NEW YORK, Jan. 22 - Wanted: Person to turn one-time genomic-database leader into drug-discovery powerhouse.
Craig Venter has quit as president of Celera Genomics but will stay on to concentrate on the scientific aspects of its business, Applera said on Tuesday.
Venter will chair its Scientific Advisory Board, while Applera Chairman and CEO Tony White will become president of Celera until he finds a permanent replacement--or, more specifically, one who can guide the company downstream.
"We are now at a critical juncture where my best contributions can be made in a scientific advisory role, allowing the rest of the organization to continue Celera's progress toward becoming a successful pharmaceutical business," Venter said in a statement.
Venter, a co-founder Celera, said he also plans to spend more time as chairman of The Institute for Genomic Research, which he helped found, and which his wife, Claire Fraser, now runs.
One reason circulating among those who cover Celera says that Venter's departure acknowledges his inexperience in running a pharmaceutical company. Celera implied as much in its release on Monday morning, saying that it now seeks management "to guide the continued evolution of Celera into a successful genomics-based pharmaceutical business."
Others, however, believe that Venter, who turned 55 in October, left due to growing personality differences between him and White.
"Tony White is not the easiest guy to get along with," said one analyst who covers Celera for a well-known financial firm. "It may be that Craig just decided it was time to do something else and pursue other interests.
"It seems to me that he was pretty excited about what was going on at Celera so I don't think he got tired of it," said the analyst, who asked not to be named.
He speculates that Celera will be hurt in the short term for losing Venter--and investors and potential partners and even subscribers will look carefully at whom the company picks as a replacement.
Venter "is a big part of the excitement to the Celera story, and I think they're going to lose a lot of that," said the analyst. "Celera says that he'll stay on the [scientific advisory] board, but I think we'll be seeing less and less of him there."
Shares in Celera tumbled $1.42, or just under 6 percent, to $22.42 in early afternoon trading on the New York Stock Exchange on Tuesday.
"I'm surprised it hasn't fallen farther," said the analyst. "I think [the downward trend in share prices] will continue. You know, this announcement will not [be] a positive catalyst until they hire somebody new."
Celera Genomics did not respond to telephone calls seeking comment, though it and Applera are scheduled to release their second-quarter 2002 financial results on Wednesday, at which time White might indicate a timeline for finding a replacement.
"I think he [Venter] is capable of taking Celera to the next step ... into drug discovery," said the analyst, citing 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. Though he may lack the chops to run a pharma company, Venter, like Haseltine, is smart enough to learn on the fly, he said.
"It's going to be tough for them to find somebody with the gravitas that Venter has," the analyst said. "I think it's going to take longer than shorter."
Following the money
Venter's move comes two weeks after another company co-founder, Chief Business Officer Peter Barrett, left to join a Boston-based VC company. A few months before that, Celera moved its COO, Peter Chambre, to a post at Applera; Paul Gilman, former director of policy planning, left for a job with the US Environmental Protection Agency, and Jim Peck, who helped create Celera's popular if not yet profitable online business, split to rejoin former employer NexisLexis.
A spokeswoman at the time said that the moves were all "part of the natural evolution of the company" and that the resulting new blood will help Celera "transition into the next phase ... as we become a full-fleded therapeutic discovery company."
Hammering home its intentions, Celera last month announced a handful of strategic moves: It unloaded its AgGen plant-genomics business to Paradigm Genetics for $2.1 million in stock, and in a single day extended its osteoporosis drug-discovery deal with Merck and inked a proteomic-based drug-discovery collaboration with structural genomics firm Syrrx.
More and more of what Celera did reflected its ongoing metamorphosis, and in a candid assessment of his best-known business, White conceded that "information will never be a multibillion dollar industry."
"The goal was always to become a user of our [own] data. Celera is in the transformation stage," he proclaimed, and not for the first time. "We have to get busy to retool to become a credible drug-discovery company." After all, that, they say, is where the real money is.
To be sure, Celera's shift in interest comes at a time when its online business can almost smell black ink. During a rare public appearance of Celera Genomics' and Celera Diagnostics' top brass last month, Venter promised that revenue for his unit would surge 40 percent to 50 percent and that the company would become profitable this year.
Jason Molle, who replaced Peck as general manager of the online business, backed up Venter by predicting that annual revenue for his unit would grow by $250 million and sign up 50,000 new subscribers over the next two years.
"No company has solved the problem of effectively managing or integrating" the genomic data out there, said Molle, who before taking over the online business was a senior vice president of sales and marketing at Celera. "We want to be the one-stop shop for users."