Cygnus, Inc. was a

biotechnology Biotechnology is a multidisciplinary field that involves the integration of natural sciences and Engineering Science, engineering sciences in order to achieve the application of organisms and parts thereof for products and services. Specialists ...

company that dissolved in 2007. At its inception in 1985, Cygnus was engaged in development and manufacturing of

transdermal Transdermal is a route of administration wherein active ingredients are delivered across the skin for systemic distribution. Examples include transdermal patches used for medicine delivery. The drug is administered in the form of a patch or ointm ...

drug delivery systems, including products for

contraception Birth control, also known as contraception, anticonception, and fertility control, is the use of methods or devices to prevent pregnancy. Birth control has been used since ancient times, but effective and safe methods of birth control only be ...

hormone therapy Hormone therapy or hormonal therapy is the use of hormones in medical treatment. Treatment with hormone antagonists may also be referred to as hormonal therapy or antihormone therapy. The most general classes of hormone therapy are hormonal therap ...

and

smoking cessation Smoking cessation, usually called quitting smoking or stopping smoking, is the process of discontinuing tobacco smoking. Tobacco smoke contains nicotine, which is Addiction, addictive and can cause Substance dependence, dependence. As a resu ...

. The company also developed the GlucoWatch, a non-invasive

glucose Glucose is a sugar with the Chemical formula#Molecular formula, molecular formula , which is often abbreviated as Glc. It is overall the most abundant monosaccharide, a subcategory of carbohydrates. It is mainly made by plants and most algae d ...

monitoring devices for manufacture and commercialization. When GlucoWatch was launched in early 2002, the product sales of GlucoWatch were much lower than expected. According to the Company, the reasons for failure included adoption barriers for new technology, need for a

paradigm shift A paradigm shift is a fundamental change in the basic concepts and experimental practices of a scientific discipline. It is a concept in the philosophy of science that was introduced and brought into the common lexicon by the American physicist a ...

in the management of diabetes, lack of widespread medical reimbursement, and performance characteristics of the device.

History

First, the GlucoWatch faced difficulties in its clinical efficacy and reproducibility of measurements. Cygnus did not resolve these technical feasibility issues and was unable to replace the standard glucose monitoring device that was on the market. Second, Cygnus lacked an effective managed care resources group. Without a substantial

reimbursement Reimbursement is the act of compensating someone for an out-of-pocket expense by giving them an amount of money equal to what was spent. Companies, governments and nonprofit organizations may compensate their employees or officers for necessary ...

level, it is very difficult for healthcare organizations to approve the GlucoWatch for its

beneficiaries A beneficiary in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. For example, the beneficiary of a life insurance policy is the person who receives the payment of the amount of ...

at the price that Cygnus was selling it. Furthermore, Cygnus failed to show the cost benefits of the device. Third, Cygnus entered into a problematic co-promotion agreement with Sankyo Pharmaceuticals in 2000 that ended unexpectedly. Glucose monitoring products that are new to the market require a sizeable sales force to educate

healthcare professionals A health professional, healthcare professional (HCP), or healthcare worker (sometimes abbreviated as HCW) is a provider of health care treatment and advice based on formal training and experience. The field includes those who work as a nurse, physi ...

and end user, and to create product awareness in various marketing channels. After Sankyo left the agreement, Cygnus was very low on cash and reduced the work force by 60%. Cygnus did not have enough resources or

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and pri ...

to perform sales and marketing activities on its own. In October 2002, the Company failed to meet the minimum price per share and minimum

market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

listing requirements of the

Nasdaq The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...

National Market and National Small Cap Market. As a result, its stock was delisted from NASDAQ and transferred to OTC bulletin board. Manufacturing activities and R&D efforts for future products were suspended. Due to Cygnus’ weak financial condition, operating losses, and lack of a marketing partner, the company's board of directors decided to sell off substantial operating assets, wind-up operations and subsequently dissolve and

liquidate Liquidation is the process in accounting by which a company is brought to an end. The assets and property of the business are redistributed. When a firm has been liquidated, it is sometimes referred to as wound-up or dissolved, although di ...

. In December 2004, Cygnus Inc. entered into an asset purchase agreement with Animas Corporation and Animas Technologies LLC in exchange for $10 million

USD The United States dollar (symbol: $; currency code: USD) is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it int ...

in cash. The asset sale was completed in March 2005. The Company retained some cash and equivalents, and accounts receivables but no operating assets and no means to generate revenue, other than pending

arbitration Arbitration is a formal method of dispute resolution involving a third party neutral who makes a binding decision. The third party neutral (the 'arbitrator', 'arbiter' or 'arbitral tribunal') renders the decision in the form of an 'arbitrati ...

with

Ortho-McNeil Pharmaceutical Ortho-McNeil Pharmaceutical (now operating under Janssen Pharmaceuticals) was a pharmaceutical company based in Raritan, New Jersey, that was formed from the merger of Ortho Pharmaceutical and McNeil Pharmaceutical in 1993. These pharmaceutical co ...

Inc. The headquarters lease terminated and Cygnus moved to a single office in

San Francisco San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...

. The arbitration with Ortho-McNeil was settled in September 2005. Ortho-McNeil paid $4 million USD in cash to Cygnus. The company had planned to wait till this settlement to file its certificate of dissolution. In November 2005, the Company filed 10Q indicating intention to file Certification of Dissolution. As a result, trading of Company’s common stock on OTC Bulletin Board stopped. The close of business was on November 21, 2005. Cygnus had never been profitable in its 17 years of history.

References

{{Authority control Technology companies established in 1985 Companies based in Redwood City, California 1985 establishments in California