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Lion Posts Sharp Rise in Quarterly Revenues, Losses

NEW YORK, Nov. 8 – Lion Bioscience said Thursday its fiscal second quarter revenues more than doubled to 10.2 million euros ($9.1 million), compared with 4.5 million euros in the year ago period, as revenues from research and development fees tripled.

Such fees accounted for 6.0 million of Lion’s second-quarter revenues, compared with 1.4 million euros a year ago. Revenues from software licenses jumped 38 percent to 4.3 million euros, compared with 3.1 million a year ago.

“We will continue to increase our revenues,” said Peter Willinger, vice president of global finance for Lion. “Typically, our fiscal third quarter, Q4 for our customers, is a strong quarter.”

The increase in Lion’s revenues, however, was met by a steep increase in expenses, which surged to 22.0 million euros, compared with 9.4 million euros in the year ago period, as costs increased across the board.

As a result, the Heidelberg-based bioinformatics company’s operating losses widened to 11.8 million euros, compared with operating losses of 4.9 million euros in the year ago period. 

The company posted net losses of 10.3 million euros, or 0.55 euro a share, in its second fiscal quarter, compared with 4.1 million euros, or 0.25 euro a share, in the year ago period. 

Willinger said that the company was still confident it would be able to reach breakeven in 2003 or 2004.

“We reduced our net loss from the first quarter by one million euros,” he said. “We are stable on the cost side and we will continue to increase our revenues.”

Willinger said that Lion was constantly scrutinizing its expenses, seeking ways of trimming on materials and other inputs.

“These are minor things, but they allow us to save,” said Willinger, adding that the company was continuing to hire.

Lion currently has 534 employees, up from 469 in the first quarter.

The company had cash and cash equivalents of 15.9 million euros at the end of the quarter, down from 67.2 million euros at the end of March. 

Willinger noted that marketable securities brought the company’s cash position to 137 million euros, an amount that would allow the company to acquire other firms as it seeks to build its position as a leader in the genomics field.

“We are still watching our competition and we have some M&A activities [planned],” said Willinger, declining to offer details.

He said, however, that Lion’s next big announcement was likely to entail a partnership with an undisclosed company and that any acquisition would take place at a later date.

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