Celera teams with Geron Corp.

Effort is to identify genes at work in stem cells

Biotechnology Celera, Geron collaborating in gene-identification effort

June 13, 2000|By Julie Bell | Julie Bell,SUN STAFF

Celera Genomics Group announced yesterday that it would collaborate with Menlo Park, Calif.-based Geron Corp. to identify genes at work in stem cells - the cells from which all other cells in the body develop.

Once those genes and their functions are identified, Geron will be free to develop drugs and diagnostic tests based on them. And Rockville-based Celera will put the information in databases it sells to pharmaceutical companies and scientists researching cures for disease, giving them information about which genes are involved in human development and what they do.

Financial terms of the agreement were not disclosed, but Celera Chief Medical Officer Samuel Broder said the company stands to get a cut of the profits from any treatment designed using knowledge generated from the collaboration.

Celera, a unit of Norwalk, Conn.-based PE Corp., also plans to use the knowledge to develop and sell "probe sets" - perhaps through sister company PE Biosystems - that would allow medical researchers to analyze what genes are at work in various circumstances.

The deal brings into sharper focus how Celera plans to use the genome as a platform for building a business of selling genetic information. Some critics have questioned how Celera could make money by assembling the order and number of chemical letters that make up the human genome; the company, they contend, also needs to be able to identify specific genes and what their functions are.

"These are important just because of the naysaying," William Blair & Co. analyst Winton Gibbons said of the deal with Geron and another collaboration announced in the fall with Cambridge, England-based Gemini Research, which is working with Celera to discover genes and genetic variations associated with age-related diseases. SG Cowen analyst Eric Schmidt, however, said he thought the collaboration was not particularly meaningful for either company, at least in the short run. "Without money changing hands, I don't think that's the kind of thing investors will get excited about," Schmidt said.

Geron is perhaps best known for funding the research through which scientists were able to grow human pluripotent stem cells - the human cells from which all others evolve.

The research by Dr. John D. Gearhart at the Johns Hopkins School of Medicine and Dr. James A. Thomson at the University of Wisconsin-Madison is licensed to Geron and is considered a foundation for studying how human tissues respond to new medicines and, potentially, even growing new tissue for transplantation. The research was controversial because the stem cells isolated in the experiments were obtained from aborted fetuses or embryos left unused in fertility clinics.

"Aging, Alzheimer's disease, issues related to regeneration of organs that have been damaged - all are affected by this kind of research," Broder said in an interview yesterday. "That knowledge will be incorporated into Celera's databases."

Geron Chief Executive Officer Thomas B. Okarma estimated that there will be a 12-month to 18-month discovery process before any discoveries are licensed to third-party pharmaceutical companies or others. But Okarma described the collaboration as "a major step forward" for his company.

"We obviously talk to a lot of players in genomics," he said. This collaboration represents "the best of the genomics people with the best of the stem-cell people."

Shares of Geron rose $3.875 - or 14.76 percent - to $30.125 on the news. Celera's shares dropped $1.25 to $107.

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