R&D costs led to recent loss, Celera says

Drop in 3rd quarter doubles year-ago figure

Biotechnology

April 27, 2000|By Julie Bell | Julie Bell,SUN STAFF

Celera Genomics Group, the Rockville-based unit of PE Corp. best known for its work sequencing the human genome, said yesterday that multimillion-dollar increases in its research and development costs pushed its fiscal third-quarter loss to $24.1 million -- nearly double that of the year-ago quarter.

But PE Corp. Chief Executive Officer Tony White told Wall Street analysts in a conference call that the company expects to begin efforts to attract customers for its genetic-information databases within the next six months to a year, after sequencing of the genome is completed.

"We're still in the middle of building and developing the product, [rather] than spending a lot of time trying to sell it," White said. "We'll probably reduce the investment in the human genome in the next several months and hopefully see expenses be less than the sales."

Essentially, the human genome contains all the genetic information necessary to build and operate a human body.

Celera intends to make money by selling the information to pharmaceutical companies, university researchers and others trying to develop gene-based remedies for everything from cancer to heart disease.

Celera also plans to build refined genetic-information databases, allowing medical researchers to look in detail at certain portions of the genome. For that reason, the company said, it will continue to have significant research and development expenses.

For the quarter that ended March 31, the company reported revenue of $11.1 million, compared with $1.8 million a year ago, primarily related to increases in its subscription revenue. Celera makes money by selling its genetic maps to pharmaceutical companies and others.

Celera's net loss after taxes was $24.1 million, or 45 cents a share, compared with $12.8 million, or 25 cents per share, for the corresponding quarter a year ago.

Research and development costs rose to $43.5 million, up from $13.3 million.

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