Celera's Revenue Up 120%

Celera Genomics added database subscription customers this quarter, while expanding into functional genomics and proteomics. Though it faces plenty of existing competition there, the company believes it leads due to its superior genomic information and leading-edge sequencing capability. CEO J. Craig Venter predicted a doubling of revenue in fiscal year 2001 over 2000.

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By Tom Jacobs (TMF Tom9)
October 26, 2000

Rule Breaker Port holding Celera Genomics (NYSE: CRA) reported sharply increased revenues today for the first quarter of its fiscal year 2001, though its net loss widened from $0.38 to $0.43 per diluted share. Revenues, primarily from genomic information databases, vaulted 120% from $8.3 million in Q1 last year to $18.3 million. Celera's loss of $0.43 a share beat the First Call consensus estimate by $0.17. Subject to the usual disclaimers, CEO Craig Venter predicted that 2001 revenues would likely double 2000's $42.7 million.

Celera's foray into functional genomics and proteomics
The big news this quarter was Celera's move into proteomics and functional genomics -- developing its own platform to discovery gene function and gene targets for drugs. The Fool and others have noted the plethora of competitors who have significant head starts, such as Incyte Genomics (Nasdaq: INCY) and Human Genome Sciences (Nasdaq: HGSI). Questioned in a conference call today whether Celera might make smarter moves by partnering with existing functional genomics companies rather than moving in on its own, CEO Craig Venter answered no. He maintained that Celera's human genome database was more accurate and larger than any other, causing the gene expression field (efforts to determine how genes behave in different tissue and diseases) to "start over from the beginning."

Venter also noted that Celera grips the leading-edge sequencing technology for protein identification and decoding, uniquely able to perform on an industrial level. Researchers estimate that the 100,000-120,000 genes in humans can code for up to 1 million proteins. Celera attributes its success in sequencing the human genome in large part to its industrial high-throughput capacity. It claims the same advantage for proteins, and its protein sequencing facility construction continues.

Venter did envision useful partnering for patient populations. Access to information from certain genetic groups could increase the ability of Celera to provide "predictive statistics" and better "yes or no answers" that customers want. While no partners were mentioned, this could refer to the kinds of information available from deCode genetics (Nasdaq: DCGN) (Icelandic groups) and Myriad Genetics (Nasdaq: MYGN) (Mormon populations).

Nyah-nyah: Where are the big pharmaceutical customers?
One analyst asserted that Incyte Genomics has belittled Celera's efforts, noting that Celera's new database customers in the quarter were academic institutions, not big drug makers. Venter responded that they are in discussions with "essentially every notable pharmaceutical company in the world." He further asserted that the academic marketplace had the potential to equal the pharmaceutical market, and that the initial acceptance from "high-end" institutions marked the leading edge of a wave.

Your Turn:
What do you make of earnings news? Steady on course, or where's the beef? Jump in on the Celera discussion board!

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