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Perkin-Elmer Reports Strong Demand For ABI Prism 3700, Updates Celera Progress


NORWALK, Conn.--Reflecting continued high demand for genomic products and services, Perkin-Elmer here has reported that revenue for its PE Biosystems division for the first quarter of fiscal 1999 grew 16 percent over the previous year, in part reflecting the introduction of the ABI Prism 3700 DNA Analyzer late in the quarter. Overall the company reported an 8 percent increase in revenue during the period.

In the Biosystems division, operating profits grew 26 percent and product orders increased 35 percent and were particularly strong in North America and Europe, Perkin-Elmer said. Orders for genetic analysis systems, for sequence detection systems, and from applied genetics markets driven by molecular biology-based reagents were strongest. Orders for products sold to applied markets grew more than 100 percent and demand for sequence detection systems increased more than 50 percent, according to the company.

Excluding orders from the Celera Genomics division that Perkin-Elmer launched jointly with Craig Venter in May, Biosystems accepted more than 70 orders for the ABI 3700 in the two weeks following its introduction, making the system one of the most successful new product introductions in Perkin-Elmer's history. Shipments of the ultrahigh-throughput system to early-access customers and Celera are expected to begin during the second fiscal quarter.

"From the moment we introduced our new ABI 3700 at the Genome Sequencing and Analysis Conference in September, customer response has been very strong," commented Michael Hunkapiller, Perkin-Elmer senior vice-president and Biosystems president. "Demand for high-throughput sequencing continues to grow rapidly and it's clear that our new system appeals to a broader base of customers than we initially thought. Based on orders we have received to date, we may be capacity-constrained well into calendar 1999," he warned.

Hunkapiller noted that the broader-than-expected appeal of the 3700 indicates that it may overlap somewhat with the market into which the company's ABI 377 and other competitive instruments are sold. "Our challenge for the rest of this fiscal year is to best meet customer needs across the genetic analysis market and be realistic about ramping production of our new 3700 system," he said.

Biosystems recently increased its research and development budget by nearly 50 percent, or $10 million, to accelerate new product development. The company said it plans to introduce nine major new products during fiscal 1999.

Perkin-Elmer also reported that Celera incurred $3.6 million in operating expenses associated with setting up facilities and hiring staff during the quarter. Some 50 employees, including key executives, were appointed and a strategic alliance was formed with Compaq Computer for integrated hardware, software, networking, and support services. Laboratories and related facilities remain under construction. Celera is expected to begin limited sequencing operations during the second quarter.

Tony White, Perkin-Elmer's chairman, president, and CEO, said the company has begun a process aimed at reorganizing its capital structure into two targeted stocks--one for Celera and one for the remainder of the company. He explained, "These are developments that will move us closer to our vision of Perkin-Elmer as the definitive source of essential tools and knowledge for gathering and using biomedical and genomics information."

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