Celera Completes First-Phase of Human Gene Map
By Cindy Christ

Shares in Celera Genomics Group (CRA) soared as much as 31 percent Thursday after the company said it achieved a milestone in mapping the human genome -- sequencing one person's genes.

The company said it would now begin to assemble the gene fragments into their proper order.

Rockville, Md.-based Celera is locked in a race to map the human genetic code with rival research companies and the non -profit Human Genome Project, a $3 billion government- supported effort launched in 1990, slated for completion in 2005.

The Human Genome Project is posting all of its findings on the Internet and will publish a full genetic map on the Web by 2003.

Scientists hope that decoding the human genome, which comprises the entire DNA in an organism and serves as a basic blueprint for life, will lead to new medical treatments and prevention of diseases.

Today's big move follows a 54 percent jump in Celera shares Wednesday after President Bill Clinton said companies involved in genetic research should be allowed to patent their discoveries as an incentive to develop gene-based therapies.

The President's comments were intended to clarify statements made by Clinton and Britain's Prime Minister Tony Blair in mid-March, suggesting that gene research should be freely available.

Celera began to sequence the human genome seven months ago using a "shotgun" technique, resulting in millions of gene fragments that must be fit together like pieces in a puzzle.

The technique differs from the hierarchical method used by the Human Genome Project, which assembles gene fragments as they're discovered.

Government researchers have claimed their technique is more accurate than the shotgun approach, which speeds up the mapping process. Nonetheless, Celera said its sequencing strategy has been validated by the recent publication of the fruit fly genetic code, the largest genome to be sequenced and assembled to date.

Scientists say the fly, known scientifically as Drosophila melanogaster, serves as an important model for human biology and medicine.

"Now that we have completed the sequencing of one human genome we will turn our computational power to the task of ordering the human genome," said J. Craig Venter, Celera's president and chief scientific officer, in a statement.

"We intend to complete and publish the human data in a form that is consistent with the high-quality Drosophila genome. This is expected to allow researchers worldwide and our subscribers to utilize our data to make important medical advances," Venter added.

A key feature of Celera's approach to sequencing the human genome is the use of genetic material from both men and women with different ethnic backgrounds.

The company said its genomic database consisting of data from six men and women of varying ethnicity should allow it to study genetic variations between people at the same time the genome is being deciphered.

In contrast, the Human Genome Project is using a "mosaic" of about 10 different donors, although most of the data will come from one person's genes.

On Jan. 10, Celera announced it had completed data covering 90 percent of the human genome. With today's announcement, the company said it's on track to complete the assembly of the human genome later this year.

Venter said after Celera maps the human genome, it would make the information available free on its Web site.

"We're giving the basic genetic sequence away for free because we think it will drive the need for our database," Venter said in an interview with CNBC financial television.

Celera earns revenues from subscribers who pay between $5 million and $15 million annually under 5-year contracts to access its genetic database to help discover key new therapies and cures.

"We have the biggest supercomputer ever built in a civilian industry," Venter told CNBC. "That's necessary for interpreting the genetic code."

Celera is a tracking stock for parent company PE Biosystems (PEB), which makes test instruments and software for the biotech and life sciences research industries.

On March 15, ING Barings started coverage of Celera with a "strong buy" rating and 12- to 18-month price target of $300, noting the company should see strong revenue growth as it begins to market its database products later this year.

ING Barings projects annual revenue growth of 99 percent through 2003, when it expects revenues to reach $320 million.

Over the last 52 weeks, 18-month-old Celera has traded as high as $276 and as low as $7.06. Shares split 2-for-1 in February.

Celera closed up $25, or 21.7 percent, at $140 on the New York Stock Exchange after trading as high as $151 intraday.

Shares in parent company PE Biosystems added $6.13, or 6.2 percent, to $104.81, helping boost the biotech index 6.4 percent by midday.