This article has been updated from a previous version.
NEW YORK, July 2 - The future of an R&D collaboration between Celera Genomics and stem-cell company Geron has been cast into doubt after Geron laid off roughly one-third of its staff and since both companies have refocused their research initiatives, GenomeWeb has learned.
Moreover, if Celera chooses to abandon the partnership, Geron may seek to strike a similar deal with a competing genomics-tool shop that would pick up where Celera left off.
"Clearly, with the cutbacks at Geron and at our company, and with the changes here and there, it's likely going to have an impact on the relationship," a Celera official said on the condition of anonymity. "We're going to sort out our future direction [with Geron] very soon."
The collaboration, struck in the summer of 2000, sought to use Celera's gene-discovery tools and bioinformatics chops to discover genes expressed in human pluripotent stem cells held by Geron.
The companies hoped that by marrying their technologies, white-hot at the time, they would be able to develop a host of small-molecule drugs, protein therapeutics, gene-therapy products, and prenatal diagnostics.
But as gene-database companies slowly fell out of favor on Wall Street, and as stem-cell firms found it difficult to parlay their technology into novel drugs or diagnostics, the partners separately found it necessary to change game plans.
In mid-June, Celera laid off 132 of its staff as it continued to shed its gene-sequencing and database clothes in favor of newer drug-discovery duds. About two weeks later Geron, based in Menlo Park, Calif., cut 43 of its employees and support staff to help trim costs and focus more intently on experimental cancer drugs, it said.
David Greenwood, Geron's chief financial officer, insists that despite the changes at both firms the collaboration is still "in place."
"We got out of it what we set out to do," said Greenwood, referring to the database of human stem-cell genes that he said resides with Celera in Rockville, Md. "Our next step [with Celera] is to refine the informatics and to select targets" based on their discoveries. (Celera could not confirm at deadline that it is in fact in possession of the database, or if the database, like the Celera Discovery System, was given to Applied Biosystems.)
Asked if Geron would seek to partner with another company if Celera decides to abandon the partnership, Greenwood said that "there are still functional-genomics companies out there. I suppose that [hooking up with one of them] is an option."
He added: "We think about ... [bringing an board a Celera or ABI competitor]. But there have not been any formal discussions" with other firms.