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Celera Spends $283 M in Stock to Scoop Up Paracel s Technologies and Sales Staff



OCKVILLE, Md.--Calling Paracel’s technologies and in-house expertise a complement to its own mission, Celera Genomics said it would outlay $283 million in shares of its common stock to acquire the Pasadena, Calif., maker of genomic data analysis software and high-throughput hardware.

Eight-year-old, privately held Paracel has had a relationship with Celera’s parent company, PE, for several years. In 1993, Applied Biosystems began marketing one of Paracel’s early genomic accelerator technologies, and in 1996 Perkin-Elmer (which has since been renamed PE) invested in Paracel. In fact, Paracel’s CEO, Kwang-I Yu, told BioInform that he had long thought that if his company ever merged it would be with
PE Biosystems. But the Paracel-Celera fit, he said, is better.

Celera and Paracel have been collaborating on high-resolution informatics tools development since September 1998, when Celera bought Paracel’s GeneMatcher massively parallel genomic-data-analysis system. Scientists from the two companies have used the instrument to build EST-clustering and whole-genome datamining capabilities to perform both DNA and protein-level comparisons of sequence data. They’ve also collaborated on technologies to estimate sequence quality and perform similarity searches.

Now, Celera said it plans to deploy Paracel’s supercomputing technology and its own data to create a "genomics discovery portal." One GeneMatcher contains more than 6,000 customer processors, programmable to execute a full range of genetic comparison algorithms such as BLAST, Smith-Waterman, hidden Markov models, frame search, and profile search. Craig Venter, Celera’s president, said, "We expect this technology to enable customers to rapidly search through Celera’s vast data resources to make important discoveries."

Yu, who will become senior vice president of Celera and general manager of the Paracel business unit, said Celera ownership will not alter Paracel’s purpose: to be the world’s leading supplier of genomic analysis products. Measured by revenues, products, and customers, Yu claimed Paracel is already the strongest high-throughput sequence-data-analysis company around. He said the firm is committed to continuing to serve all its customers, including those that might be competitive with Celera. (Incyte Pharmaceuticals, DoubleTwist, and several major genome sequencing centers are among Paracel’s customers.)

Still, Paracel’s sales and customer support team will likely take on additional duties as Celera employees, Yu said. "Data producers often don’t have a good distribution arm for their products," he observed. "We have a very effective worldwide sales and technical support force. That’s something you can leverage."

Because Paracel sells systems to pharmaceutical companies that conduct automated data analysis, becoming a distributor of Celera data would not be a stretch, Yu said. "Can we leverage our synergies so that we can serve as a product arm for Celera? I would be disappointed if that didn’t happen."

Celera will retain all of Paracel’s 85-person global staff, which Yu said is growing at a rate of one per week, as well as the company’s Pasadena facility.

--Adrienne Burke

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