Pharmacopeia plans to spin off its drug discovery operation to stockholders, after which it will continue in the scientific software business under the name of its current software subsidiary, Accelrys.
CEO Joseph A. Mollica says the spin-off of the Pharmacopeia Drug Discovery (PDD) subsidiary will address "difficulties" in Pharmacopeia's current corporate structure by creating two "pure play" companies that can better focus on objectives and pursue acquisitions and investments.
Mark J. Emkjer, Accelrys' president, will become CEO of the software company. Mollica will serve as CEO of PDD until a successor is appointed.
Philip Nadeau, health care industry stock analyst with S. G. Cowan, says the recent progress of PDD collaborations with Bristol-Myers Squibb and Daiichi in Phase I clinical trials may have convinced management that PDD is ready to stand on its own.
Last year, Pharmacopeia halted a deal to acquire Eos Biotechnology, one of several growth strategies the company considered over the past two years, according to John J. Hanlon, chief financial officer.
Pharmacopeia's Accelrys unit generated revenue of $95.1 million in 2002. PDD revenue in 2002 reached $29.3 million. Pharmacopeia posted an overall loss of $11.6 million that year.