Celera Genomics Group of Rockville announced an agreement yesterday to provide potential targets for cancer drugs to biotech giant Genentech Inc.
The partnership is the third deal Celera has made recently with a major pharmaceutical or biotechnology company to capitalize on possible therapeutic discoveries while limiting financial risks and expenses during the costly development process.
The latest deal calls for Genentech, a South San Francisco, Calif., company that has brought 13 drugs to market, to finance and develop drugs using proteins that Celera has linked to cancer. Genentech must make royalty and other payments to Celera at key stages in the development process.
After the announcement, shares of Celera closed yesterday at $11.53, up 59 cents. Celera's parent company is the Applera Corp. of Norwalk, Conn.
Celera's stock topped more than $200 a share as the company made history by mapping the human genome four years ago, but the stock slid after its business of selling access to the genetic data fell out of favor with Wall Street.
The company's focus in the past few years has been drug development, and its efforts seem to be maturing, said Edward A. Tenthoff, an analyst with Piper Jaffray.
In July, Celera signed a deal with Abbott Laboratories, agreeing to provide possible cancer therapy targets to the Illinois company to take through pre-human testing. In that case, Celera retained an option to share in the costs of human testing and then share in profits. Later in July, Celera made a similar deal with Seattle Genetics.
Tenthoff said the agreements help solidify Celera's transformation from genome mapper to drug developer while limiting financial risk and conserving its more than $700 million in cash.
Shares of Genentech, which also trade on the New York Stock Exchange, closed at $52.02, up 47 cents.