NEW YORK, July 12 - Pharmacopeia said Thursday that it is considering splitting its software business, Accelrys, off from its drug discovery businesses, as well as other strategic alternatives, to help the drug discovery operations expand independently of its collaborators and access a greater number of drug targets.
In addition to splitting its two core businesses, the company is also considering making acquisitions, or pursuing joint ventures to allow its drug discovery business to "reach its full potential," said Sue Rodney, Pharmocopeia's manager of investor relations.
Pharmacopeia made the announcment as it warned of a $1 million shortfall in second quarter 2001 revenues from its drug discovery business. The company said drug discovery revenues totaled about $6.8 million during the second quarter, and that its Accelrys software business earned revenues of about $19.5 million to $20 million. Pharmacopeia will announce its precise earnings August 1.
Rodney said that splitting Accelrys from its drug discovery business might "allow people to assign a more appropriate valuation to the two businesses." Currently, she said, investors value the combined company somewhere between a profit-oriented software company and drug discovery company with long-term revenue prospects. The company's shares closed yesterday at $19.55, down from a 52-week high of about $49.
But Pharmacopeia had more sanguine news about Accelrys. That part of the business saw revenue grow during the second at an annual rate of about 35 percent, in line with the company's expectations.
In April, the company combined its four software subsidiaries, Molecular Simulations, Synopsys Scientific Systems, Oxford Molecular, and Genetics Computer Group, into Accelrys, and said that the new company would branch out into bioinformatics consulting services, in addition to developing software for life science applications. At the time, the company said the reorganization would allow the drug discovery part of the business to operate more efficiently.