Now, Celera begins job of selling itself
By Peter Gorner
and Jon Van
(Chicago) Tribune Staff Writers
June 28, 2000
A day after a White House announcement of what was called one of the most wondrous scientific achievements in human history, the top private researcher into the human genome came to Chicago Wednesday to do what any businessman would do: hustle investment bankers.
J. Craig Venter, president of Celera Genomics, sang the praises of his firm's technology as he pitched investors on the financial implications of mapping the human genome.
The one-day turnaround from President Clinton's lofty talk about "a day for the ages" to Venter's bottom-line pitch in Chicago shows one of the other wonders lurking within the human genome?huge potential profits.
Venter and his company are the embodiment of the private effort to tap into the wealth of secrets in human genes. Government scientists call Venter "an intruder, a faker and a blabbermouth."
Everyone agrees, though, that had Venter not come along, there would have been no announcement Monday that sequencing the human genome was nearly complete.
The company he is associated with, PE Corp., once a firm that made specialized genetic sequencing machines, diversified in a way enviable in the Darwinian business world: It created a subsidiary that used its own machines to create competition with government and university labs plodding toward a map of the human genome. When the government scientists saw how swiftly the private company was doing the same work, they had to buy the machines for themselves.
In fact, the way Venter and principals of the company tell it, the profound, even noble quest to chart the human genome was spurred on by a company just looking to create a bigger market for its machines.
It is, in a sense, a sales story for the ages.
Calling technology "the unsung hero" of the genome accomplishment, Venter said what automation did for gene sequencing, it will soon do for analyzing genetic information and producing tests and therapies to benefit human health.
"We're at the starting point for business to change the way science and medicine are practiced," Venter said at a news conference after the meeting with bankers.
The massive, 10-year, multibillion-dollar effort to decode the 3 billion base pairs of DNA on all the human chromosomes is expected to revolutionize medicine in the coming decades and let pharmaceutical companies make incalculable billions of dollars by turning genome research into new treatments for a dizzying array of disorders.
Monday's White House announcement signified the completion of the first rough draft of the book of life by the warring sides, Celera and the federal genome project, which is based at university and government labs primarily in the U.S. and England. The two sides declared a last-minute d‚tente in what had become a brawl more reminiscent of mud wrestling than science.
Venter was accompanied to Chicago by Tony White, chairman of Celera's parent company, PE (formerly Perkin-Elmer) Corp.
A former Chicagoan who was a top executive at Baxter for many years, White hired Venter, founded Celera (derived from celerity, which means swiftness). The company has a tradition of developing and marketing equipment used by scientific researchers in academic and industrial laboratories.
White explained how the firm's entry into the race to map the genome was little more than an effort to build a market for the high-speed sequencing machines PE makes.
"As I watched the progress of the international Human Genome Project over the years, I wasn't impressed," White recalled. "I thought there should have been more aggression in doing something so important.
"Yet, if we'd offered them our new high-speed sequencing machines, they'd probably put them in their R&D lab for a year and evaluate them. Then they'd try and get a competitor to make one. After that there'd be negotiations. And sometime down the road, they'd slowly start to retool. That's what happens when there's no competition."
So he decided, in effect, to put the fear of God into the government. And also to turn his company from just an instrument maker into an active player.
"If we entered the contest, it could wake up the whole community. And we hoped that if we completed the genome, it would stimulate enough interest in gene sequencing to justify our risk in doing it," White said.
As soon as the international consortium learned of the project headed by Venter using PE's gene analyzers, the other scientists called to find out if they could use the machines for their project.
"They got very competitive, and indignant, and were determined to win. That was great for us. We sold a lot more gene sequencers," White said. "'How much do they cost?'" they wanted to know. We said, 'They're $300,000 apiece. How many do you want?' They said, 'A couple hundred.'"
Celera gave the Human Genome Project an enemy, something to worry about, and to go before Congress and justify its budget, Venter said.
"The hostility surprised me. And a lot of the charges were created by people just defending their budgets. So we were depicted as an evil company intent on sabotaging this great enterprise," he said.
"Charges were made that we wanted to patent the genome. If we wanted to do that, we could. We're a private company. But we said we're not. Why not believe us? We're giving away the whole sequence. That's the shallow thing. It's the interpretation of the sequence that's going to change all our lives.
"We've been so focused on getting there, on completing the sequence, that we've analyzed less than 1 percent of the information."
Without the competition created by PE, the rapid advance in genetic sequencing probably wouldn't have occurred and PE's revenues of $1.2 billion last year would have been much lower, White said.
PE expects to follow a similar strategy in the follow-up research. Celera will sell genetic information to pharmaceutical and biotech firms, exploit its parallel computing system and unique genetic database. White said he expects this information and service aspect to be profitable within three years.
By using the new technology developed by PE to create medical tests and therapies, Celera may stimulate demand for that same technology by other companies and academic researchers just as it did with the gene analyzers.
The next step will be equipment that automates the sequencing of proteins that are produced by the genes and understanding how slight differences in the genetic makeup of individuals can radically affect their health.
Celera's leadership in pushing gene sequencing not only boosted sales for its parent company, it also gives Celera a significant leg up on competitors in supplying genetic data to drug companies and biotech firms, said Winston Gibbons, an analyst with the Chicago-based William Blair & Company.
"Celera has proprietary data, computer software and a computer system that make its services attractive," said Gibbons. "It's cost-effective for a pharmaceutical firm to pay Celera $15 million a year to buy genetic information. As Celera builds on its proprietary information base, its lead over competitors will probably increase."
Venter said a company secret weapon is its mastery of the complete genetic structure of the mouse, which is nearing completion.
"The mouse genome gives us a good way to compare things we find on the human genome," he said. "Mice and men have a lot of the same genes." |
