NEW YORK, Sept. 6 - Almost three months to the day after it said it wanted to sell off its iD3 drug-discovery business and focus more on core IT, Lion Bioscience has opted to shut down the unit altogether.
Lion today said it has decided to dissolve the unit and shutter its facilities in Heidelberg and San Diego by the end of the year. The move, which caps a fruitless search for someone to buy the unit, will save the company up to $20 million per year and cost 86 full-time employees their jobs. A company spokeswoman said 45 employees in Heidelberg and 41 staffers in San Diego will be let go.
The spokeswoman, Tracy Coffey, said the company plans to close the lab space in its leased San Diego facility--its current US base--and move into smaller digs to accommodate the truncated staff, which now includes only administrative and IT people. She said the company has not yet found a suitable place, and has yet settled on a timetable for a move.
Lion will also shutter the part of its Heidelberg den that houses the iD3 unit. The other part of Lion's space in the city contains IT and offices that make up the company's global headquarters.
Lion first indicated on June 5 it was actively seeking a partner or investor for the iD3 unit. The company floated the idea because it wanted to unload the costly business from its books, and said it would even consider selling it outright if it meant improving its chances for overall profitability.
Coffey this morning told GenomeWeb the company expects the move to save it up to $20 million per year beginning in January 2003, Lion's fiscal fourth quarter, and to help it reach profitability by that time.
CEO Friedrich von Bohlen said at a news conference in Heidelberg in June that Lion was looking for a solution to the iD3 issue and wanted to reach an agreement by the end of the year. He said Lion had the choice either to "go on with that [iD3] program and further finance it" or to get rid of it and "focus on where we think we are really unique."
"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," von Bohlen said in an interview in June with BioInform, GenomeWeb's sister publication. "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 at the time. A person close to the company said this morning that despite the turn of events there is no sense of "regret" within the firm.