It’s been a rough quarter for Lion Bioscience. The company’s high-profile CEO Friedrich von Bohlen departed in January as layoffs continued across the firm; it failed to reach its goal of profitability by the end of its fiscal year; and it had to restate its prior-year earnings and revise its future sales outlook. So the company is turning to an old friend in its time of need — the European Bioinformatics Institute, where its flagship product, the SRS data integration system, was originally developed.
With Lion and EBI on the same page regarding unrestricted data access via SRS, the organizations can now embark on new collaborative projects, Etzold said. For example, EBI plans to use SRS as the foundation for a “unified front” for all of its databases and services, which are currently fragmented, so that users can easily navigate from one service to another using a single interface. Lion is also working with EBI researchers on components for the graphical display of protein alignments, 3D structures, ontologies, and other sources of data using technology that Lion is developing for the next release of SRS — version 8.0, which is scheduled to launch in June.
The company’s new academic-friendly access policy will open up opportunities for Lion to collaborate with other academic institutions on bioinformatics projects, Etzold said, and will also benefit Lion in several other ways. First of all, he noted, the policy is more in line with the culture of the bioinformatics community, in which data access is a top priority in both academic and commercial settings. Secondly, the company is hoping that unrestricted web-based access to the resource will draw in new potential commercial users who may then opt to purchase a license for an in-house version of the product. In-house installation of SRS offers security advantages for customers wary of breaching the firewall to access public data, Etzold said, and also allows companies to integrate their proprietary data sources with publicly available resources.
Lion has already said that it plans to pull back on its marketing efforts for the enterprise-wide Lion Discovery Center integration product in favor of its flagship SRS product. Convincing new customers of the advantages of in-house installation of SRS will be a key part of this strategy, and to do this, the firm is designing SRS 8.0 to include features that will make it easier for commercial firms to make the software part of their internal infrastructure, Etzold said.
Removing restrictions for the web-based version may seem to fly in the face of the company’s return to an SRS-focused product strategy, and Etzold acknowledged that there was a good amount of internal discussion within Lion regarding the decision. Some asked, “If users from big pharma can use the SRS server, why would they want to have it in-house?” Etzold said, “but we think it’s more attractive to have it in-house.”
Etzold noted that SRS is “not only a web interface, but also a technology that provides services underneath.” Lion offers APIs and other features to help customers make SRS part of their underlying data infrastructure, and SRS 8.0 will have “a clearer separation between the interface and the services underneath, and we think a lot of customers will want to go in that direction,” Etzold said.
SRS or SOS?
Considering the struggles that Lion has had in the past few years, the strategy it is building around SRS could make or break the company. Some observers are doubtful that Lion can turn things around, even if its SRS sales increase. “With SRS they are focused on genomics, and they face two problems,” said Patrick Fuchs, a biotech analyst. “One is that in the genomics area, you now have more off-the shelf solutions — arrays, oligos, PCR, and siRNA — where you don’t need to search the genome to get the sequences. They are already available from the vendors. The second [problem] is increasing competition from academia.”
Fuchs added that he doesn’t “see a growth story” for Lion based on its SRS strategy. “The only business model that I could see in that area would be, in my view, a kind of bioinformatics Invitrogen — a company that licenses freeware from academia, integrates it, and sells it.”
Lion’s expanded relationship with the EBI, and its goal of reaching out to more academic groups, may eventually take the company in that direction, but it remains to be seen whether that strategy will see it through its current challenges.
Etzold acknowledged that “bioinformatics is a bit of a scary area” when it comes to commercialization strategies. “Normally, you have to deal with customers and competitors, but in bioinformatics you also have to deal with competition from the public domain.” Etzold said that although Lion’s new open-access policy is a better fit with the habits of the bioinformatics community, the commercial benefits of the strategy weren’t immediately clear to some of the firm’s upper management. At first, he said, “they were uncomfortable with the idea of making SRS services available for free. They have seen the threat, but now they see the opportunity.”