It has been a gruesome year for shareholders of Symyx Technologies (NASDAQ:SMMX), which develops technologies to manage research and development projects for chemical and life sciences companies. So far this year, the stock price has lost about half its value. Unfortunately, Symyx's prospects still look murky.

For fiscal Q3, Symyx's revenue was $26.1 million, which fell 11.8% from the same period a year ago. Earnings per share came to a robust $0.73. But keep in mind that there was a large gain from the sale of its Ilypsa equity interest to Amgen (NASDAQ:AMGN).

To bolster its market position, Symyx recently shelled out $123 million to buy assets of MDL Information Systems. The deal brings new products -- such as collaboration, information management, and databases -- as well as more than 1,000 customers. 

Symyx is planning to go through a restructuring to try to save $20 million per year. At the same time, the company plans to integrate the two product lines and sales organizations, which can be prickly in tech deals.

Unfortunately, MDL has had a spotty performance over the past three years -- with revenues of $85.5 million, $90.3 million, and $81.9 million (as of 2006). Why? One reason could be the possible neglect that came with being part of a large company. Another consideration is that MDL's software is complex and focused on large customers.

In fact, Symyx is facing the same issues. For example, its contracts with ExxonMobil (NYSE:XOM) and Dow Chemical (NYSE:DOW) will expire next year -- and both companies represent around 60% of revenue. The revenue shortfall could be about $20 million.

In light of all these issues, it's understandable why investors are skeptical. No doubt, Symyx has a lot of work ahead and it's far from clear how things will turn out. So, for Foolish investors, it's probably best to pass on this stock for now.

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