NEW YORK, April 26 - Celera said Thursday its third-quarter fiscal 2001 revenues rose to $23.4 million, from $11.1 million in the year-ago period, as the company continued to add subscribers to its database and to initiate new collaborations.
This quarter’s doubling in revenues over the previous year’s quarter continued a trend that began in Celera’s first fiscal quarter. With this continued upsurge, Celera said it was still on track to double its revenues by the end of the year.
“For fiscal year 2001, we continue to see year-to-year revenue growth,” said Dennis Winger, chief financial officer of Applera, Celera’s parent company. “We have seen new biotech and commercial customers for the online database.”
In addition to 10 new subscribers announced during the quarter, Celera said Thursday it had just signed on two new academic subscribers, The Ludwig Institute for Cancer Research, and Spain’s Biomedical Consortium for Data Access. This brings the number of subscribers to over 40, the company said.
But Celera executives emphasized in a conference call to discuss the quarter’s financial results that the company was de-emphasizing focus on subscriptions and ramping up R&D as it undergoes a transition from a database business model to a drug development business model.
“As we shift the emphasis at Celera away from our first phase of business to build a new database, and recover our investment through the subscription services, one of the things we’re taking a really hard look at is how we want to define that business,” said Tony White, Applera’s CEO. “The next phase of the company’s life is to get deeply involved in the discovery and development of therapeutics.”
During the quarter, the company’s expenses rose significantly, to $78.2 million, from $54 million for the year-ago quarter. This increase included greater R&D expenses, of $52.2 million, compared to $43.5 million for the first quarter of 2000; as well as $15.1 million in selling, general, and administrative expenses compared to $10.5 million for the year-ago quarter. The company also recorded $10.9 million in goodwill and other intangibles this quarter, related to the acquisition of Paracel.
The company reported widening losses of $29.1 million, or 48 cents per share, compared to $24.1 million for the previous-year quarter. These losses, however, beat Wall Street’s expecations of 57 cents per share, according to a poll of 11 brokers conducted by FirstCall/Thomson Financial.
In the fourth fiscal quarter, Celera said its R&D expenses would continue to increase as it scales up its proteomics factory and moves toward full capacity.
Proteomics Effort Ahead of Schedule; Celera Diagnostics Takes Shape
Celera chief scientific officer Craig Venter said the proteomics facility development is proceeding ahead of schedule, and that new equipment deliveries and developments are already allowing researchers there to generate data.
“We expect in this week to receive the first two production TOF/TOF machines,” said Venter. “We have a large number of various types of mass spectrometers.”
The company has also developed a new alternative to 2D gels for preparing tissues to be analyzed, Venter said, which would allow parallel explorations of different disease processes.
While the company is still conducting research to determine the target diseases it will explore, Venter said that it had already started with four types of cancer – breast, colon, pancreatic, and lung cancer. These types of cancer are “pretty obvious in terms of the diagnostic potential with proteomics and SNPs,” he said.
This proteomics effort would considerably overlap with the new molecular diagnostics venture that Applera has taken on, Venter emphasized. During the conference call, company executives said that this venture, to be called Celera Diagnostics, would be a joint venture between Applied Biosystems and Celera.
“The process of discovery for both diagnostics and therapeutics in the early stages is almost identical,” Venter said. “We anticipate the early discoveries to be the ones with diagnostic potential…We’re all very excited about the Celera Diagnostics initiative because we’re going to get early value out of this.”
Pharma Subscriptions on Back Burner
Meanwhile, Celera said it was de-emphasizing sales of its databases to big pharma as a strategic move that would anticipate future, more complex collaborations with pharma based on diagnostic and therapeutic developments.
White said that Celera is “a little hesitant” to initiate database subscription relationships with many pharmaceutical companies now, given that “we’re in a transition and that segment's a little murky to us.” Instead, “right now we have put sales and marketing efforts into academia,” as well as biotech companies.
This shift away from pharma subscriptions also stems from pharma’s own current reevaluation of the value of genomic information, Venter said.
“It was a shock to people how few human genes there were,” he said. “A lot of thought in the pharmaceutical industry [was] that there were a large number of genes, that was one gene, one protein, one drug.” Now, Venter said, “there is a lot of reassessment as to the genome and what they think it is doing.”