The review started in mid-April after BioProgress, which specialises in using its XGEL cellulose films for drug delivery, discovered that trading levels at its BioTec Films subsidiary in Tampa, Florida, were not going to reach levels indicated in previous announcements, while overheads were also higher than expected.
The verdict? BioProgress has deals in place which are not serving it well at this stage in the company's development - although clearly it could not go into too much detail here - while other financial arrangements have also imparted a degree of risk a little earlier than advisable.
"The company's partnership arrangements have not in all cases been aligned to the development of BioProgress' technology base or of enabling the earliest possible commercialisation of its XGEL solutions," according to the review statement.
The solution? BioProgress says it will cut costs and refocus its business, as might be expected. The company's shares dipped around 8 per cent on the announcement, but this may have been more to do with a lack of detail in the review making investors jittery, rather than a negative reaction to the plans.
An issue that has bothered some investors is the timing of the purchase of the Tampa facility to make its cellulose films, which was seen as a way of building up a source of film for eventual customers for BioProgress' encapsulation and coating machines.
While this was making money it was not a problem, but the downturn in trading levels has now exposed BioProgress' finances, lending weight to the arguments of those who said the firm was premature in taking on this level of risk before it had signed up big pharma customers for its dosage forms.
In the statement, BioProgress notes that remedial action is already underway at Tampa and elsewhere in the company, with structural and operational changes in hand 'to ensure a tight control on costs as well as drive efficiencies'.
"BioTec Films is expected to assist in the continued development of the company's products in commercialisation but not to be the profit centre of the business," it said.
There will also be a refocusing of efforts in R&D on its more advanced projects and mothballing - for the time being - development and earlier stage projects, said the firm's management team, headed since the end of April by acting CEO Richard Trevillion.
BioProgress stressed that it continues to have a strong balance sheet and cash position.