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MAG Installs Venture Capitalist As CEO, Launches New Three-Pronged Strategy

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PALO ALTO, Calif.--After a management reorganization in January that put in place a new board chairman and a chief operating officer, Molecular Applications Group this month introduced one more change to management and a revamped business strategy. Myra Williams stepped down from her role as CEO to concentrate on business development as a vice-chairman for the company from her home in Princeton, NJ. Board member and venture capitalist Debbie Yu was appointed acting CEO.

Yu initially invested in Molecular Applications in April 1998 as a general partner with Delphi Ventures. Last month she became a managing director at Bay City Capital, also a Molecular Applications investor. Yu told BioInform, "Because of the changes we put in place before, and now with a venture capitalist coming in as CEO, people would like to believe there is some kind of negative buzz. But the real story is that we have created a new business plan that really crystalizes why I invested in this company."

Yu described a new three-point business plan by which the company will continue to market and develop its software products as well as to deploy proprietary technological capabilities that, until now, it had not considered introducing to the marketplace. Said Yu, "These changes have been an opportunity for us to take a hard look at our capabilities and to build a new business context around them. Ironically, there are capabilities that we have in-house and have been developing but hadn't really contextualized in terms of a business opportunity."

Yu acknowledged that the company's approach has evolved since she became an investor: "I thought that MAG's approach with its science was really the best platform to create a computationally driven discovery company. Now that we've been investors for a year, I don't think MAG or any small company can necessarily get to the point where they are a computational drug discovery company." But, she added, "MAG can absolutely play an important role in contributing to important pieces" to such a company.

The first of Molecular Applications' newly defined core business components comprises the sale of existing and new software products. Said Yu, "We have Look and GeneMine, which we will continue to support and enhance over time." In May Molecular Applications said it will launch an additional software product, StingRay, expression analysis software developed through a joint venture with Affymetrix.

The company's second major thrust will be in "transformed content products." Yu explained that Molecular Applications will apply its "technology engine"--including in-house algorithms and proprietary technology, such as protein function determination methods--to public and proprietary data sources to sell "transformed" data.

A third component of the new strategy, Yu said, will be to apply that in-house technology "in a much deeper and more customized fashion with a discovery partner in a close working relationship."

Asked whether the company will perform such analyses itself or license the technology to drug companies, Yu said she envisions a variety of customized partnerships. "There are obviously issues of working with people's proprietary data and we don't want to license away our technology because we want to use it to do other things ourselves," she said.

--Adrienne Burke

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