By Lisa Seachrist

Washington Editor

Just three months after it began the project, Celera Genomics, a PE Corporation business, has completed the sequencing phase in unraveling the Drosophila melano-gaster (fruit fly) genome.

With the sequencers freed from the insect project, the Rockville, Md.-based Celera has turned all of its sequencing resources to the human genome effort and has begun assembling the sequence fragments of the fruit fly genome. Celera aims to have a comprehensive sequence of the human genome completed by 2001.

"This validates all the technical phases of our approach," said J. Craig Venter, president and chief scientific officer of Celera. "Four years ago it took the same number of people the same amount of time to sequence the Haemophilus influenzae genome. The Drosophila genome is 70 to 80 times bigger - that's a pretty spectacular improvement."

Celera employs a "whole genome shotgun" approach to sequencing genomes, Venter said. The first step involved the creation of DNA libraries containing the entire genome. The DNA is then chopped up into manageable sizes and sequenced. Once all of the fragments have been sequenced, the company uses high-powered, parallel computers to arrange the sequences in the appropriate order. Finally, any sequence gaps are filled in using special sequencing techniques.

The Drosophila project has completed its second phase and Venter expects the final sequence to be ready by the end of the year, with publication of the results in collaboration with the Berkeley Drosophila Genome Project (BDGP) in early 2000. The BDGP is comprised of research groups working at the University of California at Berkeley, Lawrence Berkeley National Laboratory, Baylor College of Medicine in Houston, and the Carnegie Institution of Washington.

In sequencing the Drosophila genome, Celera claims to have discovered thousands of new genes even though Drosophila is one of the most highly studied organisms in science. Venter expects the human genome sequencing effort to uncover 1,000 to 3,000 genes a day, many of which will be novel genes.

"We know that we have everything in place to sequence the human genome," Venter said. "By the end of the year, we will have over 70 percent of the genome sequenced. In the next six months, we will have 90 percent of the genome sequenced."

When the genome is 90 to 97 percent completed, the company can start putting the pieces together.

"We are definitely on target for 2001 - we could potentially be done sooner," Venter noted. "The next six months is going to be an exciting time period for all of biology."

Celera's stock (NYSE: CRA) closed at $34.812 a share, unchanged.