Celera Genomics Group Reports Third Quarter Revenues of $23.4 Million
Two New Academic Subscription Agreements Announced
Rockville, MD - April 26, 2001
Celera Genomics Group (NYSE: CRA), an Applera Corporation business, today reported results for its third fiscal quarter ended March 31, 2001. The Group’s revenues for the third quarter increased to $23.4 million, in comparison with $11.1 million in the same period last year. The increase in revenues resulted principally from new subscription agreements with commercial and academic customers and from collaborations and services. The net loss after benefit for taxes was $29.1 million, or $0.48 per share, compared with a net loss of $24.1 million, or $0.45 per share, in last year’s third quarter. Selling, general, and administrative expenses increased 44% to $15.1 million as Celera continued to expand its sales and marketing group. Included in this quarter’s results is a non-cash charge of $10.9 million, or $0.17 per share, for amortization of goodwill and other intangibles primarily related to the acquisition of Paracel, Inc. in June 2000.
Research and development (R&D) expenditures for the third quarter were $52.2 million, level with the second quarter of fiscal 2001. Celera is continuing to shift its research spending to expand its capabilities in proteomics and comparative genomics as part of the development of its discovery program.
For the nine months ended March 31, 2001, Celera reported revenues of $62.0 million, in comparison with $27.7 million for the comparable period in fiscal 2000. The net loss during the first nine months of fiscal 2001, after benefit for taxes, was $84.5 million, or $1.40 per share, compared with $67.8 million, or $1.29 per share, during the comparable period of the previous fiscal year. Included in these results is a non-cash charge of $33.0 million, or $0.52 per share, for amortization of goodwill and other intangibles primarily related to Celera’s acquisition of Paracel.
“We are satisfied with this quarter’s growth in our online information business and our research collaborations,” noted Tony L. White, Applera’s chief executive officer. “During the next year we expect continued expansion of our customer base as we increase the content and functionality of our information products. Having completed the sequencing and assembly of the human genome, Celera is entering its next phase of development. We plan to leverage our genomic data and bioinformatics platform as the foundation for Celera’s internal discovery efforts.”
In November 2000, Applera Corporation announced the formation of a major initiative in the field of molecular diagnostics and the appointment of Kathy Ordoñez, formerly president of Roche Molecular Systems, to lead this initiative. The initiative continues to develop as its strategy is refined and resources are built. The Company has evaluated the initiative’s anticipated relationships with the Company’s two operating groups, Applied Biosystems and Celera Genomics, and decided that it will be optimally positioned as a joint venture between those two groups. Further details and developments regarding this business, which will be named Celera Diagnostics, will be announced as the initiative continues to evolve.
“We are excited to be working with the molecular diagnostics management team and the Applied Biosystems Group in the formation of this joint venture initiative,” said J. Craig Venter, Ph.D., Celera’s president and chief scientific officer. “One of our goals will be to coordinate Celera’s internal therapeutic research program and the diagnostics initiative which we believe will lead to significant discoveries in the diagnosis and treatment of disease. During the next quarter, we plan to scale up our proteomics factory, one of our key discovery platforms, as we continue to build new capabilities.”
Today Celera also announced that it has signed subscription agreements with two internationally renowned research institutions: The Ludwig Institute for Cancer Research, an international, not-for-profit research organization with 10 branches in seven countries, dedicated to the ultimate goal of eradicating cancer, and BIOCONDA (Biomedical Consortium for Data Access), a consortium of principal Spanish public research laboratories and centers engaged in biomedical investigation.
Over the last three months, Celera has reported a number of developments in its business, including:
For the balance of fiscal 2001, which ends June 30, 2001, Celera expects to see continued strong year-to-year revenue growth comparisons. The actual rate of increase will depend on numerous factors, including the types of customers that it attracts and the timing of those agreements. The Group also faces potentially lengthy selling cycles with some of its customers. Celera begins to recognize revenue from new contracts when its database customers are provided access to its reference libraries. The Group continues to expect that Celera’s revenues could double for fiscal 2001, compared with the prior year.
This increase in revenues should be more than offset by investments as Celera expands its discovery initiatives. R&D expenditures are dependent on a variety of factors, including the timing of new projects and the work in research and development programs that are undertaken internally or with collaborators. While the rate of increase is dependent on the factors listed above, Celera believes that R&D expenditures will be higher in the fourth quarter than in the prior quarter. Selling, general, and administrative expenditures are also expected to grow modestly during the fourth quarter.
These comments reflect management’s current outlook. The Company does not have any current intention to update this outlook and plans to revisit the Group’s outlook only once each quarter when financial results are announced.
Conference Call & Webcast
A conference call with Applera Corporation and Celera Genomics executives will be held today at 10:00 a.m. (ET) with investors and media to discuss these results and management's current financial outlook for the Company. Investors, securities analysts, and representatives of the media calling from the US or Canada who would like to participate should dial 800/230-1092 (ask for Third Quarter Earnings Release) between 9:45 and 10:00 a.m. on April 26. International participants should call (+1) 612.288.0337. This conference call will also be webcast. Interested parties who wish to listen to the webcast should visit either www.applera.com and go to the Investor Relations section of the web site, or www.appliedbiosystems.com and go to the In the News section, or www.celera.com and go to the Investor Center section. The webcast will be archived for seven days following the conference call.
Applera Corporation, formerly PE Corporation, comprises two operating groups. The Celera Genomics Group, headquartered in Rockville, MD, intends to be the definitive source of genomic and related medical information. Celera has developed three business units: the Information Business, Discovery Sciences, and Discovery Services, all of which build upon Celera’s generation, integration, and analysis of biological information. Celera intends to enable therapeutic and diagnostic discoveries both through its own application of its scientific capabilities and in partnership with pharmaceutical and biotechnology companies. The Applied Biosystems Group (NYSE:ABI) develops and markets instrument-based systems, reagents, software, and contract services to the life science industry and research community. Customers use these tools to analyze nucleic acids (DNA and RNA) and proteins to make scientific discoveries, leading to the development of new pharmaceuticals, and to conduct standardized testing. Applied Biosystems is headquartered in Foster City, CA, and reported sales of $1.4 billion during fiscal 2000. Information about Applera Corporation, including reports and other information filed by the company with the Securities and Exchange Commission, is available on the World Wide Web at www.applera.com, or by telephoning 800.762.6923.
Certain statements in this press release, including the Outlook section, are forward-looking. These may be identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” and “potential,” among others. These forward-looking statements are based on Applera Corporation’s current expectations. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for such forward-looking statements. In order to comply with the terms of the safe harbor, Applera Corporation notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, and results of Celera Genomics’ businesses include but are not limited to (1) operating losses to date; (2) a unique and expanding business plan; (3) dependence on the final assembly and annotation of the human genome; (4) uncertainty of revenue growth; (5) unproven use of genomics information to develop products; (6) intense competition in the evolving genomics industry; (7) dependence on customers in and subject to the risks of the pharmaceutical and biotechnology industries; (8) heavy reliance on strategic relationship with the Applied Biosystems Group; (9) potential product liability claims; (10) liabilities related to use of hazardous materials; (11) lengthy sales cycle; (12) dependence on the unique expertise of its scientific and management staff; (13) uncertainty of patent, copyright, and intellectual property protection and the ability to protect trade secrets; (14) dependence on computer hardware, software, and internet applications; (15 ) potential adverse effect on the Celera Genomics group’s intellectual property protection and the value of its products and services due to public disclosure of genomics sequence data. (16) access to biological materials; (17) legal, ethical, and social issues affecting demand for products; (18) disruptions caused by rapid growth of the business; (19) government regulation of its products and services; (20) risks of future acquisitions; (21) uncertainty of outcome of stockholder litigation; (22) lengthy and uncertain development cycle for therapeutic and diagnostic products; and (23) other factors that might be described from time to time in Applera Corporation’s filings with the Securities and Exchange Commission.
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