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Molecular Applications Shuffles Board, Top Management Structure

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PALO ALTO, Calif.--Molecular Applications Group announced several senior management changes last week that the company said were intended to position it as a "strategic technology partner and bioinformatics provider to the pharmaceutical, biotechnology, and agricultural industries."

Departures during the past year of several top staff from the privately held company, including vice-presidents of engineering and sales and a chief scientist, have raised questions among industry observers about the firm's stability. One former employee who departed last year told BioInform "there are many rumors attached to different people's reasons for leaving," but that "certainly if the company had been run better I wouldn't have bothered looking around."

Myra Williams, Molecular Applications's CEO, told BioInform that the latest changes have put in place "a senior management team that has the skills and experience that can really move the company forward."

Williams said a key change has been the promotion of John Andrews from his former position as vice-president for sales and marketing to chief operating officer and executive vice-president. Williams said, "I asked him if he would move to the West Coast so he could be active in my absence. He has a wonderful way with people, and I need to be on the road meeting with investors and customers and heads of research."

Industry insiders who spoke with BioInform said the decision to create a COO position was a good move for the company. "Myra is a fantastic speaker. She has great relationships with the industry, she always comes across first-rate, and she is very good at painting a very good picture of the company," remarked a source close to the company who spoke not for attribution, adding, "but she has strengths and weaknesses just like everybody else and probably her biggest weakness is in the day-to-day operations of the company."

Installing Andrews as COO should benefit the business by allowing Williams to "spend all of her energy outside the walls of the company talking to potential partners and customers," the source observed.

Williams explained the decision: "I'm the person who has the greatest depth of pharmaceutical industry experience and am sort of the strategic person in terms of the vision of where we are and where we're going as a company." She added, "It's crucial for me to be out there meeting with the research leadership as well as the IT leadership to really position Molecular Applications appropriately and find out what we can accomplish scientifically as well as with our software." She noted that the staff change has already allowed her to plan upcoming business trips to Europe and Japan.

A change to Molecular Applications's board of directors is also expected to give the organization a boost. Michael Levitt, a company cofounder and chair of the department of structural biology at Stanford University's School of Medicine, has been replaced as chairman of the board by John Diekman. Observers contended that Levitt focused more on his scientific than on his corporate duties.

Williams said that Levitt, who will become vice-chairman of the board, "would be the first to say that he opened the board meetings in his role as chairman."

Diekman, who is managing partner of Bay City Capital, an investor in Molecular Applications since March 1998, also serves as chairman of the board for Affymetrix. Williams said he "brings incredible depth of knowledge and leadership" to the company. "To have someone who is chairman of the board now who is playing an active role has really been a wonderful opportunity for the company," she said.

Other changes included the promotion of Paul Thomas, an expert in protein threading, folding, function, and structure prediction who has held positions at SmithKline Beecham and Pangea Systems, to executive director of research. Chris Lee, another cofounder and director of Molecular Applications who created the company's Look and GeneMine products, has become chief science advisor. Lee was vice-president of research before becoming assistant professor in the departments of chemistry and biochemistry at the University of California, Los Angeles.

Asked about the status of business, Williams responded with characteristic enthusiasm. GeneMine, a product that Molecular Applications first began shipping about a year ago, has been "very successful" and has more than 20 customers now, she said. Williams added that the company is getting ready to launch a new product in collaboration with Affymetrix. "Major pharmaceutical companies have signed up now to do the beta test of that, and we're very enthusiastic," she said.

Williams said she is in negotiations on several research collaborations "which would move us into a major new area," and she alluded to a "pet project" that she has been hawking to pharmaceutical companies. "One of the reasons I'm on the road now is because I think there's something we can do that can be very exciting for drug discovery that will take advantage of our proprietary technology and be a very significant advance," she said. Although the project is still confidential, Williams said, "I'm finding a lot of enthusiasm with major pharmaceutical companies I've met with."

As for whether the company is planning a future financing round, Williams said, "It all depends on what happens in the next couple of months."

"We are in the midst of some significant negotiations and we are enthusiastic that they are going to be concluded successfully in the next month, however, until you've got signed contracts you don't count them so we won't talk about those," Williams said. "It's possible that we will do another round. I really would like not to. And it is in fact also possible that we wouldn't need to. So it just depends on the timing of things that happen in the next six months or so."

--Adrienne Burke

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