NEW YORK, Oct. 24 – A limping economy set back Applied Biosystems’ profit by 34 percent in the first quarter while reduced research spending shrank Celera Genomics’ losses in the period, the companies said separately on Wednesday.
However, Celera said it was expecting sales growth of between 40 percent and 50 percent in the new fiscal year, which for it began on Oct. 1, as it signs on new customers for its gene database. Applied Biosystems, meanwhile, has targeted a growth of between 7 percent and 9 percent, Celera said.
Both companies are units of Applera.
Total profit for Applied Biosystems, of Foster City, Calif., fell to $32.2 million, or 15 cents a share, in the period ended Sept. 30, from $49.1 million, or 22 cents, year over year, the company said in a statement.
Revenue rose 1 percent to $366.6 million from $363.6 million a year ago. Analysts had expected the company to make between 10 cents and 16 cents a share, the firm added.
Despite the earnings report and outlook, Applied Biosystems' shares moved up 75 cents, or 2.73 percent, to $28.25, a development due in part to the new products the company intends to introduce in 2002.
Michael W. Hunkapiller, president of Applied Biosystems, attributed the slump in revenue to last year’s performance. Specifically, he said that growth in the first quarter in the current year was affected by various factors, including the “fallout” from the Sept. 11 hijacking attack on the US.
“These factors include substantial revenue in the first quarter last year from the 3700 DNA analyzer, higher license fees last year, and higher revenue from Celera Genomics in the same period,” Hunkapiller said in a statement. “Despite the slowdown in capital spending, sales of the ABI PRISM 3100 genetic analyzer were up approximately 75 percent in the first quarter compared to last year, and that revenues from its mass spectrometers increased approximately 80 percent, he added.
“In a difficult economic environment, Applied Biosystems' revenue growth was in line with our expectations after taking into account disruptions from the heinous acts of terrorism committed Sept. 11,” Tony White, CEO of Applera, said in the statement. “We continue to be cautious about the short-term environment for Applied Biosystems, and Sept. 11 and its aftermath add a new level of uncertainty for our business as they do for most businesses.”
“Longer term, we remain optimistic about our business prospects once we work through comparisons with last year's unusually strong performance and the transition to new mass spectrometry instruments,” White added.
Celera, of Rockville, Md., saw its fiscal first-quarter loss narrow to $15.6 million, or 25 cents a share, from $25.7 million, or 43 cents in the year-ago period, it said in its statement. Revenue nearly doubled to $27.3 million from $18.3 million a year ago.
The company said it plans to increase R&D spending next year to between $165 million and $180 million, up from a previous forecast of $145 million to $160 million.
“Celera is leveraging the genomic information it has produced to identify new candidate therapeutic targets and diagnostic markers,” J. Craig Venter, president and chief scientific officer at Celera, said. “Forthcoming data from our genome resequencing project should provide us with additional insight into the association of genetic variation with disease.”
For the resequencing project, Celera has been sequencing the genomes of 40 to 50 patients to identify disease-related SNPs and haplotypes. For its part, Applied Biosystems will develop reagent sets using data culled from that research to sell to researchers, and Celera Diagnostics, Applera’s newly created unit, will build an industrial-scale genotyping facility to perform disease-association studies and search for genetic markers associated with specific diseases.
“During the past quarter, our biologics group generated a number of immunogens and antigens which we plan to use to produce antibodies against candidate protein targets which may be relevant in lung and pancreatic cancer,” Venter added. “This effort may lead to the validation of some of these proteins as potential targets for antibody and cellular immunotherapies, and should prepare us for future research on a larger scale, utilizing antibodies to validate differential expression of proteins identified through genomics and proteomics.”
According to their statements, both units are hoping that demand for technology will increase as personalized medicine inches closer to becoming a reality.
Shares in Applied Biosystems were up 42 cents at $27.92 in late-afternoon trading, while Celera stock was up 40 cents at $26.30. Both companies trade on the New York Stock Exchange.