cash.”
Founder and Chief Executive Pam Marrone wouldn’t say how many employees were being let go. But it could be several dozen; the company employed 154 workers as of March 31, according to a Securities and Exchange Commission filing from this summer.
Barely a year ago, Marrone Bio was the toast of the greater Sacramento tech sector. It had a successful initial public stock offering in August 2013, raising $57 million; it was the first IPO in greater Sacramento in seven years. Although it was consistently unprofitable, typical for a young company, Marrone Bio was ramping up sales of its eco-friendly farm pesticides and bringing promising new products to market.
The good news came to a halt two months ago. Marrone Bio surprised investors by reporting a 20 percent drop in second-quarter revenue. Then, in early September, the company revealed it had begun an in-house investigation of its financial results after discovering documents “calling into question” the reporting of $870,000 worth of revenue during the fourth quarter of 2013. Total revenue for that quarter was reported at just under $6 million.
The one-two punch sent Marrone Bio stock sinking from more than $9 a share in early August to just above $3 after the investigation was disclosed. Several class-action lawsuits have been filed on behalf of shareholders, accusing the company of making “false and misleading” statements to investors.
Shares of Marrone Bio closed Wednesday at $2.39, down 10 cents, on the Nasdaq market. The layoffs were announced after the market closed.
In its announcement, the 8-year-old company also said it will tighten its developmental focus to emphasize products “that are expected to have the greatest near-term growth potential.”
“We have a plethora of riches in terms of (new product) pipeline,” said Pam Marrone in an interiew. “We looked and said, ‘We can’t do it all.’ ”
The other products still under development won’t be ignored, but “we’ll seek partners to help defray the costs,” she said. Marrone said this shift has previously been disclosed to investors.
The cutbacks in staffing, besides reflecting the drop in revenue, also “address the recent departures of its COO and several of its sales staff,” the company said. Marrone Bio’s chief operating officer, Hector Absi, resigned in August.