Reaching a scientific milestone at least four months ahead of industry expectations, biotechnology company Celera Genomics Group announced Thursday it had taken the first step in unlocking the human genetic code by sequencing the complete genome. This landmark has researchers predicting it will bring about a revolution in understanding mankind's molecular makeup and the development of medicines. The news sent biotech stocks soaring.
Stock in Celera, an 18-month-old spinoff of Rockville, Maryland-based PE Corp., jetted up 30 points, or 26 percent, to 145 on the New York Stock Exchange, on top of a more than 50-percent sail the day earlier.
The mapping of the human genome is considered a major scientific advance that will provide researchers with new insights into what role genes play in causing disease.
"Scientists hope that, when armed with [further] knowledge of how genes work, they will be able to develop powerful new drugs to target protein receptors for treatment of high blood pressure, cancer, and other maladies, based on a person's individual genetic makeup," Biochemistry Prof. David Lynch said.
Lynch said Celera now has to turn its attention to assembling and ordering the data through sophisticated computer techniques, a process that may take several months. After compiling this genetic catalogue, scientists hope to be able to chart each gene's function.
"The sequence is only the first step in understanding the human genome. It does not tell what the individual gene does - if at all the gene does anything - it just gives the order of the nucleotides," Lynch said.
Nucleotides are the Adenine, Cytosine, Thymine and Guanine compounds that make up the twisted double helix of DNA. Of the 3 billion base pairs that comprise human DNA, less than 1 percent encode for proteins.
Celera began sequencing the human genome last September, promising to finish the mapping project well before similar efforts by the publicly-funded Human Genome Project, an international consortium coordinated by the U.S. Department of Energy and the National Institutes of Health.
Celera - the name comes from the Latin word for swiftness - has said that speed is of the essence in charting the genome because it is the first step in helping drug makers develop better products.
Celera generates revenue by selling access to its gene database to academic researchers and pharmaceutical and biotech companies, each of which pay subscription fees of about $5 million to $15 million per year.
"The [biotech] rise over the past few months is being fueled in part by a new wave of investors who discovered the genomics field after losing faith [in] Internet companies who haven't turned in any profits," Merrill Lynch investment analyst Willis Greco said.
Like many biotech stocks, Celera shares have been on a left-lane ride in recent months. Shares have rocketed from a little over $7 in 1999 to $276 earlier this year, sparked by rumors that the company was near completion of charting the human genome leading up to Thursday's announcement that the company had completed the study.
"The pharmaceuticals need to know what genes do what, and for that they're going to ask a company like Abgenix or Celera, not Jeeves," Greco said. "You just can't find good help these days - you have to pay for it."
Celera stock had fallen from its highs last month after President Bill Clinton and British Prime Minister Tony Blair issued a statement suggesting that genomics findings should be made freely available to researchers, raising ownership questions about the future of findings made by private companies. Unnerved investors feared the two leaders' statements meant that companies involved in genomics would have to make their research public.
But Clinton allayed investor anxieties Wednesday by clarifying his comments, saying that genomics companies that discover something with "specific commercial application ought to be able to get a patent."
The subsequent bull run on biotechs immediately pushed up biotech shares - but the stocks are still well off all-time highs set last month, according to a Reuters report. As of Thursday afternoon, the Nasdaq biotech index was trading down about 20 percent from its all-time closing high hit in early March. The index is up about 20 percent since the beginning of the year.
Meanwhile, the Nasdaq Biotech Index climbed 7 percent Thursday, as Celera's announcement helped re-catalyze investor excitement in the turbulent biotech sector.
The American Stock Exchange Biotech Index rose about 9 percent.
Genome researchers across the board were able to profit by the momentum, including Sequenom Inc., which jumped 11-1/4 to 44-3/4, Genome Therapeutics, which gained 5-1/8 to 28-7/8, Myriad Genetics added 20 1/16 to 74, Human Genome Sciences Inc., grew 9-1/2 to 106-1/2, Abgenix Inc. put on 18-5/32 to 148-1/32 and Incyte Genomics, gaining 15-7/8 to 110-1/2.
Companies in related industries similarly gained ground: Drugmaker Amgen Inc. added 3-3/16 to 59-5/8, and Millennium Pharmaceuticals added 27-13/32 to 170-3/4 while Biogen Inc. gained 6-3/8 to 69/1/16.
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