Celera shares spurt again

8.5% higher at close after 22% leap on talk of DNA breakthrough

Stocks in spotlight

June 07, 2000|By Julie Bell and Douglas Birch | Julie Bell and Douglas Birch,SUN STAFF

Shares of Celera Genomics Group posted strong gains yesterday amid a broad recovery in the biotechnology sector and speculation that the Rockville-based company soon will announce it has created the first complete description of human DNA.

The stock rose as much as 22 percent before settling for an 8.5 percent advance in regular trading yesterday on the New York Stock Exchange.

As the stock rose, Celera President J. Craig Venter and a one-time colleague turned recent rival, Dr. Francis S. Collins - who now heads a publicly funded project that also is racing to map the human genome - surprised onlookers by smiling for cameras and joking with one another during an appearance at the National Institutes of Health.

The two coyly demurred when asked if they were negotiating a last-minute agreement to finish the job together. But they are quietly talking about sharing data and credit for the work, a source close to the negotiations confirmed.

The appearance yesterday was part of a meeting with other researchers on the genetics of cancer. Venter is scheduled to speak again today before a joint congressional committee on the economy, continuing a highly public week that has featured him on the cover of Business Week and in a profile in New Yorker magazine.

Simultaneously, shares of Celera have risen nearly 54 percent since Friday's close, finishing at $105.25 yesterday and capping a rally in which they have risen some 202 percent since Dec. 14.

Celera has said repeatedly that it expects to complete assembly of the genome this month. Jim McCamant, editor of Berkeley-based Medical Technology Stock Letter, said there was no doubt that speculation about an imminent announcement was driving Celera's stock and taking the rest of the biotechnology sector with it.

But some analysts disagreed, saying an overall resurgence in biotechnology stocks in general is pulling Celera along.

SG Cowen analyst Eric Schmidt said many investors are flocking back to biotech following indications that the economy is making a soft landing in the wake of intervention by the Federal Reserve. Some of those investors, who took refuge in stocks such as pharmaceuticals, perceived as less likely to be hardest hit in a recession, are pouring back into biotech stocks.

The Nasdaq biotechnology index has rebounded, rising 3 percent to 1,086.12 yesterday. The index has risen nearly 6 percent since Friday's close and is up 62.5 percent since its six-month low of 668.29 on Dec. 9.

"If you look at genomics stocks in general ... there is clearly renewed interest" on the part of investors, Schmidt said, noting that biochip maker Affymetrix of Santa Clara, Calif., and Salt Lake City-based Myriad Genetics both posted gains substantially greater than Celera's yesterday.

Talks between Celera and the publicly funded project run by Collins have been sporadic for nearly two years. And each time, they've broken down over matters of pride and principle. Back in February, Collins and other consortium leaders complained scathingly that Venter had snubbed them, then went on to accuse him of "trying to establish a monopoly on commercial uses of the human genome sequence."

None of that hostility was apparent yesterday.

Collins, director of the federal National Human Genome Research Institute, praised Venter for his "terrific" work.

"We've learned a lot from Dr. Venter and others" said Collins, who once predicted that Celera would produce the Mad magazine or Cliffs Notes equivalent of DNAs so-called Book of Life.

Venter, who once called Collins "vindictive," described the NIH scientist yesterday as more of an ally than a competitor. "I think it's a race to move ahead in understanding."

Venter predicted yesterday that Celera will finish the job early this month. At the same time, the consortium is expected to make the more modest claim that it has created a rough draft of the genome, containing 90 percent of the data in human DNA. Celera announced in January that it had hit that milestone.

If the genome were a book, Celera could be said to be near completion of an abridged edition that leaves out many repetitive and garbled parts, but with a readable text. The consortium, which ultimately aims to publish an unabridged genome, appears ready to publish a book with most of the same text as Celera. But while all the sentences will be in the correct chapter, they won't necessarily be in the right order.

Both sides could benefit through collaboration. The consortium wants access to Celeras data, which is private. Celera is building its genome with the help of data published by the consortium. But company scientists want to see more detailed information that has not been made public.

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