Symyx Cuts Outlook and Changes Business Model
On its conference call, Symyx explained that the aftereffects of pharmaceutical consolidation as well as more complex decision-making procedures at drug companies are delaying software purchases. As a result, Symyx plans to grow its Software business by providing products to a broader base of customers, who make smaller-sized purchases. Symyx ‘s Collaboration business has suffered from the chemical industry’s willingness to share royalties for “strategic collaborations,” but not for “tactical advances.” As a result of these changes, Symyx is doubling its direct sales force to 35 sales managers and field-support personnel and is changing its product portfolio, including developing more modular automation systems for its Tools business.
Santa Clara, CA 3/16/07; 4/25/07—As part of its first quarter earnings announcement, Symyx Technologies stated that due to market changes it is lowering its 2007 guidance and changing its business model. The company lowered its guidance for 2007 revenues from $133–$140 million, made in February, to $110–$120 million, and its guidance for net income from $0.33–$0.38 cents per share to a loss of $0.04–$0.06 cents per share. “We are seeing some adjustments in certain of our key markets that will make 2007 a transitional year for the Company. As a result, we are revising our 2007 guidance downward,” stated President Isy Goldwasser. “For example, although interest in our products and services remains high, consolidation in the pharmaceutical industry and the traditionally long lead time often associated with our transactions are creating short-to-medium term pressure on our performance.” On the same day, Symyx announced Mr. Goldwasser would replace Steven Goldby as CEO effective June 12. Mr. Goldby was named executive chairman. In March, Symyx announced COO Paul Nowak would leave the company in May and named president-level heads for each of its three business areas, Tools, Software and Collaborations.
