Celera Genomics offeringreaps $820 million

Company cashes inon biotech run-up


March 02, 2000|By M. William Salganik | M. William Salganik,SUN STAFF

Cashing in on the superheated market for biotechnology stocks, PE Corp.'s Celera Genomics Group said yesterday that it has sold 3.8 million shares in a $225-a- share secondary offering.

The Rockville gene-mapping firm raised $820 million after expenses and fees.

When Celera announced plans for the secondary offering a month ago, it proposed marketing 1.6 million shares. With the stock selling then for $202 a share, that would have yielded about $320 million.

Celera helped trigger the biotech run-up when its president, J. Craig Venter, announced in January that it had completed 90 percent of a map of human genes, and expects to finish the project in the summer. Celera has been racing the federally funded Human Genome Project to complete the first blueprint of human genes. Celera reached another landmark Feb. 18 when it announced that it had completed a genetic blueprint of the fruit fly, an organism frequently used in genetic research.

Once the human genes are mapped, Celera plans to sell the information to drug firms for use in developing a new generation of pharmaceutical products.

Celera was created in 1998 by PE Corp. of Connecticut, a manufacturer of DNA research equipment, and began trading as a tracking stock in April. At the time, investors were cool to biotech offerings, with Celera trading below $7.50 a share (adjusted for a subsequent split) as recently as June.

The recent biotech fervor has come despite a lack of profits. Celera lost $47.3 million, on revenue of $16.6 million, in the six months that ended Dec. 31, the first half of its fiscal year.

"My personal opinion is that these valuations are crazy," Fredrik Tjernstrom, an analyst at Hidden Asset Report in New York, said yesterday. He said he had recommended the stock during the summer at a price of $10, with a target of $25, "but I cannot justify why it would go up from here."

Celera planned the offering primarily to support future research and development, though it said it also might use some of the money for acquisitions.

Celera stock closed yesterday at $235.50 a share, down $8.50.

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