Celera expands mission to drugs

Gene database firm sees future in protein

Biotechnology

July 28, 2000|By Julie Bell | Julie Bell,SUN STAFF

Celera Genomics Group intends to start a drug-discovery business through which it will find proteins that could be used to fight cancer or other diseases, company executives said yesterday.

Though Chief Executive Officer Tony L. White said the company is unlikely to become a full-blown pharmaceutical company, Celera's discoveries could be sold to drugmakers through licensing agreements, and the company get royalties from any related products sold. The Rockville company, which last month celebrated the all-but-complete sequencing of the human genome, was formed as an information company that sells subscriptions to its genomic databases.

Subscriptions lately have been picking up, with Immunex Corp. and Harvard University signing up, among others.

But yesterday on an earnings conference call with analysts, and again afterward in an interview, White said the company is focusing on expanding its business plan, using the information business as a financial base.

The comments brought into sharper focus a concept Celera President J. Craig Venter and White have been discussing publicly in less specific terms for the past month.

"I think we always knew that one of the best long-term options for Celera was to be a discovery company - a company that could lead to new drugs, new therapies, new diagnostics," said White, who also is CEO of Celera's parent company, PE Corp., of Norwalk, Conn.

Though Venter said in the conference call that Celera conceivably could become more than a discovery company - one that handles at least a portion of the testing and marketing of a drug - White later all but ruled out that prospect.

"The only reason I would create it is if I couldn't get a fair deal from the people already [doing it]," White said.

The company doesn't lack money to pursue its goals: Yesterday, Celera reported cash and short-term investments of $1.1 billion.

Net loss of $92 million

For the fiscal year that ended June 30, the company reported revenue of $42.7 million, vs. $12.5 million in the comparable period a year ago. Celera reported a net loss of $92.7 million, or $1.73 per share, after benefit for taxes, compared with a loss of $44.9 million, or 89 cents a share, last fiscal year.

For the fourth quarter, revenue was $15 million compared with $5.1 million in the quarter a year earlier. The net after-tax loss was $24.9 million, or 43 cents a share, vs. a loss of $19.9 million, or 39 cents per share.

Celera shares fell $2, or 1.94 percent, to $101, in trading yesterday on the New York Stock Exchange.

Machine to play key role

Any decisions about how to progress await discoveries Celera has yet to make. Those discoveries largely will depend on a new machine being developed to study the structure of proteins. The device is being developed by sister company PerSeptive Biosystems.

If the machine works as planned, Celera is likely to build a high-volume protein research lab akin to the vast, 300-machine DNA sequencing factory it uses to decipher the human genome.

The plan in some ways is a natural progression for Celera, whose genome-sequencing project has outlined nearly all the DNA in the chromosomes of human cells. But all but about 5 percent of the genome is made up of genes, the body's direction givers. Genes order proteins into action, and Celera hopes to understand these actions to find new treatments for disease.

Now, with the recent hiring of Chief Operating Officer Peter Chambre, the former CEO of drug-discovery company Bespak PLC, Celera is putting together a plan for how it will focus drug-discovery efforts.

One plan involves focusing on different disease states, such as cancer, and finding antibodies that potentially could fight the disease. "If we have the kind of capability we think we have, we might be able to shift the paradigm on what's possible in cancer," White said. "We're going to swing for the fence, even if that's a risk."

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