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Monday, Jun 17, 2024

Diagnostics, Testing Cos. Again Report Employee Decline

See 5.7% Drop To 4,060 Workers

Orange County’s hub of diagnostics and testing firms saw employment drop for the second straight year as they restructured and their clients dealt with bouts of COVID-19 resurgence that limited testing.

The local diagnostics and testing sector—a collection of test makers and laboratories for infectious diseases and various cancers, specialized equipment manufacturers, and testing product suppliers—fell 5.7% to 4,060 employees, according to this week’s Business Journal list, which includes 15 companies. Last year’s list showed a 2.6% decline. The 2021 list showed a 8% increase.

Four companies on this year’s list—which ranks companies by their local employee count—reported year-over-year declines in local employees, three posted increases, and the rest are Business Journal estimates.

A notable increase was No. 7 Fluxergy Inc. of Irvine, which boosted employment 11% to 105.

The company, which is developing a system for testing at point of care, has raised $80 million, including $50 million from John Tu, the billionaire co-founder of Fountain Valley memory product giant Kingston Technology Corp., the second-largest private company based in Orange County. Fluxergy has expanded its Irvine operations from a 5,000-square-foot office to several buildings totaling 90,000 square feet.

The Irvine facility is currently capable of manufacturing 100,000 testing cartridges a month, with a goal of 1 million, co-founder and Chief Executive Tej Patel said.

“Manufacturing is a core part of what we do,” Patel told the Business Journal in an October article. “There are definitely difficulties to manufacturing in California, but one of the great things with the methodology that we’ve developed and our approach to manufacturing is we can be cost efficient.”


Notable declines were at the top of the list. Brea’s Beckman Coulter Diagnostics, No. 2 on the list, reported a 6.2% drop to 685. That drop follows a 12% decline on last year’s list.

Beckman Coulter President Julie Sawyer Montgomery has previously attributed the decline to many of its employees shifting to working at home, thus causing a decline at its Brea offices.

“Healthcare systems worldwide are performing more tests than any time in history,” she told the Business Journal last week. “Artificial intelligence and lab automation are advancing testing quality and clinical insights, enabling patients to be better informed about their own wellbeing. I am incredibly proud of our Beckman Coulter Diagnostics team as we continue to elevate the role of diagnostics in improving patient health.”

Aliso Viejo’s Ambry Genetics Corp. reported its headcount fell 20% to 384.

“While it was an incredibly hard decision, we did reduce our workforce earlier in the year in select areas so we can focus on our priorities and improve productivity across the organization,” an Ambry spokesman told the Business Journal. “We continue to hire for positions that align with our clients’ needs and growth goals.”

For more on Ambry, which analyzes RNA tests for cancer, see story, page 18.

Wall Street Problems

A couple of smaller companies on the list didn’t find favor with Wall Street in the past year.
Lung cancer drug test developer Oncocyte Corp. (NYSE: OCX), which moved to OC from the Bay Area city of Alameda about three years ago, in December announced a restructuring that resulted in laying off about 40% of its staff; it now has 57 workers at its Irvine office.

Ronnie Andrews stepped down as chief executive and a board director and was replaced on interim basis by General Manager Joshua Riggs. It also eliminated the positions of president, chief operating officer and chief scientific officer.

It reported revenue for the first nine months of 2022 rose 8.9% to $4.5 million while its loss from operations narrowed to $27.7 million.

Oncocyte shares have fallen about 77% in the past year to 39 cents and a $47 million market cap.

MDxHealth SA (Nasdaq: MDXH), an Irvine and Belgium-based developer of prostate cancer diagnostics, saw its shares fall 42% at the beginning of this month when it announced a $40 million offering of Americans Depositary Shares (ADS). MDxHealth said the proceeds would go toward general corporate and working capital purposes, including to fund product development efforts and commercial activities.

The shares have fallen from a 52-week high of $10.95 last May to $3.81 and a $106 million market cap at press time.

MDxHealth is projecting great growth this year, saying it expects 2023 revenue of $65 million to $70 million, which implies a 76% to 89% increase this year.

Agendia Inc., an Irvine-based provider of genomic breast cancer tests, still hasn’t gone public after it filed plans in 2021 to raise $75 million. It reduced its headcount at its Irvine office 43% to 110.

Agendia, incorporated in 2003 in the Netherlands but based in Irvine, says it’s the only molecular diagnostics company focused solely on developing tests for breast cancer, the leading cause of cancer death in women around the world.

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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