AorTech International, a maker of heart valves and monitors, is to dispose of its two main businesses after a string of technological and business disasters.
The one-time biotech star said yesterday it will slash staffing levels and focus on its one last attractive technology, developing novel plastics that can be used to replace tissues inside the human body.
Bill Strachan, who was brought in as chief executive after a boardroom clearout last July, said the change in direction was needed because sales of Truccoms, a device to monitor heart rates during surgery, had been held back by technical glitches.
In November he had proclaimed the technology "one of AorTech's value propositions", but yesterday Mr Strachan said the company was reluctantly ending development and marketing spending and would instead try to sell the business.
"We became more and more disappointed by the revenue streams, and by the amounts needed to promote it, develop it and understand it," he said. "If we are honest the product is at a development stage rather than being a ready-made offering to anaesthetists and we put it on the market too soon. We could not keep pouring good money after bad."
The company is also selling its loss-making business manufacturing artificial heart valves, which has failed to take more than 1 per cent of the market. It is in advanced talks with a bidder. Mr Strachan said the company would be making head office job cuts and would begin consultation on where the redundancies would fall. The company is keen to reduce the rate at which it is burning through its cash pile, currently estimated at £7m.
AorTech shares were worth more than 1,000p each at the peak of the technology and biotech bubbles in 2000, but were yesterday down 0.25p to 8.25p. The company is now worth little more than £3m, and moved down to the junior AIM stock market at the end of 2002.