Applera Corp. is considering untwining its double-helix corporate structure by spinning off its Celera Group genetic sequencing division as an independent company.
Norwalk-based Applera and subsidiaries Celera and Applied Biosystems were spun out of Boston-based PerkinElmer Inc. in 1998.
Celera would gain fame over the next few years as it raced the government-backed Human Genome Project to sequence human DNA, using high-tech equipment produced by Applied Biosystems.
In 2000, Applera raised $944 million in 2000 in an initial public offering of a “tracking” stock for Celera. By the close of 2002, Celera had switched its strategy to developing drugs using genomics and proteomics. It abandoned that effort last year, selling the business to Schering AG and jettisoning 240 people in the process. Celera is now working to build a diagnostics business helping scientists identify molecular causes to ailments like cancer and bird flu.
Celera is still an impressive earner in its own right, with its remaining 290 employees in Rockville, Md., generating $767 million in revenue for the fiscal year ending in June.
Sales are down 16 percent from 2005, however; during the same stretch, corporate sibling Applied Biosystems increased revenue 6 percent to $2.4 billion, selling lab equipment to identify and synthesize genetic material and proteins.
As of June, Applied Biosystems managed 5,000 employees from its Foster City, Calif., headquarters.
Between February and August this year, Celera”™s tracking stock was down 20 percent to just above $13 a share. Over the same period, Applied Biosystems”™ tracking stock lost 7 percent of its value to under $32 a share.
“While the tracking-stock structure has facilitated the interests of both Celera and Applied Biosystems, the evolution of our businesses makes it timely to explore the potential benefits of these businesses going their separate ways,” said Tony White, chairman and chief executive officer of Applera, in a prepared statement.
Applera set the stage in 2006 for the contemplated split, when it transferred 50-50 a Celera-Applied Biosystem joint venture to Celera. This past August, Applera”™s board took two more major steps. It tasked Morgan Stanley to explore alternatives to the tracking stock structure, including the possibility of creating two independent publicly traded companies. At month”™s end, the company executed a $600 million buyback of Applied Biosystems tracking stock, which could pave the way for an equity IPO of Celera shares.
It is unclear what impact a schism in Applera”™s bicoastal operating units might have on Applera”™s corporate staff, which numbers 290 people, and Norwalk headquarters. At 61, White is nearing traditional retirement age; besides his role as Applera CEO, he has also run Applied Biosystems since last October when the unit”™s president left to become CEO of another company.
Since 2002, Celera has been run by Kathy Ordonez, who earlier in her career worked at the former Danbury giant Union Carbide. Celera Chief Medical Officer Samuel Broder is the former director of the National Cancer Institute.
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