Kiwi tech firm slashes staff in restructure
Top executives at ASX-listed Adherium among those let go in reset of business
ANew Zealand med-tech firm has slashed its staff numbers in a major structural reset of the business. Adherium, founded by Kiwi Garth Sutherland in 2001, posted a notice to the Australian Stock Exchange late last year confirming that the restructure would involve a significant contraction in the workforce across the United States and New Zealand.
The company, which develops connected medical devices that allow asthma patients to monitor usage, also has an office in Australia.
Among those leaving the company are group CEO Arik Anderson and CFO David Allinson.
Rob Turnbull, the company’s former vice president of finance and business services, has been appointed general manager and will oversee the reorganisation of the business.
Asked to respond to suggestions from a source that the company’s staff would be contracting by 80 per cent, Turnbull would not get into specifics.
“While the reduction in workforce is very regrettable, our focus remains to develop the company as has originally been planned,” he told the Herald.
“In meeting our customers’ commercial requirements, we will continue to develop leading solutions in our space, and in this our R&D activity will continue to be run from our Auckland office.”
Asked further questions on the number of job cuts and what the changes mean, Turnbull said he would only be able to discuss plans for the business in February.
Since listing on the Australian Stock Exchange in 2015, Adherium has struggled to impress the market.
The company launched its initial public offering at 50 Australian cents per share in August 2015, and the share price climbed to an all-time high of 70 cents by October 2015.
However, it was downhill from there, with the share price steadily sliding to its current value of 3 cents.
At the time of writing, the company’s overall market capitalisation had sunk to A$5.75 million ($6.1m).
Over the years, the Adherium attracted significant interest from investors, banking on the business eventually becoming profitable.
By the time it listed on the sharemarket, it already had A$25.85m in committed funds, including a cornerstone investment of US$3m ($4.45m) from its client Astra Zeneca.
In the middle of 2016, the company was still able to attract investor interest, raising US$5.9m from investment fund Fidelity, which acquired a 10 per cent stake in the company.
Locally, Adherium has also received backing from Callaghan innovation.
In the 2012-2013 year, Callaghan awarded a $207,000 grant to the company as well as a growth grant running from 2014 to 2019.
Through a growth grant, businesses are able to claim back 20 per cent of what they spend on R&D in NZ, up to $5m per year.
Callaghan Innovation wouldn’t provide specific details on how much it had provided to Adherium between 2014 and 2019, saying that this information is commercially sensitive.
Adherium’s financial statements show that the company received A$503,000 in grant income for the year ended 30 June 2018. The company’s financial report does not specify whether all this funding came from Callaghan.
Earlier reports do, however, show that the company received A$409,000 from Callaghan in 2017, up from A$290,000 in 2016.
At this stage, it is unclear whether Adherium will have continued access to funds from Callaghan for its research and development programme, which, according to Turnbull, will stay in Auckland.
A spokesperson from Callaghan said that is because research and development growth grants are currently being phased out for the introduction of the new R&D Tax Incentive, the government body is currently working through the process with all current customers.
Despite the funding and investor interest, Adherium has not yet been able to turn a profit, making a loss of A$9.95m in 2018, following on from its loss of A$12.79m in 2017.