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EXTRA: Lion s von Bohlen Discusses His Decision To Step Down as CEO, and What s Next

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DURING his six-year tenure as Lion Biosciences’ CEO, Friedrich von Bohlen played a leading role in shaping the commercial bioinformatics landscape. Embodying the heady promise of bioinformatics in the late nineties, von Bohlen not only helped build a company around a suite of software tools from the European Molecular Biology Laboratory, but took the company public with a €208 million IPO in 2000, and then established a global presence through the acquisition of the US-based NetGenics in 2002. As the economy soured, however, Lion served for many industry observers as a bellwether of harsher times for commercial bioinformatics firms. Over the past year and a half, the company has been forced to lay off more than half of its staff and has closed its facilities in San Diego and Ohio in line with its original goal of breaking even by the end of March 2004. Earlier this week, von Bohlen announced his plans to resign as CEO, and hand over control of the company to CFO Martin Hollenhorst and CBO Daniel Keesman, effective Jan. 1. BioInform spoke to von Bohlen soon after the announcement to discuss his decision, and learn a bit about his future plans.

What factors influenced your decision to step down as CEO of Lion, and how will this benefit the company?

I know it comes as a surprise to the outside world, and also internally, but it makes a lot of sense. After the foundation and successes during our growth, our IPO, our internationalization and broadening of our customer and partner base, the company has gone through two transition phases. The first one was when we decided to step away from drug discovery activities last year, and the second was this year when we had all the layoffs and site reductions in Ohio and San Diego. Two things happened here through these transitions. One is that the company, which had this duality in drug discovery and IT, became an IT company for drug discovery — so the focus moved from science to more IT. And in addition we went down from 500 people about one and a half years ago to 190-200 by Dec. 31 this year.

Therefore, I think that this company, with the shift in strategy, requires even more focus on IT expertise.

The second point, however, is more important. When you come down from 500 to finally 200 [employees], for the people — not for you, or for the customers, or for whomever, but for the people in the company — this feels like a new beginning. And a new beginning for me requires awareness about what the corporate culture is now — what are the values that we maintain, that we change, that we say are our values, to grow the company again? Because I think if you don’t have this discussion, it’s difficult to regain momentum. And we can only have this discussion if it is crystal clear that there was an endpoint, because otherwise you never know if this is the discussion or just another discussion.

The other [point] is that this discussion has to be led and owned by the leaders of the company who are going to lead the company for the next few years, because it’s about credibility and trust. Could I have led this discussion? Surely, I did it in the past, and I know I can do it. And I think that this is something I am particularly good at, actually. But, do I want to lead this discussion? And here we’re at the point where Lion — here in Germany even more than in America — is very bound and coupled with my person. Some people say that Lion is me, and that I am Lion. I’m the entrepreneur of the company, no doubt, but if I did lead this discussion again, [it would] really pour me into concrete — then [Lion] becomes even more Friedrich von Bohlen. So the question was, ‘Do I want this or not?’ and you know my answer.

I’ll tell you why I didn’t want it: It’s not because I couldn’t, it’s because — if you take it from a banker’s point of view, for example — this is a very high single risk for an organization, such a strong person being responsible for everything. And I think that this is a good point in time now to really empower the other leaders we have.

I want to stay with the company, and I will stay with the company, but I want to move into what we call the supervisory board. In America, you would call that a move from being an acting director to a non-acting director of the board. So I stay close to the company, I stay with the strategy, I stay responsible for many things, I stay accountable for many things, but I take a bit more distance and step out of the day-to-day business.

So I think it’s a really good point in time to put this company on broader shoulders and give it the chance to grow in a newly structured way, with new dynamics.

Did Lion’s pending break-even deadline of March 2004 have anything to do with your decision to step down?

Not at all, and I think that’s another reason why this point in time is good. On the one side, we’re finishing the layoffs on Dec. 31. On the other hand, on Jan. 1, the quarter starts where we want to break even. Again, this is all really pointing to this new beginning. I won’t be active operationally on March 31 when we hopefully have that break-even, but the ball is rolling now. I’m more than happy if my colleagues can say we broke even. My ego doesn’t need that, because I know if it happens it was triggered by all the efforts in the last weeks, months, and years.

Is there any chance that the company is going to be positioned for a sale in the coming months?

There’s always a chance, because companies are entities that can be bought and sold. So I can’t say no, but I can say there are no plans at this time.

So was your decision to step down related to plans to sell the company?

No.

What’s next for you after Lion? Will you stay in bioinformatics?

I’m 41 years old and everyone who knows me probably bets that I’m not voting for retirement. I would say I’m an entrepreneur through and through. I have no concrete plans as of today, but fortunately, there are a lot of things to do in this industry on both sides of the Atlantic, and I think over the next couple of weeks and months that I will let things come to me, rather than try to push things … So it’s not about finding a job, it’s about doing what I’m enthusiastic about. And this is what I’m sorting out now. I also want to have time for things I just ignored for the last seven years, which is family and friends. And I will recharge my batteries. I’m 100 percent sure you will see me acting entrepreneurially again in this industry. And knowing myself, probably in the not too far future.

What are you most proud of during your tenure at Lion, and what might you have done differently?

What I’m most proud of is that, first, our vision, our strategy and our success made everyone aware that information integration and information management in drug discovery is a value driver, that it’s a strategic must for drug discovery.

Another thing I’m really proud of is that we are a true global company. There are differences in culture between Europe and the United States, but I think as an entrepreneurial start-up company, we did pretty well on both sides of the Atlantic, and I’m proud that Lion is a strong brand, also in the United States. There are not many German companies who can say that, and with the United States being the largest market for this [technology], it’s an absolute must for our further success to be strong here.

There is also another point: we always had a fantastic spirit. We still have highly motivated people who are well skilled, and we have a good mix here of the [European and American] cultures. In the beginning it was sometimes difficult, so this is also something I’m proud of because I personally spent a lot of time connecting the teams.

If you ask me what could we have done better, if I could turn back the clock, I would grow slower. The growth was, looking back, too fast, and it created part of the problems that we had. Every professor of economics tells you that if you grow too fast it is difficult to build and maintain the respective infrastructure, and then you run into an organizational problem. That happened at Lion, and it happened to many companies of the 90s. That’s one of the reasons we had to come down from 500 [employees] to where we are today, but today we have the structures, we have the management and the people who know how to manage these structures, and I think today we have the understanding that we have to grow, but we have to grow in a better structured way.

However, let me also say that in 1998, 1999, it was not about structure — it was about who was claiming which square mile for himself, so the strategy in those days was right, and when the times changed we reacted accordingly. It cost us money, and it cost us people, and with the people it also cost us some motivation, but we did it, so that’s another thing we can be proud of — even though we grew fantastically well and we really transitioned it well.

What do you see as your legacy to Lion? Where do you want the company to be a year from now or five years from now?

First of all, I’d like to see that our strategy gets materialized and succeeds. The markets are weak at this time, but I am convinced they will grow two-digit percent[age points] per year in the future. So Lion shall stay in the global lead for integrated and integrating IT solutions for drug discovery. I would also like for this company to maintain an entrepreneurial spirit, for innovation and motivation. Also, I want this company to become more professional in everything we do. For quality and productivity. And to understand that success is a good blend of both. I know that all of this is something that I can help the company go on with. And I will.

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