APPLERA CORPORATION Annual Report
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312849_Applera_REVISED0914.qxd 9/17/01 6:42 PM Page 2 2001APPLERA CORPORATION Annual Report APPLIED BIOSYSTEMS CELERA GENOMICS 312849_Applera_REVISED0914.qxd 9/17/01 6:42 PM Page 3 Table of CONTENTS Letter to Stockholders Applera Corporation 3 Applied Biosystems Group 5 Celera Genomics Group 7 Celera Diagnostics 8 Financial Review 10 Directors and Officers 109 Stockholder Information 110 APPLERA CORPORATION Mission: To provide the world’s leading technology and information solutions that help life scientists understand and use the power of biology. Business Groups: Applied Biosystems and Celera Genomics Headquarters: Norwalk, Connecticut APPLIED BIOSYSTEMS GROUP Profile: A leading provider of technology solutions for life science research and related applications, with customers in over 100 countries. Headquarters: Foster City, California New York Stock Exchange Symbol: ABI CELERA GENOMICS GROUP Profile: A biopharmaceutical business and leading provider of genomic and related medical information, enabling therapeutics discovery using proprietary scientific capabilities for the group’s internal efforts and in partnership with pharmaceutical and biotechnology companies. Headquarters: Rockville, Maryland New York Stock Exchange Symbol: CRA CELERA DIAGNOSTICS Profile: A joint venture between Applied Biosystems and Celera Genomics that is leveraging capabilities from both businesses to develop new molecular and protein diagnostics. Headquarters: Alameda, California 312849_Applera_REVISED0914.qxd 9/17/01 6:42 PM Page 4 To our stockholders: Applera Corporation continues to be a leader This should allow us to more effectively in the life science revolution – a revolution many anticipate customers’ needs and bring products believe could define this new century. We enter to market in a more timely manner, while fiscal year 2002 at the threshold of major maintaining the technological innovation that advances in the field of disease diagnosis and has made us a premier provider of life science therapeutics discoveries, made possible in part by tools. At the Celera Genomics Group, we are life science technology from Applera businesses. now organized to build a drug discovery As we go forward, we have the scale, financial business on the strong foundation established strength, and technology leadership required to by our pioneering work on the human genome. remain at the forefront of discovery. And we initiated a new joint venture called In any time of major change, there are Celera Diagnostics, which we believe will help victories to celebrate and challenges to face. In us apply our significant knowledge of genomics fiscal 2001 we experienced both. We published to improved disease diagnosis. the sequence of the human genome in a major At Applied Biosystems, our efforts have been scientific journal – a seminal event in the focused on defining and executing the strategies history of science. We also experienced that should ensure long-term sustainable growth challenges in some markets resulting in after a period of extraordinary sales related to the financial performance that was not up to the sequencing and assembly of the human genome. level of the past several years. But more While sequencing continues to represent a importantly, we completed a comprehensive significant portion of Applied Biosystems’ look at our organizations to determine how best revenue, the investments we have made in to capitalize on the unprecedented sequence detection products and services for opportunities we have to make a difference in analyzing human genetic variation are also the treatment of disease. creating significant opportunities. A significant In late July, we announced a bold step need exists to better characterize specific diseases towards realizing a return on our substantial as well as the genetic profile of each patient. The investment in sequencing the human genome. high-throughput genotyping enabled by our We are moving into the next phase of our multi- sequence detection systems is expected to play year genomics strategy – a comprehensive an important role in answering these challenges. program for commercializing products based on Technologies and services that help discoveries from the genome. The program is researchers determine which human proteins designed to leverage the combined scientific and are present under certain conditions, the commercial expertise of the three Applera function of those proteins, and which ones businesses to discover genetic variations called could be affected by new therapies, make up single nucleotide polymorphisms (SNPs) in genes another critical chapter of the Applied and regulatory regions, to identify disease-related Biosystems story for the future. Although gene associations, to monitor how genes are protein study presents a unique set of expressed and to develop and market products challenges, the Voyager™ TOF/TOF™ Workstation based on those discoveries. Over the next year, has the potential to modernize proteomics in we plan to invest approximately $75 million in much the same way as the ABI PRISM® 3700 DNA this program to capitalize on the discovery Analyzer revolutionized genomics. These foundation we have built. Voyager systems, in combination with a broad Within the Applied Biosystems Group, we spectrum of other proteomics technologies from evolved from a business unit structure to a more Applied Biosystems, form the core of the new integrated marketing and research organization. proteomics facility at Celera Genomics. APPLERA CORPORATION Annual Report 2001 3 312849_Applera_REVISED0914.qxd 9/17/01 8:37 PM Page 5 Fiscal 2001 was a year of important many technology sectors, life science included. achievements at Celera Genomics. Celera now For the first time during my tenure, we has information subscription agreements in experienced significant stock price reduction. place with more than 50 academic and Nevertheless, our overall financial status commercial customers. Publishing an accurate remains strong. While down substantially from assembly and initial interpretation of the human last year, our market capitalization has grown genome in February and completing sequencing, from $1.5 billion at fiscal 1995 year-end to $8.1 assembly and annotation of the mouse genome in billion at the end of fiscal 2001, a compound April were both remarkable achievements. Celera annual growth rate of 33 percent. Applera also made its first significant steps to evolve from remains a healthy corporation with numerous a business focused on gene sequencing to one growth prospects and strong technologies. We that uses its genomic information to pursue drug have a committed group of people and discovery. This activity was illustrated in the significant capital resources at our disposal, and proposed acquisition of Axys Pharmaceuticals, a the ability to make investments where we see fit. company focused on biopharmaceutical drug In the coming year, we intend to expand our discovery. position as one of the world’s preeminent The principal element of Celera’s next phase suppliers and developers of technologies and is scale, similar to what was accomplished information solutions for the life sciences. At during Celera’s formation. Going forward, we Applied Biosystems, this means determining intend to leverage our extensive bioinformatics where the market opportunities are and getting infrastructure and unparalleled information there first. At Celera Genomics, this includes resources into drug development and disease building the skill sets needed to create the therapies in an effort to speed medical advances. biopharmaceutical business of the future. The formation of Celera Diagnostics, a joint Ultimately, the goal of our work remains the venture between Applied Biosystems and Celera same: delivering maximum long-term Genomics, is intended to take advantage of stockholder value by providing technology and Celera Genomics’ discovery capabilities and information solutions that help life scientists Applied Biosystems’ broad instrument platforms understand and use the power of biology. Our and technologies. Taken together, these objective is to accelerate the transformation of resources give us a unique competitive healthcare – from the way discoveries are made advantage in molecular diagnostics and the to the way drugs and therapies are developed opportunity to play a significant role in this and delivered. With each passing year, the value new high-growth market, which is predicted to of this mission becomes clearer. grow by 25 to 35 percent annually. Our My confidence in our ongoing ability to development efforts will focus on specific tests develop and realize our vision of innovation that may have the potential to predict and continues to be bolstered by our Applera team, diagnose some of the world’s most devastating over 5,000 strong, around the world. They are health problems. We anticipate that this new one of the major reasons for our great success venture will add to the long-term value of over the past several years and will surely be the Applera. major driver of our future achievements. To lead this effort, we were very pleased to add Kathy Ordoñez, formerly president and chief executive officer of Roche Molecular Systems, to our senior management team. These events and achievements took place Tony L. White Chairman, President and Chief Executive Officer against a backdrop of fluctuating stock values in Applera Corporation 4 APPLERA CORPORATION Annual Report 2001 312849_Applera_REVISED0914.qxd 9/17/01 8:37 PM Page 6