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TimeLogic Restructures Staff, Pursues Series A Funding in Response to Disappointing Q4 Sales

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The slowdown in capital expenditures seen in the final months of 2001 is still taking its toll on the bioinformatics industry, as TimeLogic becomes the latest company to tighten its belt in the wake of disappointing fourth-quarter sales.

The Crystal Bay, Nev., maker of bioinformatics accelerators recently laid off four employees, leaving about a dozen as it restructures to prepare for its first round of institutional funding. The resources for those four positions will be redirected to other positions in anticipation of the funding round, said CEO Jim Lindelien.

While forced to release a bioinformaticist, a regional sales position, an IT technician, and a developmental manager, Lindelien said he’s hired a new COO, Rick MacDonald, who will help recruit a broader management team. The company is seeking a vice president of sales and marketing and a controller, and also plans to expand its scientific advisory board. “As opposed to internal bioinformatics staffing, we wanted to have a broader range of input from a team of outside bioinformaticists to drive the business plan as presented to the investors,” said Lindelien.

The staff changes come at the behest of VCs who have expressed interest in backing TimeLogic, said Lindelien, whose company has been self-funded and profitable for 20 out of its 21 years in business. Why go for a funding round now? “We’re small compared to the business opportunities our strategic partners can create for us,” explained Lindelien, referring to the company’s recent partnerships with Sun Microsystems and Compaq.

The company has just started beta testing the Solaris version of DeCypher — its first Unix version of the system — and is readying to migrate to Tru64 Unix under the Compaq Alpha platform (and eventually to Itanium). But while these partnerships offer many opportunities for the tiny company, “If we are to successfully and effectively execute on these opportunities quickly, we need to grow our organization faster than our customary organic growth model allows,” Lindelien said.

If all goes as planned, the funding round will be put toward general management, alliance management, sales, customer service, and development staffing needs.

While TimeLogic closed 2001 with “a small profit,” the fourth quarter “closed with about half of what we’d expected,” said Lindelien, who anticipates continued slower business in the first and second quarters of 2002.

Despite this fact, Lindelien said he’s confident the company will close its funding round in the second quarter. “Biotech is still well-funded relative to other areas,” he said. And he remains cautiously confident of the company’s performance in the second half of the year. “We have strong leads for the third and fourth quarters,” he said, “but this will depend on maintained or improved buyer sentiments between now and then.”

Ever the optimist, Lindelien said the slowdown in capital spending might even be a boon for the accelerator business as companies consider alternative options to get the most out of their IT budgets. “As folks get their budgets cut, they are more inclined to examine an accelerated solution and get creative,” he said.

— BT

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