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UPDATE: ABI to Distribute Celera s Discovery System, Unveils New Division

NEW YORK, April 22 - Applied Biosystems will market and distribute Celera Genomics' Discovery System and integrate the platform with other genomic and biological content into a new "knowledge business," Applera said today.

 

The move was made to free Celera brass to focus on the company's fledgling drug-discovery and -development efforts. The online business itself, which currently has about 180 subscribers, will stay at Celera's headquarters in Rockville, Md.

 

(Separately today, Applera said it has appointed Kathy Ordoñez, president of Celera Diagnostics, to run Celera Genomics.)

 

Under terms of the transaction, Celera will give ABI exclusive marketing and distribution rights to its Discovery System and access to its content in exchange for royalties on revenues expected from the new knowledge business. Celera will continue to earn revenue from current CDS customers, Applera said.

 

The knowledge business, which will be run by Deborah Smeltzer, ABI's finance VP, will comprise ABI's Assays-on-Demand as well as reagents based on its Taq-Man system. Michael Hunkapiller, president of ABI, said that his company hasn't changed the roll-out schedule for the Assays-on-Demand, which are due out in June. 

 

The "focal point" of the knowledge business is an e-commerce platform that ABI has been hinting at for the past several months. In a nutshell, executives hope the platform, which will be ready by early summer, will let scientists design experiments based on CDS content, bioinformatics tools, and from assays found in Assay-on-Demand and Assays-by-Design.

 

ABI also expects the e-commerce portal to market bio content and tools that will be targeted to academic and commercial scientists, according to Hunkapiller.

 

Celera, meanwhile, will continue to have access to content from its online business and retain control of its proteomics lab, which will stay in Maryland. Individual gene patents derived from proteomics research will be controlled by Celera, according to Applera.

 

It was not immediately clear how Celera's proteomics effort will be affected over the 10 years the new strategy will be in place.

"One of [Ordoñez's] priorities is to come in now and test all of [Celera's] ... investments and the various aspects of drug discovery and development," White said in a 90-minute conference call this morning. "Clearly she'll look at all the different platforms that we're using to advance our efforts here. What she will know at the end of that analysis relative to the scale at which we can pursue proteomics or anything else is not known yet."

 

Celera Diagnostics will not be affected by the changes, White stressed.


On the financial side, the transaction stipulates that ABI will reimburse Celera if any of the $62.5 million in subscription fees it expects over the next four years falls short due to any changes ABI makes to the platform. Celera can expect royalties in the low-to-mid single-digits beginning on July 1 and pocket between $200 million and $300 million as a result of the arrangement, Applera said.

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