Vita Genomics hopes for biotech stardom

Taipei Times: Before moving back to Taiwan to set-up Vita Genomics (賽亞基因科技), you were involved in sequencing the human genetic code as the principle scientist at Celera. Could you give our readers a little background about that?

Ellson Chen (陳奕雄): Celera Genomics, at that time was part of PE Corp (hereafter known by its new name, Applera). Applera in 1998 was mainly a manufacturer of instruments, actually that was the main work in my lab. I ran a lab of about 35 people. We developed a new sequencer ... which saved a lot of labor and time [in gene sequencing].

So, when they were talking about how to market this new instrument, Applera decided to form Celera. They decided that the best way, and I think it was proven right, was not to sell this instrument to the Human Genome Consortium, the best way is to do it yourself.

Applera got to sell over 1,000 units of that machine, for US$300,000 apiece. So a quick calculation will show you that 1,000 units at US$300,000 each, that gets you US$300 million dollars. So they invest US$300 million to start Celera and make it back in the first year just by selling to the Human Genome Project. So I thought that was a very clever marketing scheme ... and the business model is simply this: During a gold rush, there will be lots of people hunting for gold, but the ones selling the tools are always going to do well.

So Applera's business model was to decide basically to have two wings, one is Applied Biosystems which sells tools, and the other is Celera, that sells information. Anyone wanting to dig for gold is going to need both. So, it was a very interesting business model, it has worked out quite well.

TT: When news of your venture started to come out, it sounded like Celera Genomics would be a major shareholder in what would be called Celera Asia, not Vita Genomics. This has changed drastically. The company has a small stake in Vita now. Why the change?

Chen: Actually, Celera Asia was our code name when I was still with Celera. The initial idea when I was on the management team at Celera was we never actually addressed the needs of Asian countries. Later on, Celera also had some discussions with Japan.

So Celera Asia was really just a code name within Celera. In the beginning, Celera wanted to fund the whole project and make this a fully owned subsidiary of Celera.

We had a counter argument based on my previous visits. I visited Asia about 20 times over a three year period, including China, Japan, Hong Kong, Singapore and various other places. Eventually, our conclusion was that you need local input for a program of this magnitude to work. So, if it's a subsidiary, it will be difficult to do these things.

So, when a company is wholly owned by the US, it is difficult to be received well by local people, especially local officers. So, it's difficult to get cooperation, particularly with biotech, due to the changes going on. So, we were saying you need local input. The best way to get local input is when you have local capital.

But Applera never actually had a custom of joining new ventures with anyone else. It's a company that either wholly owns or simply works together and doesn't own anything. So, eventually we came to the conclusion that it would be better to be a company all its own so then I decided at that time -- and agreed with management of Celera -- that I should jump out. In the long run it would be better for everyone.