By Lisa Seachrist

Washington Editor

Originally looking to raise $300 million to expand its business into functional genomics, Celera Genomics Group garnered $855 million in a public offering.

The company sold 3.8 million shares of newly issued common stock at $225 per share. When parent company PE Corp., of Foster City, Calif., first registered the shares with the Securities and Exchange Commission for its Rockville, Md.-based operating group, Celera, the offering was supposed to encompass 1.615 million shares. Instead, the offering more than doubled both in shares offered and cash raised.

The offering could still gross another $129 million if the underwriters exercise their overallotment option on 242,250 shares. Morgan Stanley Dean Witter and Goldman, Sachs & Co., both of New York, co-led the offering. SG Cowen Securities Corp. and ING Barings LLC, both of New York, were co-managers.

Without considering potential overallotment shares, Celera has 56.2 million shares and a market capitalization of $13.249 billion.

PE Corp. and Celera are under an SEC-mandated quiet period and were unavailable for comment.

"They certainly raised more money than they expected," said Paul Boni, senior analyst with Punk, Ziegel & Co. in New York. "By raising this much cash, a whole new spectrum of things becomes possible. It could really prove catalytic in expanding the horizons of the business."

With the completion of this offering, Celera appears ready to move to the next stage after sequencing the human genome. In the prospectus, Celera noted its progress to date in sequencing the human genome is well ahead of schedule, making it an ideal time to expand its business. Celera intends to use the money raised to focus on functional genomics, proteomics and personalized medicine.

The company is also proposing to create diagnostic tests using information on single nucleotide polymorphisms (SNPs) derived from the human genome sequencing effort. A number of companies are actively involved in the SNP business, but Celera said in its prospectus it has the upper hand because it has the world's largest DNA sequencing and genotyping facility; access to proprietary, comprehensive genomics information; and extensive supercomputing infrastructure and bioinformatics capabilities.

Boni said he expected the company to first expand its functional genomics business before moving into personalized medicine. He also noted the company's access to Foster City, Calif.-based PE Biosystems' sequencing technology can't be underestimated.

"Combined with the cash they raised, this makes them a formidable competitor," Boni said.

Separately, Amersham Pharmacia Biotech has named Celera in a patent litigation over patents related to the use of energy transfer dyes, which have been fundamental in enabling high-throughput DNA screening. London-based Amersham is attempting to enforce its patent in an action against both PE Biosystems and Celera. That litigation is expected to go to trial sometime this year following a recent decision from the Northern District Court of California.

Celera's stock underwent a 2-for-1 stock split on Feb. 18, when the stock was trading at almost $300 a share. The stock has continued to rise since then. Celera's stock (NYSE:CRA) closed Wednesday at $235.50 a share, down $8.50.