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Celera 4Q loss widens
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July 27, 2000: 11:38 a.m. ET
Genomics company matches Wall St. forecasts; revenue nearly triples
By Staff Writer Martha Slud
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NEW YORK (CNNfn) - Celera Genomics Group, the upstart company that announced last month it had mapped virtually all of the genes in the human body, reported widening losses for its fiscal fourth quarter Thursday as it spent heavily on research and development. Revenue nearly tripled.
Meanwhile, the company's sister firm, gene analysis equipment maker PE Biosystems Group, posted a 26 percent increase in fiscal fourth-quarter profit. The results, which were in line with forecasts, pleased investors - sending the company's shares about 8 percent higher in morning trading.
Celera, based in Rockville, Md., lost $20.4 million, or 35 cents per diluted share, during the quarter ended June 30, compared with a loss of $19.9 million, or 39 cents per diluted share, in the year-earlier period.
The latest results, which matched the First Call consensus forecast of analysts, exclude a one-time charge associated with the company's recent acquisition of genomics equipment firm Paracel Inc. Including the charge, net losses for the April-June period widened to $24.9 million, or 43 cents per share.
Celera is not expected to turn a profit until at least fiscal 2002-2003.
"This has been an exciting and productive year for us," said J. Craig Venter, Celera's president and chief scientific officer. "We completed the sequence and assembly of both the fruit fly and human genomes in time frames previously thought impossible, demonstrating the viability of the whole genome shotgun sequencing approach."
The company has been in competition with the publicly funded Human Genome Project to chart all of the genes in the body, a development expected one day to revolutionize the way disease is diagnosed and drugs are created. The company used a controversial computerized technique, dubbed "shotgun" sequencing, which speeded up the gene-mapping process.
 Revenue for the quarter jumped to $15 million from $5.1 million. Most of the company's revenue comes from licensing access to its gene database to pharmaceutical and biotech companies, which hope to use the information in the development of drugs that target disease at the molecular level.
The revenue results were better than expected, topping Wall Street's estimates by as much as 25 percent, said Paul Knight, a biotech analyst at Thomas Weisel Partners. He rates Celera shares a "strong buy."
In addition to the better-than-expected revenues, he said, "the subscriptions to their database have really picked up since their closing (of the quarter) in June. The company recently signed licensing pacts with drug makers American Home Products Corp. (AHP: Research, Estimates) and Immunex Corp. (IMNX: Research, Estimates) as well as Harvard University.
Other analysts, however, have questioned Celera's business model, saying licensing access to its gene database may not be sufficient to achieve a sustainable business. Recently, the company signaled that it might move into drug development itself.
Celera's research and development costs totaled $54 million, up from $22.2 million in the 1999 fourth quarter.
In late Thursday morning trading, Celera (CRA: Research, Estimates) shares slipped 3-3/16 to 99-3/4. The highly volatile stock has traded in a range of 7-7/8 to 276 over the past year.
For fiscal 2000, net losses deepened to $92.7 million, or $1.73 per diluted share, from a loss of $44.9 million, or 89 cents per diluted share, in fiscal 1999. as R&D spending shot up nearly 250 percent to $167.8 million.
PE Biosystems' results on target
PE Biosystems (PEB: Research, Estimates) earned $56.6 million, or 26 cents per diluted share, during the fiscal fourth quarter, up from $45 million, or 21 cents per share, in the year-earlier period. Revenues rose 21 percent to $391.8 million.
 The company, which is changing its name to Applied Biosystems, manufactures high-tech equipment for the sequencing and analysis of genes.
Both Celera, and PE Biosystems Group are subsidiaries of PE Corp.
For the fiscal year, PE Biosystems' net profit totaled $186.2 million, or 86 cents per diluted share, down from $227.4 million, or $1.10 per share, in fiscal 1999. Last year's results include a $79 million special gain from discontinued operations.
In morning trading, PE Biosystems stock jumped 6-3/16 to 86-7/16. 
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