InforMax has seen its share of worries in the slumping market. With a new CEO at the wheel, the company is hoping for a new lease on life — and Andrew Whiteley is doing enough of an overhaul that it just might work.
Late this spring, Whiteley offered the first hints about his strategic plan for the company as it battles to remain competitive in the rocky bioinformatics market. Topmost among his plans is a change of focus away from the company’s GenoMax enterprise product in favor of a new, broader suite of desktop applications. Whiteley says the fault lies not in GenoMax itself, but in the lower-than-anticipated market demand for enterprise software in the life sciences.
“We see the value being in the vertical, in the applications that are in the hands of the users, not in the back-end infrastructure,” he says. InforMax is ramping up its product development efforts to address the opportunities it sees in the market’s niche areas of gene expression, functional genomics, and systems biology. Whiteley expects to launch the first of a full suite of new applications by the end of the year.
The company estimates its 2002 annual revenue will reach $20 million, and with no GenoMax sales in the first quarter at all, it will have to fall back on other sources of cash. Meantime, InforMax could be in a risky situation for an acquisition, says a former employee speaking on the condition of anonymity: “Clearly the stock is at or near its all-time low. Clearly the market capitalization of the company is well below the cash they have in the bank. As a general rule, that makes companies takeover targets.” The $56 million in the company’s coffers this spring is expected to fall to $40 million by the end of the year.
The reduced staff could also be a factor. The decrease in staff from 262 to 219 that took place over the course of the first quarter was followed by May layoffs, leaving the staff at 189.
The former employee interprets Whiteley’s strategy as an attempt to fit better in the industry. “Reality is setting in, and they’re realizing that there really isn’t a place for a billion-dollar bioinformatics software company.” That doesn’t mean, though, that InforMax’s glory days have come and gone. “They are not knocking on death’s door or anything like that. … They’re not going to be falling apart. It’s not a DoubleTwist.”
— Meredith Salisbury and Bernadette Toner