Andrew Whiteley, who took over the reins of InforMax last month, offered the first hints about his strategic plan for the company last week.
In a conference call to discuss the company’s dismal first-quarter 2002 earnings — in line with the warning InforMax issued in April [BioInform 4-15-02] — Whiteley also provided an overview of his vision for the company as it battles to remain competitive in the rocky bioinformatics market.
Topmost among Whiteley’s plans is a change of focus away from the company’s GenoMax enterprise product in favor of a new, broader, suite of desktop applications. The strategy will be a departure for the company, which has until now measured its success almost solely on the yardstick of GenoMax sales. With that number adding up to zero in the quarter ended March 31, 2002, perhaps Whiteley’s strategic direction was unavoidable.
Whitely said the fault lies not in the GenoMax product itself, however, but in the lower-than-anticipated market demand for enterprise software in the life sciences. “The enterprise market is in many respects a bit of a misnomer,” he said. While enterprise systems in the mainstream IT world are truly pervasive throughout an organization, bioinformatics teams tend to work in discrete, focused, workgroups with their own data and software requirements. “The idea that you can put all these disparate data sources into a single technical environment is extremely expensive to deploy and conceive of,” said Whiteley. Instead, the company will address the individual “vertical” applications that run on the desktops of researchers.
“We see the value being in the vertical, in the applications that are in the hands of the users, not in the back-end infrastructure,” said Whiteley. In line with this, InforMax is “counting very little on GenoMax sales” to contribute to estimated annual revenue of $20 million for 2002, according to COO John Green.
Instead, the company is ramping up its product development efforts to address the broader range of opportunities it sees in the market’s niche areas of gene expression, functional genomics, and systems biology. Aside from the upcoming 3.4 release of GenoMax, scheduled for the end of the second quarter, and version 8.0 of Vector NTI, due out in the third quarter, Whiteley said a full suite of new applications would be available from the company by the end of the year. Version 2 of the gene expression application launched last year will be released in the third quarter, with three new, undisclosed, applications to be deployed “very rapidly starting in the third quarter and over the following nine months.”
Whitely did not elaborate on the details of the new applications, noting that they were “commercially sensitive to the organization.”
Also part of Whiteley’s strategy is a “streamlining” of operations over the next quarter. Following on a reduction in headcount from 262 to 219 over the course of the first quarter, additional layoffs will take place in the coming months, he said. Further details on the company’s plans to cut staff were not disclosed.
InforMax expects $4 million to $4.5 million in revenues for the second quarter of 2002. Its current cash position of $56 million is expected to be $40 million by the end of the year.