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UPDATE: Applied Biosystems Predicts Revenue to Slump in 2002

SAN FRANCISCO, Jan. 8 - Applied Biosystems predicts that revenue growth will slow in 2002, president Michael Hunkapiller said on Tuesday in a poorly attended presentation here.


The projected decrease is due to economic uncertainty and a transition to a new product cycle, Hunkapiller said at the 20th annual JPMorgan H&Q Healthcare Conference, which ends on Thursday.


The rate slump, pegged at between 7 and 9 percent in October (reduced from a prediction of between 10 and 12 percent in March) is off from the 20 percent growth achieved by ABI in past years, according to an Applied Biosystems spokesperson who talked in greater detail after the presentation. ABI's fiscal year ends in June.


Hunkapiller and Tony White, Applera's CEO, said the projected decrease is a function of a transition period from boom times fueled by the Human Genome Project—in which large labs purchased a high volume of equipment—to an environment in which more mainstream labs make smaller purchases.


"The 3700 was an anomaly," said White, referring to the DNA sequencer used by most labs that sequenced the human genome. It "put a strain on our system. I don't miss it. [Although, it was] not a bad experience; a few $100 million in the kitty's not bad.


"But it's not how we want to do business," he stressed. ‘We want to get back to growing 20 percent every year, no matter what."


Hunkapiller said the transition to fewer 3700s sold is also being accompanied by a shift in the marketplace to next-generation ABI sequencers and proteomics-oriented equipment, which, along with rising NIH and pharma R&D budgets, would bring annual company growth back up to 20 percent.


ABI's presentation, made in the vast Grand Ballroom of the Westin St. Francis Hotel here, attracted roughly one-third of the room's capacity. By comparison, the room was filled to capacity and held a standing-room-only crowd when Incyte Genomics presented 30 minutes earlier on the previous day. In fact, there has hardly been a presentation in any of the six rooms allotted by the hotel that wasn't filled at least to capacity by attendees.


However, the poor ABI showing may have been due to the fact that participants decided to forego the presentation to attend a separate one on Thursday afternoon at a hotel down the block at which ABI's and Celera Diagnostics' initiatives for the coming year will be discussed.


The firms will webcast the meeting, which will run from 5:00 p.m. EST. Hunkapiller, together with Applera's CFO Dennis L. Winger and Kathy Ordonez, president of Celera Diagnostics, will co-host the event with other members of management from each firm.

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