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Despite Declining Quarterly Revenues, Lion s Bioinformatics Business Hits Profitability

NEW YORK, Nov. 3 (GenomeWeb News) - Lion Bioscience reported a 42-percent year-over-year decline in revenues for its second fiscal quarter today, but the company's bioinformatics business -- which is in the process of being sold to an undisclosed buyer -- posted a profit for the first time in Lion's history.

 

Lion's total revenues for the quarter ended Sept. 30 fell to €1.5 million ($1.8 million), from €2.6 million ($3.1 million) in the prior-year period. All of the revenues reported for the second quarter of 2005 came from the bioinformatics business, which the company has listed under discontinued operations. In the year-ago period, €2.5 million came from the bioinformatics business and €100,000 came from Lion's continuing operations, which the company intends to maintain as a holding company following the sale of the bioinformatics business.

 

Lion's total net loss narrowed to €105,000 in the second quarter from €3.44 million in the comparable period of 2004. The discontinued bioinformatics business posted a profit of €227,000, compared to a loss of €2.88 million in the same period of last fiscal year, while the net loss for Lion's continuing operations was €300,000 compared to €600,000 in the prior-year period.

 

Lion said in a statement that its overall net loss resulted primarily "from the ongoing sales process of the bioinformatics business and from legal and consulting fees."

 

This process, which the company originally expected to close by September, "occupies almost the whole management capacity, [and] is proceeding in a very promising manner," Lion said in a statement.

 

"We would be happy if we were able to achieve a faster conclusion to this process, but for us a good result is as important as the time factor", said Peter Willinger, Lion's CFO.

 

Lion's discontinued bioinformatics business spent €631,000 on R&D for the second quarter, down from €1.4 million in the prior-year period.

 

Lion held €8.8 million in cash and cash equivalents as of Sept. 30, and €23.6 million in cash, cash equivalents, and marketable securities.

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