NEW YORK (GenomeWeb News) – Wrapping up a strategic review it began in January, Tripos said today that it plans to sell its UK-based Discovery Research business and restructure itself as a pure-play discovery informatics provider until it can find a buyer for that business as well.
The company disclosed the decision in its third-quarter financial statement, which it filed with the US Securities and Exchange Commission today.
Tripos began weighing its strategic options after Pfizer decided late last year not to renew a file-enrichment collaboration with the Discovery Research group.
In the SEC filing, Tripos said that it has “determined to exit the discovery research business” and added that it will “proceed as a stand-alone public Discovery Informatics business unless it is able to negotiate and conclude a transaction to sell the Discovery Informatics business.”
The company said it has cut staff at Tripos Discovery Research, which is based in Bude, UK. The group, which had 161 employees at the beginning of 2006, now has 43 staffers.
Tripos said in the filing that it is “engaged in advanced discussions” for the sale of the Discovery Research business, and that it “continues to evaluate possible sale transactions, and is currently in advanced discussions with a potential buyer” for the Discovery Informatics business.
Tripos, which had $2.3 million in cash and cash equivalents as of Sept. 30, said it will need to seek additional capital for the Discovery Informatics business, either through the replacement of a bank credit facility that matures Jan. 1, 2007, or through the proceeds of other debt or equity financing.
Revenues Slide, Profit Swings to Loss
Revenues from the unit have dwindled. For the quarter ended Sept. 30, the company’s total revenues fell 44 percent to $7.7 million from $13.2 million in the third quarter of 2005. The fall-off was primarily due to the Discovery Research group, which saw a 62-percent drop in revenues to $1.6 million from $5.8 million year over year.
Revenues for the Discovery Informatics business fell 18 percent to $6 million from $7.3 million in the third quarter of 2005.
R&D spending was flat at $2.8 million, compared to $2.9 million in the prior-year period.
Tripos reported a net loss of $4 million, swinging from a profit of $160,000 in the third quarter of 2005.