UPDATE 1-Helicos BioSciences cuts half of workforce

Mon May 17, 2010 5:50pm EDT

* Says cut about 40 positions in Q4

* To shift focus to diagnostics business

* Says 50 pct of remaining workforce on NIH funding

* Says to continue to support current installed base

* Shrs up 11 pct after market

May 17 (Reuters) - Helicos BioSciences Corp HLCS.O said it cut half its total workforce to save on operating costs as the life-sciences company shifts focus to its diagnostics business as part of a restructuring plan.

Helicos said half of the remaining 40 employees are supported by National Institutes of Health funding on research designed to further improve its proprietary DNA and RNA single molecule sequencing technology.

The company, which focuses on genetic analysis technologies, had said in September last year failure to raise capital would have a material adverse impact on its ability to continue as a going concern.

Helicos, which would shift a significant portion of its resources towards development of diagnostics strategy, said it would continue to support its current installed base with collaborative activities, reagent supply and service support.

Shares of the company were up 11 percent at $0.62 in after-market trade. They closed at $0.56 Monday on Nasdaq. (Reporting by Shobhana Chadha in Bangalore; Editing by Unnikrishnan Nair)

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