Celera Genomics cuts losses in 2nd quarter

Rockville company puts focus on developing drugs

January 24, 2003|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Celera Genomics Group said yesterday that its fiscal second-quarter loss was reduced from last year's as the Rockville-based company focused more on developing drugs.

Celera reported a net loss of $16.1 million, or 23 cents per share, for the quarter, compared with a loss of $117.9 million, or $1.82 per share, in the corresponding quarter a year earlier.

Revenue for the quarter, which ended Dec. 31, decreased to $22.9 million from $35 million in the corresponding quarter a year ago.

The company, best known for sequencing the human genome, blamed the loss on its decision to leave the gene business to develop drugs.

In October, the company purchased from Bayer AG pre-clinical drugs to treat asthma. Celera also is pursuing a program to create anticoagulant drugs, or those used to reduce blood clotting.

"We have recently directed more resources to the advancement of internal drug development efforts, including our most promising projects targeting asthma and anticoagulation," Celera President Kathy Ordonez said. "We are currently finalizing a business plan that delineates how we will expand our in-house development and clinical capability and advance these and other drug- discovery programs."

The earnings include a $2.9 million asset write-off associated with the company's gene- sequencing facility in Rockville.

Analysts said it will take time for Celera's drug-making business to make money.

"You can't get substantial revenue until a drug gets on the market," said Winton Gibbons, biotechnology analyst with William Blair & Co. "The drug business may not generate sufficient revenue for at least eight years to be profitable by itself. But that's common with biotech companies."

Gibbons said the other two business components of the company are making a profit or close to it.

Its online information business, a collaboration with Applied Biosystems Group, brought in revenue of $20.3 million, compared with $17.3 million in the second quarter of last year. Celera's diagnostic business is expected to turn a profit by 2005 or 2006.

Celera officials also said yesterday that they expect total revenue this year of $85 million to $95 million.

Celera's stock jumped 20 cents, or 2.08 percent, to close at $9.80 yesterday on the New York Stock Exchange.

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