Ebb & Flow

Lion bioscience (FSE:LIO) was Europe's biggest-ever biotech IPO - the company raised E227.9 million ($205.5 million) in August 2000 on the promise of its bioinformatics business. Within a few weeks, the stock more than doubled to E100.50 from its IPO price of E44.

That's about where the party ended. Since then, the stock has been on the decline and, for the past year, LIO has been reorganizing (see "Lion Chronicles").

Last week, LIO closed the book on its bioinformatics business and sold the asset to BioWisdom for up to E4 million ($4.8 million). The is a far cry from the heady days when, for example, LIO received about E50 million from Bayer (FSE:BAY; BAY) under a 1999 bioinformatics deal that ended in mid-2004.

Although LIO doesn't break out the bioinformatics business on its revenue line, the figure has been waning. For the last two years, bioinformatics sales have been accounted for under revenue from discontinued operations. For the year ended March 31, 2005, that amounted to E9.7 million, down 50% from E19.4 million in the same period the previous year.

BioWisdom, however, thinks there's mileage left in the bioinformatics business. The key, said CEO Gordon Baxter, will be combining LIO's SRS data integration software with BioWisdom's products for indexing and analyzing biomedical data. "SRS allows us to have our data feeds brought to a single point," he said. "From there, our technology can reformat a lot of the gathered information into an Intelligence Network, and SRS will also help distribute that to desktops."

In addition, Baxter told Ebb & Flow that BioWisdom will inherit more than 300 academic and industry customers who are using SRS. BioWisdom hopes to release a beta version of SRS that includes BioWisdom's technology this year, with a full launch in 2007.

LIO plans to update investors on its future strategy in the next couple of weeks. CFO Peter Willinger, the

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