Lion Bioscience last week reported a 33 percent drop-off in revenues for its 2003/2004 fiscal year ended March 31, 2004, and says that the slide will continue through the end of this year. But the company sees a light at the end of the tunnel, as it is projecting double-digit growth in FY 2005/2006 based on a ramped-up product-launch roadmap that will get underway this summer.
For the 2003/2004 fiscal year Lion posted preliminary revenues of €19.5 million ($23.5 million) — a €10 million drop from receipts of €29.4 million in the 2002/2003 fiscal year ended March 31, 2003. For the quarter, revenues fell 66 percent — to €3.1 million in the current quarter, from €9.0 million in the prior-year period.
Lion failed to meet the target of break-even that it had long promised to reach by March 31, 2004, but the company had recently warned that it would not reach this oft-cited milestone. [BioInform 02-09-04]. The preliminary results are in line with guidance that the company provided earlier this year, along with its FY Q3 earnings [BioInform 03-01-04].
Lion said it signed multi-year SRS agreements with two “prominent” life science customers in North America during the quarter, and several SRS and Target Engine agreements with customers in Asia. A company spokesman said he could not yet name these new customers.
Due to continued restructuring, Lion narrowed its net loss for the year to €22 million, compared to €152.8 million in FY 2002/2003. The company’s cash burn for the year was €29.8 million, and it held cash and cash equivalents of €43.1 million as of March 31, 2004. The company’s headcount will hit the 150 mark in mid-2004.
For the year ended March 31, 2005, Lion projects that revenues will continue to fall, to €12-13 million, while losses will improve to €10-11 million. Lion said it expects to be cash-flow positive for the fourth quarter of FY 2004/2005, with a cash position of €30 million. The company did not include revenues from any possible follow-on projects with Bayer as part of its revenue forecast for the current fiscal year. G nter Dielmann, vice president of investor relations at Lion, told BioInform that the company is “still in discussions” with Bayer regarding an extension of the current collaboration, which ends in June. “We’re confident to arrange a follow-on project, but in a much smaller size,” he said via e-mail.
Looking ahead to FY 2005/2006, Lion projects a turnaround in its fortunes, driven by sales of several products that are currently under development. The company plans to launch five new products or product upgrades during the current fiscal year, including SRS 8.0 and Target Engine 1.1, which are due out this summer.
The primary improvements in SRS 8.0 will center around usability, said Werner Eberhardt, vice president of global marketing at Lion. The release will include web services functionality to improve cross-platform interoperability, as well as JSP (JavaServer Pages) technology that will allow users to customize web pages and views. Another new version of SRS — with even more usability enhancements — is slated for release before the end of the year, Eberhardt said, as well as a second upgrade of the Target Engine.
In addition, Eberhardt said, Lion will begin releasing some cheminformatics modules it has been developing for its Lead Engine platform before the end of the summer. Eberhardt said that the company has departed from its original plan to market Target Engine and Lead Engine as monolithic offerings, and has moved toward a component-based approach that allows users to plug different modules into an existing informatics infrastructure.
Likewise, Eberhardt said, the Lion DiscoveryCenter integration platform has been discontinued as a standalone product, because “few companies were willing to invest in the platform,” but Lion offers components of the technology as part of the underlying framework for Target Engine as well as in its professional services engagements.
Lion will release its final financial results for the 2003/2004 fiscal year on June 23.