Accelrys said this week that its fourth quarter revenues rose 42 percent and that it has completed its integration activities with Symyx "on schedule" and within its planned budget.
During a conference call to discuss its Q4 results, CEO Max Carnecchia said that in 2011, Accelrys plans to focus on "establishing a baseline of operations for the business, optimizing our processes, and creating a foundation from which to grow and build in 2012."
Although the company's flagship product, Pipeline Pilot, experienced double-digit growth in the last quarter, Accelrys said that the Symyx electronic laboratory notebook it acquired along with the company last year failed to perform as expected.
Accelrys officials said that the notebook's poor performance was likely due to the length of its sales cycle as well as customer concerns about the size and scale of an enterprise ELN deployment as opposed to a reduced market opportunity. As such, Carnecchia said the offering will remain "a core element of our go-forward strategy."
The firm's "refined business strategy" uses the combined Accelrys-Symyx product portfolio to address what company officials said is an unmet need across multiple industries for tools that "optimize the scientific research and development value chain," trim down development costs, improve compliance, and speed up production while at the same time "reducing reliance on point solutions based on disconnected architectures."
In a separate interview with BioInform, Trevor Heritage, Accelrys’ executive vice president for software products, explained that prior to the merger, both firms focused primarily, although not exclusively, on discovery research for pharmaceutical industry. However, the combined vision has a broader scope, he said, covering research and development through to early manufacturing.
In line with its revised business direction, the company launched its Enterprise R&D Architecture this week, to provide a set of applications that help with experimental processes and information and reporting requirements, the early manufacturing phase of product development, and process scale-up, among other needs.
The new R&D architecture, which is based on the Pipeline Pilot platform, is comprised of four pillars that incorporate several of the company's products.
The pillars include: modeling and simulation capabilities provided by its Discovery Studio and Materials Studio products; enterprise lab management via its electronic lab notebook and lab-execution and -analysis software; workflow definition and capture provided by Pipeline Pilot; and data management and informatics provided by the Isentris platform.
Through these pillars, Accelrys says it aims to provide better outcomes and reduced costs, enhance lab productivity and collaboration, optimize scientific workflows, and improve understanding and management of data.
Concurrently, Accelrys released version 6.6 of Symyx Notebook, which integrates with the Pipeline Pilot and Isentris platforms.
The latest version of the tool offers new capabilities to design and document chemical and biological formulations, and connect Accelrys ELN experiment repositories with the Isentris decision-support software, allowing users to combine results from notebook experiments with additional sources of information.
In addition, combining the notebook with Pipeline Pilot gives users access to 20 scientific libraries and 3,500 scientific components.
The announcements follow last week's launch of the NGS Collection for Pipeline Pilot making Accelrys the latest informatics company to enter the next generation sequencing market (BI 02/25/2011).
In other financial results, orders for the firm's modeling and simulation tools were also down compared to the same period in 2009; and Accelrys' content business — which represents 10 percent of its revenue — is also "declining" with renewal rates "consistently close to 70 percent."
CFO Michael Piraino reported that in Q4, four Accelrys orders exceeded a million dollars compared to three a year ago; and 10 Symyx bookings exceeded $1 million compared to eight a year ago. In addition, the company saw nearly 100 percent subscription renewal rates on term licenses and maintenance renewal rates on perpetual licenses averaged about 90 percent.
Revenues for the three months ended Dec. 31 climbed up to $31.3 million from $22.1 million for the comparable quarter last year representing a 42 percent increase.
Net loss for the current quarter was $15.6 million compared to a net income of $1 million in the same quarter of 2009.
Free cash flow for the quarter was approximately $5.8 million compared to $2 million for the same period last year.
Revenue breakouts for the quarter by geographical region were 51 percent for North America; 27 percent for Europe, Middle East, and Africa; and 22 percent for Asia-Pacific.
As of Dec. 31, Accelrys held $141 million in cash, cash equivalents, and marketable securities representing an 82 percent increase over $77.6 million reported a year ago. Total deferred revenue for the firm at the close of Q4 was $67.5 million.
Non-GAAP revenues for 2011, adjusted for the expected write-down of deferred revenue, are expected to be in the range of $155 million to $160 million.
Total employee headcount now stands at 545 compared to 370 for the same period a year ago.
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