This article has been updated to include comments from Lion's CEO.
NEW YORK, June 5 - Lion Bioscience today reported ballooning fourth-quarter net loss as a doubling in R&D overpowered modest revenue growth.
In addition, Lion, signaling a change in business strategy, said it may sell off its drug-discovery unit in an effort to reign in net loss and reach profitability.
Total revenue in the quarter ended March 31 increased to €11 million, or roughly $10.3 million, from €7.8 million in the year-ago period, Lion said.
Research and development expenses in the fourth quarter 2002 nearly doubled to €16 million from €8.8 million year over year. As a result, net loss for the quarter swelled to €23.4 million, or €1.22 per share, from €3.5 million, or €.19 per share, one year ago, the company added.
Lion said it had €19.2 million cash and cash equivalents as of March 31. Von Bohlen stressed that Lion has no plans as of today to lay off staff. Furthermore, future R&D spending for iD3 is unclear and hinges on whether the company gets an investor or partner to support the program. R&D spending for its IT program should remain unchanged.
The German bioinformatics company indicated it is actively looking for a partner or investor for its drug-discovery unit, and may even sell the business outright in a move to improve profitability. The firm said it plans to concentrate less on its iD3 platform and instead focus on its core IT business.
Lion CEO Friedrich von Bohlen said at a news conference in Heidelberg that the company is in talks to find a solution for the drug-discovery business and wants to reach an agreement by the end of the year.
In an interview this morning with BioInform, GenomeWeb's sister publication, von Bohlen said: "We actually have decided-this was prepared over the past six months--to focus the company's activities on the information-management and the IT side, period. Having said that, the logical decision is to find ... a strategic partner for our in-house drug discovery.
"We have achieved our goals in that program so far," he added.
Von Bohlen said his company had the choice either to "go on with that program [iD3] and further finance it" by itself or to "focus on where we think we are really unique"--which von Bohlen said is in the information-management business.
The CEO stressed that though he chose the latter option he hopes to find a partner or investor before the end of the year. But he added that his decision to slide drug discovery to the back burner "is a bold step." Lion is "one of the few companies who have the option at this time not to become a drug-discovery company," he said.
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BioInform editor Bernadette Toner contributed to this report.