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German Bioinformatics Company to Expand Operations into Eastern US

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HEIDELBERG--Lion Bioscience, a young bioinformatics software firm here with its sights set on globalizing operations, will open a US office this spring, company officials told BioInform. "In this business you have to be multinational," explained Christian Marcazzo, product manager for Lion's Sequence Retrieval System.

Marcazzo, who left Molecular Applications Group last year to join Lion's Cambridge, UK, staff, said the two-year-old company has established a strong base in Europe, with customers including Hoechst, Bayer Pharma, Infogen, Degussa, and Boehringer Ingelheim. In the US, Lion has deals with Pharmacia and Upjohn and ZymoGenetics, the American subsidiary of the Danish company Novo Nordisk. But, Marcazzo added, "It seems like what happens in selling software to the pharmaceutical industry is, you get pretty far along with one group of people in one office of a company but you can't go and support the other half of the company because they're halfway around the world."

"What we've understood is that bioinformatics is truly a global market," said Clause Kremoser, director of corporate development for the 125-person firm.

"We believe that in the next two to three years one or two market leaders will evolve, and if you want to be among this crowd, you have to be present in the US market," he asserted.

Marcazzo said the US location has not yet been chosen, but that New Jersey and Boston are candidates.

Lion, an acronym for Laboratories for the Investigation of Nucleotide Sequences, grew from a government effort to develop a biotechnology and bioinformatics industry in Germany. With government incentives, three groups at the European Molecular Biology Laboratory here--one working on sequencing technology, a second on bioinformatics, and a third on in-depth functional analysis--collaborated to form Lion. It is anchored by two products, BioScout and Sequence Retrieval System, known as SRS.

BioScout is Lion's approach to a complete bioinformatics package, Marcazzo said. "It does high-throughput sequence analysis and has project management functionalities," he explained.

SRS is a database integration system for biological data. "It unifies access to the world of biological databases--350 databases are integrated into SRS in one form or another," Marcazzo said. "That really addresses one of the fundamental problems in this community: not only is there a ton of data, but the data are all over the place in all these different databases," he added.

"It has unique functionalities in that it is capable of hooking onto various databases quite independent of form and content," said Kremoser. About 50 firms currently use a stripped-down academic model of SRS, a commercial version of which Marcazzo said will be on the market in the next month. Lion licenses SRS for about $55,000 annually for use on a single server accessed by an unlimited number of users. The fee includes basic support, and Marcazzo said Lion can provide additional services such as installation, consulting, and training services.

Kremoser said the company aims to make its tools as easy as possible for bench scientists to use. "The lab bench scientist shouldn't be a bioinformatician to make use of bioinformatics. He should be able to use expert tools for his daily work," he explained. "We have created a kind of expert system that guides the user through the process of sequence annotation, 3-D structure prediction, and so on."

Still, Kremoser continued, Lion wants to be viewed as more than just a bioinformatics company. "We're a genomics and bioinformatics company," he contended. "We have wet lab experimental biology facilities, with the usual genome mapping, sequencing, and functional genomics technology, which means we apply our own bioinformatics in-house for our own target-gene discovery projects." Applying the tools to its own research also allows the company to test the effectiveness and user-friendliness of its system and get immediate, helpful feedback, according to Kremoser.

"We take a customer-oriented look at the field," he noted. "We take an approach fitting toward the research and development cycle of the typical pharmaceutical company, which goes from biology research-target gene discovery toward chemical research, development of compounds, pharm-tox, and even to clinical development." Kremoser continued, "We say the big issue for a pharma company is not having a single solution in all these different research departments, but actually to provide a kind of IT backbone that is a company-wide solution to help integrate data from these various sources."

Although Lion has not yet developed a tool for integrating chemical compound data, Kremoser said a prototype that provides a bridge between bioinformatics and cheminformatics is up and running.

Asked about competitors, Marcazzo said the biggest challenge he sees is pharmaceutical companies' in-house software developers. "If someone started to build a significant bioinformatics infrastructure, they often feel that BioScout has too much overlap to throw away what they've done already. Once they get past that point, where they realize there is functionality in BioScout, I think the competition is the whole range of small bioinformatics companies in California, such as Pangea," he said.

Lion's steady growth has attracted investors, some of whom already back bioinformatics companies in North America, Marcazzo claimed, but the suitors are being turned away. "Our stock is entirely held by principals in the company and we have no interest in taking outside investors for as long as possible," he said.

--Harvey Black

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