Accelrys, Inc. (ACCL)

Not looking too hot, gotta say RED

Accelry’s (ACCL) engages in design, development, marketing and support of software and related services which is helpful in the discovery and development of new and improved products and processes in the pharmaceutical, biotechnology, chemical, petrochemical and materials industries. The company markets its products and services worldwide, principally through its direct sales force, augmented by the use of third-party distributors with prime customers being commercial, government and academic organizations.

The company has been incurring losses for the past six years except for the three months ended March 31, 2004. The company has the history of losses and future profitability is also uncertain, as it has recently reported losses for the three quarter of fiscal 2007 also.

Additionally the market for molecular modeling and simulation products in the pharmaceutical and biotechnology industries is expected to be challenging due to the maturity of the market, industry consolidation, reducing level of discovery research activity and increased competition. This adds to the concern of the company as the company has been primarily involved into the sales of molecular modeling and simulation software in these markets. Though, ACCL is diverting towards chemical, petrochemical and materials industries, it will take some time before the company creates a position in this markets.

The company has recently announced that it will close its research and development facility in Bangalore, India as the management thinks that Accelrys is better suited to concentrate its new science efforts within its Cambridge and San Diego centers. This is expected to adversely affect the performance of the company as this center contributed greatly to the acceleration of its modernization process. Looking at all these developments that are expected to hamper the company’s growth prospects, the stock is expected to follow the suite.