LION's sales fell by a third to €19.4 million, as expected, although the company managed to cut its operating costs by more than 50 per cent to €38.5 million, helped by a dramatic (two-thirds) reduction in headcount.
Sales cycles for new LION products have been longer than expected because of what it has described as persistently slow investments from the life science industry and by the problematic financing situation in the biotech sector.
Nevertheless, there were encouraging signs in the final quarter of the year, suggesting that LION, like other companies supplying drug discovery tools to the pharmaceutical and biotechnology sector, may be seeing some signs of recovery.
In the fourth quarter, LION signed agreements with two new commercial life sciences customers in North America for its SRS package for handling bioinformatics data, and one leading non-profit medical institution. In Asia, LION signed new agreements for LION Target Engine - introduced last June and used for target identification and validation - and for SRS.
A spokesman for the company said that the new orders were encouraging, but that there is no evidence so far of a recovery in spending by the pharma/biotech sector. The US provides an encouraging sign that the company may be starting to penetrate the important US market.
LION said it is planning to modify its bioinformatics products by developing more attractive end-user interfaces and expanded functionality to allow for the inclusion of clinical data. One of the key developments is that the company's products are moving towards a modular structure, allowing customers to select just those elements of the software suite that they require.
The hope is that this will win new customers for the software, which start from a small installation and then expand it, piece by piece, as they implement the platform.
A new suite of products, based on solutions developed by LION as part of customer collaborations, is planned to go on sale later this year and will expand LION's position from its traditional focus on bioinformatics into the cheminformatics area.
The company's Lead Engine - used for handling data from in silico screening, lead optimisation and ADME-Tox (absorption, distribution, metabolism, excretion and toxicology) - should be on the market in the summer, said the spokesman. And the first major update (v1.1) of Target Engine will also materialise around that time, along with the next (v8.0) version of SRS.
The new modules and products will be based on an open architecture and are expected to allow the integration and analysis of data generated throughout the entire R&D process, including clinical data.
However, LION's other packages - iDEA pkEXPRESS for in silico predictive ADME and the SolutionCenter, while still in the company's catalogue, are now considered non-core. LION is hoping to find a partner to take the products forward.