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Lion Q2 Revenues up 136%, Losses Widen Sharply

NEW YORK, Nov 8 - Lion Bioscience on Wednesday reported a 136 percent increase in revenues in the second quarter of fiscal 2001 to 4.5 million euros ($3.84 million), compared with 1.9 million euros in the year ago period.

The company said that revenues for the first half of the year were up 177 percent to 7.8 million euros from 2.2 million euros a year.

Except for first quarter revenues, Lion of Heidelberg, Germany reported its earnings on a half-year basis. Under US Securities and Exchange Commission rules, European companies are permitted to report earnings on a six-month basis, a Lion representative said.

The company attributed the spike in revenues to soaring sales of its informatics tools and services. The informatics business posted sales of 6.6 million euros in the first half of the year, compared with 1.4 million euros a year ago.

Lion said that revenues from its iD 3 business fell to 1.2 million euros from 1.5 million euros as the company shifted away from fee-for-service projects in order to focus on drug discovery.

Lion posted an operating loss of 19 million euros, compared with an operating loss of 6.4 million euros a year ago. The loss stemmed in part from higher costs and expenses, which nearly tripled to 26.8 million euros, from 9.2 million euros a year ago.

The higher expenses included 8.7 million euros in non-cash compensation charges that resulted from the conversion of preferred shares to ordinary shares. Compensation for stock options resulted in an additional expense of 800,000 euros.

Research and development expenses increased 88 percent to 12.6 million euros from 6.7 million euros a year ago.

And selling, general, and administrative expenses more than doubled to 5.5 million euros, from 2.5 million euros for first half fiscal year 2000. The company hired 76 new employees in the first six months of the year, raising the number of employees to 279 at the end of the second quarter.

The company posted net losses of 18.1 million euros, or 1.48 euros a share, in the first half of the year, compared with 6.5 million euros, or 1.13 euros a share, a year ago. 

The company had 206.9 million euros in cash and cash equivalents at the end of the second quarter as a result of its August IPO which raised 210 million euros.

During the quarter, Bayer announced an additional $25 million investment into a collaboration between Lion and Tripos. Lion also signed a deal with Nestle, marking the company’s move into the food sector.

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