This story has been updated from a previous version.
NEW YORK, April 5 – InforMax on Thursday became the fourth company in the past month to say it intends to begin offering bioinformatics consulting services over the course of 2001.
“The expansion of our scope in professional services is going from installation services to what I would consider almost scientific management consulting services,” said Tim Sullivan, senior vice president of marketing and sales at InforMax, in a conference call to discuss the company’s projected first quarter revenues for 2001.
“[We’ll be] helping our clients integrate their business goals, their business model, organization design, process design, a mix of wet and dry lab processes, and also their understanding of how to integrate technology into the overall solution,” he said.
Informax of Bethesda, Md., said Wednesday it expects to report first-quarter 2001 revenues of $6.5 million, double the $3.2 million in revenues it reported for the year-ago quarter, but expects losses to be significantly wider than Wall Street’s expectations.
The expected revenue covers software license fees only. Anticipated fees from professional services were not included in the projected bookings. Sullivan said the company would begin posting "meaningful" results from professional services in the second quarter of 2001.
John Green, CFO of InforMax, said that projected revenue for 2001 is around $24.5 million for software license sales with professional services in the order of $6.5 million.
InforMax’s entry into consulting follows on recent announcements by Pharmacopeia, IBM, and NuGenesis technologies to incorporate consulting practices into their business models.
Informax intends to increase its current head count of 247 to over 300 by the end of year as it expands its R&D and professional services staff.
The curent profesional services staff of 25 will "grow gradually" over the course of the year, said Jim Bernstein, president of InforMax.
Elaborating on the six additional GenoMax sales InforMax gained in the first quarter, Sullivan said four perpetual licenses and two term licenses, which range between one and three years, were signed at two academic and four biotech sites. He said the average first-year value of the term license is approximately $270,000 as opposed to $250,000 in the fourth quarter of 2000.
InforMax has sold GenoMax to 32 customers.
InforMax CEO Alex Titomirov said that InforMax is confident of its ability to reach profitability by the fourth quarter of 2002 in the face of the market downturn. “First of all, NIH funding is at an all-time high and is expected to increase from $20 billion to $22 billion. Secondly, last year the biotechs raised $35 billion in cash and we do not believe that they have even come close to spending down the cash that they had raised,” Titomirov said.