By Malorye A. Branca

July 14, 2004 | It may look much the same from the outside, but Pharmacopeia has undergone a dramatic reorganization. In May, the company spun out its eponymous drug discovery unit, while keeping the corporate shell and the name Accelrys for its software and services business. Both businesses are now free to succeed or fail by their own right.

With that new freedom, Mark Emkjer, Accelrys’ new CEO, hopes to reinvigorate his company. “The holding company concept is very expensive, and Accelrys had to pay a big part of that,” he says. Emkjer became head of the software business last year. “Frankly, I would not have joined if something like this wasn’t going to happen,” he says.

Pharmacopeia began as a drug discovery and development company and later added a software division. That division, once called Molecular Simulations Inc. (MSI), was aggressively grown through multiple acquisitions that were not well integrated, and left the company with a fragmented business. For example, Emkjer says, “We had 34 contractual vehicles. We’re moving to four to five.”

Emkjer, whose background is healthcare software, says the biggest eye-opener for him was realizing how much home-grown software is used in biological and chemical computing. “I’ve never competed against open-source software before,” he says. “It’s a challenge for us and the clients.”

The fact that the field is nascent, he says, also creates opportunities for pioneering firms such as Accelrys. Calling the reorganization “a turnaround -- let’s not hide that,” Emkjer says that he has visited more than 60 Accelrys clients already and that the new company will follow its customers’ needs much more closely. It will take a few years to see the biggest effects on revenue, but he’s convinced that advances will be obvious to both clients and investors during that time.

The company has already opened a new research and development center in Bangalore, India, adopted new financial management software from Oracle, and tripled the number of staff working on quality control. The biggest question will be “how to grow,” and Emkjer suggests a heavy reliance on collaborations and possibly acquisitions. “I can’t promise anything,” he says. But Accelrys has plenty of cash, and Emkjer has overseen many such transactions in his career. “We’re active,” is all he will say.