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Applera Announces New Applied Biosystems Knowledge Business and Marketing and Distribution Agreement for
Knowledge Business To Integrate Celera’s Genomic and Biological Information with Applied Biosystems’ Products and Services, Providing Unique New Web-Based

Agreement Capitalizes on Applied Biosystems’ Marketing and Distribution Capab

FOSTER CITY, CA and ROCKVILLE, MD - April 22, 2002

Applera Corporation today announced that its Applied Biosystems Group (NYSE:ABI) will become the exclusive distributor of the Celera Discovery System (CDS) operated by its Celera Genomics Group (NYSE:CRA) and that Applied Biosystems will integrate CDS and other genomic and biological information into a new Knowledge Business. The arrangement is expected to create opportunities for higher revenues and income for both Applera operating groups and free Celera's executive team to focus on therapeutic discovery and development with the same access to this genomic and biological information it has presently while maximizing the return to Celera from its CDS product.

Applied Biosystems plans for its Knowledge Business to include genomic assays and related content, as well as other information-rich products, services, and analytical tools to meet the needs of its life sciences customers. The Knowledge Business products and services will be marketed, in part, on an expanded information portal.

In exchange for marketing and distribution rights to CDS and access to CDS content, Applied Biosystems will provide Celera with a royalty stream on revenues to be generated by the Knowledge Business. In parallel, Celera will continue to earn revenues from current CDS customers. Celera is committed to maintaining its relationship with these customers and fully supporting them for the term of their subscriptions and will explore opportunities to expand these relationships on the basis of this new arrangement.

"Our collective management team completed the analysis we disclosed earlier and determined that this arrangement will best serve both groups' future interests. By channeling Celera's unique genomic information through Applied Biosystems' worldwide sales and marketing organization and combining it with other AB products, we expect to provide customers with unprecedented integration of information, assays, products and services," stated Tony L. White, Chief Executive Officer of Applera Corporation. "This arrangement efficiently leverages the resources of the two Applera businesses and should enable each group to achieve higher value by driving higher revenues for Applied Biosystems and extending the life of Celera's revenue stream for its CDS product beyond what the Company believes Celera could earn from the current CDS offering."

Details of the marketing and distribution arrangement include the following:

  • The Company expects EBITDA (earnings before interest, taxes, depreciation, and amortization) from Celera's committed subscription contracts over the next four years (FY 03-FY 06) to be approximately $62.5 million. Should Celera's EBITDA for these committed contracts fall below this amount due to changes made to the current CDS product by Applied Biosystems, Applied Biosystems will reimburse Celera for any related shortfall, provided Celera meets performance criteria to support its current contracts. In addition, over the ten-year term of the agreement, Celera will receive a low-to-mid single-digit royalty on new Knowledge Business revenues obtained after July 1, 2002. The royalty rate is progressive with the level of sales through FY 08, and it declines annually starting in FY 09. Based on current assumptions regarding the Knowledge Business, the Company believes the cumulative cash flow to Celera over the term of this agreement, including cash flow from committed contracts, to be in the range of $200 million and $300 million.
  • The proteomics laboratory at Celera Genomics will exclusively support therapeutic research conducted within Celera and on behalf of its therapeutic collaborators. Celera will retain control of proteomics data for therapeutic use and Celera-created proteomics software and will retain control of individual gene patents.
  • Celera's therapeutics business will continue to have access to data and other intellectual property associated with the online information business for the benefit of its discovery programs, including for its collaborations with third parties.
  • Celera Diagnostics will not be affected by this arrangement and will continue to have access to Applera intellectual property for human in-vitro diagnostics.

Deborah A. Smeltzer, who has been serving as Vice President, Finance, for Applied Biosystems, has been appointed Vice President of the Knowledge Business. Celera employees associated with the information business will continue to support the CDS product, and they will remain Celera employees working under the direction of Jason Mollé, General Manager of Celera's online information operations. Ms. Smeltzer and Mr. Mollé will work closely together on the integration of the CDS product into the new Knowledge Business.

Applera management will lead a conference call at 10:00 a.m. (EDT) today to discuss these developments. Investors, securities analysts, and media representatives who would like to participate should dial (706) 634-4992 (code "Applera") between 9:45 and 10:00 a.m. 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.celera.com and go to the Investor section, or www.appliedbiosystems.com and go to the Investor Relations webpage within the "About Us" section. A recording will be available two hours after the completion of the conference call from April 22 to May 2, 2002. Interested parties should call (706) 645-9291 and enter Conference ID 3900407.

About Applera Corporation
Applera Corporation comprises two operating groups. The Applied Biosystems Group 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), small molecules, 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 $1.6 billion during fiscal 2001. The Celera Genomics Group, located in Rockville, MD and South San Francisco, CA, is engaged principally in integrating advanced technologies to discover and develop new therapeutics. Celera intends to leverage its genomic and proteomic technology platforms to identify drug targets and diagnostic marker candidates, and to discover novel therapeutic candidates. Its Celera Discovery System™ online platform is an integrated source of information based on the human genome and other biological and medical sources. Celera Diagnostics, a joint venture between Applied Biosystems and Celera Genomics, is focused on discovery, development, and commercialization of novel diagnostics tests. 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 are forward-looking. These may be identified by the use of forward-looking words or phrases such as "should," "intend," "plan," and "expect," 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. These factors include but are not limited to (1) rapidly changing technology and dependence on development of new products; (2) sales dependent on customers' capital spending policies and government-sponsored research; (3) successful integration of CDS into the Knowledge Business product offering and market acceptance and adoption of the product offering; (4) and 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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