Celera Genomics Corp. reported yesterday that its net loss shrank dramatically in its second quarter even as revenue declined.
The Rockville biotechnology company reported a loss of $16.1 million (23 cents per share) in the quarter ended Dec. 31. That compares with a loss of $117.9 million ($1.82) in the same quarter of 2001, which was driven up by a $99 million charge for the purchase of drugmaker Axys Pharmaceuticals Inc.
Revenue for the second quarter was $22.9 million, down from $35 million in 2001, a 35 percent drop that Celera attributed to the sale of its online genetic-data unit to sister corporation Applied Biosystems Inc.
Celera, a unit of Applera Corp. of Norwalk, Conn., said last year that it would withdraw from the gene-hunting business, which propelled its stock to more than $250 a share in 2000, and begin translating its patented genetic insights into commercial drugs. Kathy Ordonez replaced maverick biologist J. Craig Venter as president in April and laid off 132 workers, about 16 percent of Celera's staff.
Since then, its stock price has plunged more than 60 percent, a reflection of the risks inherent in the drug business. The stock yesterday fell 20 cents, or 2 percent, to $9.80 a share on the New York Stock Exchange.
"I believe calendar 2003 is going to be a year of significant progress in discovery and development programs for Celera," Ordonez said yesterday.
Celera is developing compounds to treat asthma and blood clotting. It expects to move at least one of its products into human tests by year's end. Ordonez said the company plans to push the products into advanced testing without seeking help from a major drug company, a strategy that would mean bigger gains for shareholders if the drugs work.
The company had $840 million in cash, one of the largest sums in the biotechnology sector. It expects its cash expenditure -- often referred to as the "cash burn" or "burn rate" -- to be about $80 million this year.
"They've got 10 years of life," said analyst Winton G. Gibbons of William Blair & Co., referring to Celera's cash hoard. "That's a long time for a biotechnology company."
Celera predicted that it will have revenue of $85 million to $95 million in the fiscal year ending in June, the majority of it from royalty payments tied to its former online genetic data unit, which is profitable.
Celera Diagnostics, a joint venture between Celera Genomics and Applied Biosystems, said its second-quarter revenue surged to $7.8 million, from $1.9 million a year earlier. Spending increased 35 percent in the quarter, to $11.5 million from $8.5 million.
Applied Biosystems, the largest maker of gene research equipment, said yesterday that net income in its fiscal second quarter fell to $29.2 million (14 cents),from $49 million (23 cents) in the year-earlier period. Revenue rose 8 percent, to $444.7 million.
The company last month fired 500 employees to reduce research costs, in part because drugmakers and research organizations have decreased spending on DNA research tools.