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Accelrys Exec: New Freedom as Standalone Entity Will Drive Product Development Strategy

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Just three months after its split from Pharmacopeia Drug Discovery, Accelrys is “gelling” into its new life as a pure-play software firm, company officials told BioInform last week.

The company’s management team is nearly complete, and plans are underway to move its corporate headquarters to a “more modern” facility in San Diego with a state-of-the-art IT infrastructure. But more importantly, according to Steven Levine, senior director of new business development for Accelrys, “we have more freedom within corporate development now because decisions aren’t made at the Pharmacopeia level, but at the Accelrys level.”

That freedom should eventually translate into substantial growth for the company, Levine said. CEO Mark Emkjer has outlined a three-pronged strategy for extending Accelrys’ reach: organic growth of its current product lines, in-licensing of new technology, and acquisitions. Levine said that Accelrys officials have been focused on fleshing out the details of this tripartite strategy, and have nearly arrived at a “coherent picture” for the company’s technology development roadmap.

Over the past year, Accelrys has focused its internal development on two main areas, Levine said: the Discovery Studio product line and porting its products to Linux. The company is halfway through the Linux porting process, which Levine said has “gone over huge” with customers. “Virtually all” new sales for Catalyst and Insight II have been on Linux, he said, adding that one factor that has contributed to this success is Accelrys’ partnership with IBM. The company is selling its software pre-loaded on IBM hardware running Linux, which offers end-users a lower-cost and easy-to-install option. “Linux has opened up our modeling software to a different price point,” Levine said. “And the IBM partnership has helped quite a bit.”

Levine said that Accelrys is “seeing some demand” for Apple’s OS X as well, but the company has not yet made any concrete plans to port its software to that operating system. “It would be a challenge for us to offer the same support for Windows, Linux, and OS X — not that any one is better or worse, but the industry is just not big enough to support all of them, and we need to be selective,” he said. Accelrys may consider supporting OS X, however, “after we get really good at Linux, he said. “The groundswell [behind OS X] is not going to go away,” he added.

On the Discovery Studio front, Accelrys plans to launch an updated version of its GCG Wisconsin package — to be called DS GCG — toward the end of the calendar year. “We’re focused on building the GCG vision of uniting the product into a coherent story,” Levine said. As part of this effort, Accelrys is “in discussions” with the developers of EMBOSS, the open source alternative to GCG, regarding a possible collaboration. Funding for EMBOSS remains uncertain after the UK’s Medical Research Council announced in May that it will shut down the Rosalind Franklin Center for Genomics Research, where the project had been hosted [BioInform 05-17-04]. Peter Rice, an EMBOSS co-founder currently at the European Bioinformatics Institute, said at the Bioinformatics Open Source Conference in July that the project has not yet secured public funding and is looking for commercial sponsorship in addition to other funding mechanisms. Levine said that Accelrys and the EMBOSS developers have reached an understanding “that it’s not good for us to work at cross purposes.” While he was unable to provide further details about the relationship, Levine said that “the barrier has been broken down after years of bad blood.”

Accelrys has also taken an “aggressive” approach to in-licensing new technology over the past year, Levine said. The company recently announced a deal with Boston University to distribute the ZDock and RDock protein-protein interaction algorithms developed by BU’s Zhiping Weng [BioInform 06-21-04]. Levine said that the company has signed a “double-digit” number of similar deals recently, and that these new algorithms should begin showing up in the company’s products over the next six to 18 months.

Finally, Accelrys has taken an important step toward ramping up its acquisition strategy by hiring Mahesh Krishnamurthy as senior vice president of corporate development. Krishnamurthy, who was previously a partner at KT Venture Group and has a background in engineering, will lead the company’s acquisition activities going forward. As far as potential acquisition candidates, Levine said, “We’re looking, but there’s nothing we can discuss yet.”

There are some obvious holes in Accelrys’ product pipeline, however, that may be filled via acquisitions or technology licensing deals. Proteomics, for example, is one area that Levine said the company is looking into, as well as workflow management software. Other, more emerging areas, like chemical genomics, cellular modeling, and in silico ADME-tox prediction are further on the horizon, but under consideration. Levine said that one of the primary challenges for Accelrys is “striking a balance between being a stable supplier to the industry, while also remaining innovative.” The result, he said, is that “we’re not going to be on the bleeding edge in some cases. Our job is to find where the crossover is” between a promising bioinformatics application and commercial viability.

— BT

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