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For Celera the Hunt--and Heat--Is On to Replace Venter

NEW YORK, Jan. 23 - Running The Institute for Genomic Research really must be the best job on Earth.

 

Why else would Craig Venter, who made that remark in a GenomeWeb interview last spring, turn his back on Celera Genomics in order to spend more time across town as TIGR's chairman?

 

"None of the moves I've made [in my career] have been calculated," Venter said in that interview. This latest one appears to be on a par.  

 

One month shy of the one-year anniversary marking the publication of his sequence of the human genome, and in the midst of a broad and risky business transition that's been in the works since the company was founded, Venter has stepped down as Celera's president.

 

His move, which some believe has been brewing for six months, leaves the company he helped create in a bit of a lurch. Leaving so abruptly--without even the hint of a replacement--has filled the industry with rumors and has prompted front-page accounts in newspapers around the world.

 

Venter's departure also triggered Celera stock to fall 6 percent on the New York Stock Exchange on Tuesday afternoon. Shares have since regained most of that ground, closing up $1.10, or nearly 5 percent, at $23.40 on Wednesday. Separately on the business side, Celera on Wednesday reported narrowed losses in the second quarter atop increased subscriptions to its online database.

 

Venter's feelings for the private sector is well known. He has little patience for the demands of board members and stockholders and their fixation on the bottom line. TIGR President Claire Fraser, who is also Venter's wife, said as much in an interview during the institute's annual conference in October:

 

When her husband was president of TIGR and was thinking about leaving to start Celera, Fraser said she urged him to remember his last experience with the private sector--a troubled relationship between TIGR and Bill Haseltine's Human Genome Sciences.

 

"I said, 'Haven't you learned anything?" Fraser recalled saying. "'Why would you want to do anything in terms of a company again?' And he said, 'No, no, no, it will be great. It will be different.'"

 

Assuming Venter did leave Celera, what if he were to show up at TIGR's doorstep asking for his old job back?

 

"No," said Fraser. "There's no way. TIGR isn't big enough. If he wants his old job back I'm going to raise poodles."

 

Three months later Venter left Celera. And though he may not be pining for his old job he has promised to spend more time as TIGR's chairman.

 

For now, Venter is rumored to be sailing in the Caribbean and not likely to chat with journalists about his next move.

Follow the leader

 

Some industry insiders have questioned what Venter's stalwarts at Celera plan to do now that the man who recruited them has left. Will these scientists--top-drawer genomic researchers and bioinformaticists such as Gene Myers, Mark Adams, and Hamilton Smith--remain at a company whose core is shifting underfoot? Or do these scientists represent the second shoe about to drop?

 

"While [Venter] was a magnet for certain scientific talent, I don't think there's going to be a retention issue," said Winton Gibbons, an analyst who covers Celera for William Blair & Co., in Chicago. "There might be a recruitment issue, but that's not necessarily going to be a problem given the kind of people they're recruiting now, which are more in the drug-discovery realm than the genomics realm.

 

"I don't think that [Venter's stalwarts] would leave until Venter sets up another business, and even then they'd only leave if they were appropriate for that business," said Gibbons. "And I don't think that that's going to happen short term."

 

Myers is traveling and was unreachable for comment. Adams and Smith did not return telephone calls.

 

To be sure, Venter isn't abandoning Celera. As of September 2001, Venter, 55, owned nearly 3 percent of the company and now intends to hang around and oversee its scientific advisory board. Granted, this is not a full time job, and certainly not the kind of gig that will satisfy Venter, a confirmed workaholic. (Though a source close to Venter told GenomeWeb that he doubted Venter would go off and start a new company.)

 

In addition, industry experts are convinced that he left only after ensuring that the company could be run without him. In the meantime Applera CEO Tony White has been scouring pharmaceutical and biotech shops for someone with the right ego and requisite talent to occupy Venter's corner office in Building 1.

 

A good chunk of Celera's value is its potential for changing the way pharmaceuticals are developed. Someone with too much experience running a pharma shop, ironically, might not be right for the job. 

 

"It obviously would have to be a person with experience running a pharmaceutical company, but it should not be a run-of-the-mill pharma executive," said one analyst. "I would expect somebody who has pharmaceutical experience but who might not be in a mainstream form--say, a pharmaceutical person who spent some time in diagnostics."

 

"In other words, they need somebody who has a greater sense of urgency than the traditional pharma player," that analyst said.

White at the helm

 

Until Celera names a replacement, which experts say may take more than a year, White has agreed to run the firm. In the weeks leading up to Venter's announcement, in fact, the Applera head has been seen prowling the halls at Celera's Rockville, Md., headquarters as he tries to learn the ropes.

 

To be sure, White has neither the experience nor temperament requisite for running a science shop. In fact, some insiders speculate that White's impatient, bullish manner is one reason behind Venter's decision to leave. The other reason, of course, is Venter's equal lack of experience.

 

As successful as White has been leading Applera's corporate threesome--Celera Genomics, Celera Diagnostics, and Applied Biosystems--doubts remains that he has the acumen to guide the company successfully through its transition.

 

Skeptics say that Celera's past success does not guarantee future success as a drug developer, especially since neither White nor Venter has ever developed a drug. Celera is already behind its own timeline. In February last year, White said that the company would need the rest of the year to put its drug-development strategy in place and to decide where to start its research. Now into the new year, Celera does not even have a head.

 

Some maintain that Venter would have been the ideal candidate to lead Celera through its transition. And though he may lack the chops to run a pharma company, Venter is smart enough to learn on the fly.

 

"I think [Venter] is capable of taking Celera to the next step ... into drug discovery," said Erick Noensie, an analyst who covers Celera for Thomas Weisel Partners. Noensie cited for comparison the heads of genomic tool or technology firms, like Human Genome Science's CEO William Haseltine, who have successfully guided their companies downstream.

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