Applied DNA abandons DNA authentication business

After years of effort with little reward, Applied DNA Sciences has finally called time on its DNA tagging and security services business as part of a restructuring plan that has also cut around 20 per cent of its workforce.

The company said in December it was looking into potentially divesting the DNA tagging unit, which was set up nearly two decades ago to develop anti-counterfeiting and anti-diversion technology based on unique botanical DNA-based markers which can provide real-time, portable and forensic authentication when added to products.

Sales of the CertainT range were volatile and never really took off – despite strenuous business development efforts across sectors like pharma, electronics, and textiles – and in 2020 diversified the company's focus to include other areas such as supplying linear DNA and RNA for use in biotherapeutic drugs and diagnostic development.

One obstacle facing the technology platform was that it required the use of dedicated readers, putting it at a disadvantage compared to other tagging approaches that can use cameras or sensors found on everyday smartphones and similar devices.

In an update, Applied DNA said that the 20 per cent cut in headcount "related primarily to employees within its DNA tagging segment" and would result in a 13 per cent reduction in annual payroll offset by around $300,000 in severance costs.

Its main business is now operating as a contract development and manufacturing organisation (CDMO) under the LineaRx banner and providing genetic testing through its MDx Testing Services subsidiary. The latter business may also be sold, according to Applied DNA's fiscal 2024 annual report.

In the first quarter of the current fiscal year that ended December 31, Applied DNA reported a $3 million loss on revenues up 34% to $1.2 million, with cash reserves of just over $9 million.

Chief executive Dr James Hayward (pictured top) said the company was taking "difficult but necessary steps to optimise our corporate structure to lower our cash burn rate and stabilise our financial position to ensure our ability to execute against near-term operational goals."

He added: "As we move through fiscal 2025, we are focused on commercialising the DNA production capacity of our recently certified GMP Site 1 facility."