Tuesday, March 04, 2008

WBJ: Celera Leaving Maryland?

Celera moving to SF? This is from the WBJ...

Montgomery County fears Celera Group may move west
Washington Business Journal - by Vandana Sinha Staff Reporter

The once-behemoth Celera Group is preparing to split from its parent company and decide whether to shift its headquarters from Rockville to California. That has Montgomery County officials scrambling to keep the biotech company's address local.

By the end of March, Celera will choose Rockville or Alameda, Calif., for its corporate headquarters, announcing the decision in a registration statement it will file to sever the business from Norwalk, Conn.-based Applera Corp. and become a stand-alone public company.

Rockville's prospects, however, do not look good.

Celera mentioned Alameda as its headquarters in its latest quarterly and annual financial reports, printed on corporate letterhead with Alameda's Harbor Bay Parkway address because most corporate activities stem from there, said David Speechly, a Celera spokesman.

But he added that the company has yet to decide which coast it will call home.

Moving west makes sense: Head count in Rockville has dwindled from more than 550 in 2001 to roughly 25 people today, including only one senior executive who is one of the founders.

After owning 220,000 square feet on West Gude Drive in its heyday, the company now subleases 64,000 square feet and is marketing an additional 51,000 square feet of sublet space.

Meanwhile, Celera made two acquisitions last year that bumped up its San Francisco Bay Area presence to three locations and roughly 525 employees.

"It makes sense for [a California move] to occur given where management is and where a majority of employees are," Speechly said.

Montgomery County officials said they are pursuing agreements with Celera to keep the headquarters nestled in Maryland's Interstate 270 corridor. The county has "discretionary income" it can use for potential incentive packages, but only if Celera increases its presence there.

"We are going to see if there is anything we can do to persuade them to stay," said Bernadette Musselwhite, a business development specialist with the county's Department of Economic Development.

Even if Celera keeps a Rockville office open, the headquarters departure would be a psychological blow. A homegrown company founded 10 years ago by bioscience maverick Craig Venter, Celera made global headlines when it mapped the human genome in 2000 and its stock price soared to nearly $250 a share.

"That does take away a keystone company," said Ric Zakour, executive director of MdBio, a division of the Tech Council of Maryland. "It would be unfortunate if they left, but I don't know that they have really deep ties to this area [now] other than historical ones."

A change in Celera's business model has restricted its Rockville reach. Although the company became famous as a genomics leader, that success brought few sales. Celera turned to drug development, then switched in 2006 to the more revenue-friendly molecular diagnostics field, halting drug discovery programs based mostly in Rockville.

Since August, two rounds of layoffs have deflated the Rockville team from 100 in 2006 to roughly 25. The company's lease of its 115,000-square-foot building, one of two that had made up its campus before both were sold in 2005 to Columbia-based Corporate Office Properties Trust, expires in 2010.

Celera is growing in revenue and narrowing its losses, expecting to approach break-even status by the end of June, Speechly said.

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