NEW YORK, April 22 - Shares in Celera Genomics and Applied Biosystems today were lashed after the companies announced a new business strategy that gave ABI marketing and distribution control of Celera's Discovery System.
Also today, Credit Suisse First Boston cut its rating on Celera to a "hold" from a "buy," sending shares tumbling to their lowest level in 2 1/2 years: Celera stock closed down $1.47, or 7.6 percent, to $17.90 on the Nasdaq, surpassing its 52-week low of $18.16. Shares in ABI, meanwhile, fell $2.00, or 8.6 percent, to close at $21.39.
"We believe that this new arrangement transforms Celera from a current revenue generator to a very early stage drug discovery company, and in so doing, reduces the current value of the company," Credit Suisse said in its research note. "We are therefore downgrading the stock from a Buy to a Hold and lowering our price target from $25 to $20."