CELERA: After Genome Announcement, Future Uncertain
Celera Genomics, the company that spurred an international consortium into producing a nearly complete map of the human genome, faces mixed prospects, according to papers across the country. The Chicago Tribune reports that Celera could reap "huge potential profits" from its gene sequencing machines and intellectual property. The Tribune predicts that "Celera will sell genetic information to pharmaceutical and biotech firms, [and] exploit its parallel computing system and unique genetic database." Winston Gibbons, an analyst with William Blair & Co., told the Tribune that Celera's leadership in advancing gene sequencing "gives [the company] a significant leg up on competitors in supplying genetic data to drug companies and biotech firms. ... As Celera builds on its proprietary information base, its lead over competitors will probably increase" (Gorner/Van, 6/28). Similarly, the AP/Arkansas Democrat-Gazette reports, "experts believe the continuing research into the human genome ... is bound to attract more money to the biotech industry" (6/28).
A Major Letdown
Despite this enthusiasm, Celera's stock tumbled 10% on Monday, the day of the genome announcement, and fell again yesterday, closing down 21% since Friday, the Washington Post reports. Company executives now face the task of convincing investors that they can turn the research venture into a profit-making enterprise. Tony White, chair and CEO of Celera's parent company PE Corp., and Craig Venter, Celera's president, introduced potential stockholders yesterday to their concept of the company's long-range growth potential, which centers around plans to sell genome databases to biologists for analysis. Immunex Corp. of Seattle has been the first major biotech company to bite, and Celera also has signed deals with pharmaceutical companies. The company also maintains $1 billion in cash, executives note (Gillis, 6/28).
Not So Fast...
But regulatory clouds may be on the horizon for the biotech industry. The New York Times reports that the U.S. Patent and Trademark Office is set to implement new guidelines that will restrict companies' ability to patent genes. The high-speed gene sequencing researchers use is "allowing genes ... to be discovered en masse, without knowing the functions of the proteins produced by the genes." Some are concerned that granting patents to these genetic road maps, which are not applicable products in themselves, would discourage other researchers from working to find out what the genes actually do and how they relate to diseases. "You have people who haven't contributed to subsequent discovery being able to lay claim to those discoveries," Rebecca Eisenberg, a University of Michigan law professor, said. Moreover, patenting each gene could create a time-consuming and expensive "minefield," as doctors would have to determine who owns what rights before beginning research. Still, the patent office has approved applications from some companies that do not know the precise functions of the genes they are patenting. Under the new guidelines, the Times reports, "gene fragments will probably not qualify for patents." But fully characterized genes, such as the one that predisposes women to breast cancer, will be patentable (Pollack, 6/28).