SignalGene Inc. said its board of directors approved a plan to cease all operations, dissolve itself and sell off assets to optimize shareholder returns.

The news dropped SignalGene's already troubled stock (TSX:SGI) C6 cents, or 68.8 percent, to close at C2.5 cents. The stock was heavily traded at about 6.5 million shares. It has about 121.9 million shares outstanding.

In this case, said George Masters, the company's chairman, interim president and CEO, it's about the investors.

"Having examined all available options to maximize shareholders value, including merger and acquisition opportunities, the board of directors has decided that shareholders will be best served through the sale of SignalGene assets," he said in a prepared release.

The company shutdown involves the sale of its computer-aided drug design technology and its angiogenesis inhibitors drug discovery program, as well as other assets. The company said it is eliminating 31 positions between its headquarters in Montreal and its unit in Guelph, Ontario. Most of the cuts went into effect Wednesday.

SignalGene stressed that it continues to believe in its technology and its angiogenesis inhibitors, but doubted its ability to "create value for shareholders" when it is burdened with "limited financial resources and the uncertain prospect of raising additional capital in the current environment."

SignalGene's drug discovery platform combines computer-aided drug design with genomics. It has research programs focused on the steroid hormone-signaling pathway, including breast cancer, osteoporosis and obesity. It also has a drug discovery program aimed at developing angiogenesis inhibitors for use against cancers, as well as arthritis, diabetic retinopathy, psoriasis and endometriosis.

The company was incorporated in 1991 under the name Algène Biotechnologies to study the genetic causes of Alzheimer's disease. It went public on the Toronto Stock Exchange in 1996. In 1999, it restructured its business, changed its management and took on the name SignalGene. Through its history, it acquired GeneScape Inc. and Nanodesign Inc.

In September, it spun off Alethia BioTherapeutics Inc. - as part of an agreement reached with Genome Quebec - to develop molecular targets, compounds and biotherapeutic approaches to treat disorders that affect women. Genome Quebec said at the time it would contribute C$6.1 million (US$3.9 million) over three years to fund Alethia's operation. (See BioWorld Today, Sept. 6, 2002.)

SignalGene also released its financial figures for the fourth quarter. It lost C$15.7 million in the quarter, or C13 cents per share. Its loss for the year was C$24.5 million, up from C$12.9 million in 2001.

It posted revenue for the fourth quarter of C$45,000, but that amount was entirely due to interest from the company's investments. For the year, it generated C$878,000 in revenue, C$626,000 of which was from research contracts. The company closed 2002 with C$7.1 million in cash, cash equivalents and temporary investments.