had said that Celera would attempt to get patents on not more than about three hundred human genes. Even so, it was pretty clear that Celera was hoping to nail down some very valuable real estate in the human genome— billion-dollar genes, perhaps.
All summer long, Celera’s stock had bounced around between seven and ten dollars a share. Around Halloween, as investors began to realize that the company was cranking out the human genome—and filing large numbers of patents on genes—the stock jumped up to twenty dollars a share. On December 2, the Human Genome Project announced that it had deciphered most of the code on chromosome no. 22, the second-shortest chromosome in the human genome. This made the reading of the whole genome seem doable and imminent, and Celera’s stock began a spectacular, tornadic rise of a sort that has rarely been seen in the American stock market. It shot up that day by nine points, and closed at over seventy dollars. Then, after the market’s close on Thursday, December 16, Tom Gardner, a cofounder of the Web site called the Motley Fool, announced that he was buying shares of Celera for his own portfolio. It was known as the Rule Breaker Portfolio, and it featured small companies that broke the rules and changed the landscape of business.
Celera came of age during the huge rise of the Internet stock-market bubble. When the news broke that Celera had been named to the Motley Fool’s Rule Breaker Portfolio, a large number of people tried to buy Celera the next morning. They drove the stock up twenty points in a matter of minutes. A few months earlier, it had been trading at seven dollars a share. Celera’s stock price looked like it was headed for Mars.
I went to visit Celera one day the following week. On that particular morning the company’s stock could not even open for trading on the New York Stock Exchange. That morning, it seemed as though all of Wall Street wanted to buy Celera. That morning a tsunami of buy orders for Celera overwhelmed the specialists on the floor of the New York Stock Exchange. Trading in Celera froze, while the traders on the floor of the New York Stock Exchange waited for sell orders to trickle in. While the stock was halted—at $101 a share—I wandered around the building.
There was a feeling of shock in the air. Everyone was aware of the trading halt in the stock; everyone in the building owned Celera stock. Just about every employee of Celera was becoming a multimillionaire, and it seemed to be happening by the minute. I felt that very little work was getting done that day at Celera, except by the robots. Employees were checking the stock quote on Yahoo! and wondering what their net worth would be in an hour or two, when the stock would finally open and start trading.
I found Hamilton Smith in his lab, puttering around with human DNA in tiny test tubes. He seemed to be the only person at the company who wasn’t very affected by the situation. He was tired and looked sleep-deprived. He explained that he was renovating his house and had stayed up all night ripping carpet out of the basement. “The carpet guys were coming in to lay new carpet in the basement, and I didn’t feel like paying them to rip out the old carpet,” he said. “It would have been expensive.” Hamilton Smith owned many thousands of shares of Celera, and his net worth was already in the many millions. He also refused to buy a new car. He had driven to work that day, as usual, in his ’83 Mercury Marquis.
Smith passed a computer, stopped, and brought up a quote. Celera had finally opened for trading. It had gapped upward—that is, it had jumped instantly upward—by thirteen points. It was at 114. Smith’s net worth had jumped upward by around a million dollars in ten seconds. “Is there no end to this?” he muttered.
Craig Venter came into Smith’s lab and asked him to lunch. In the elevator, Smith said to him, “I can’t stand it, Craig. The bubble will break.” They sat down beside each other in the cafeteria and ate cassoulet from bowls on trays.
“This defies common sense,” Smith went on. “It’s really impossible to put a value on this company.”
“That’s what we’ve been telling the analysts,” Venter said.
Later that day, I ended up in Claire Fraser’s office at TIGR headquarters, a complex of semi–Mission style buildings a couple of miles from Celera’s offices and labs. Fraser, who was then Venter’s wife, was a tall, reserved woman with dark hair and brown eyes, and her voice had a New England accent. She grew up in Massachusetts. In high school, she said, she was considered a science geek. Her office had an Oriental rug on the floor and a table surrounded by Chippendale chairs. (“This is Craig’s extravagant taste, not mine,” she explained.) Two poodles, Shadow and Marley, slept by a fireplace.
“Before genomics, every living organism was a black box,” she said. “When you sequence a genome, it’s like walking into a dark room and turning on a light. You see entirely new things everywhere.”
Fraser placed a sheet of paper on the table. It contained an impossibly complicated diagram that looked like a design for an oil refinery. She explained that it was an analysis of the genome of cholera, a single-celled microbe that causes murderous diarrhea; TIGR scientists had finished sequencing the organism’s DNA a few weeks earlier. Much of the picture, she said, was absolutely new to our knowledge of life. About a quarter of the genes of every microbe that had been decoded by TIGR were completely new to science and were not obviously related to any other gene in any other microbe. To the intense surprise and wonder of the scientists, nature was turning out to be an uncharted sea of unknown genes. The code of life was far richer and more beautiful than anyone had imagined.
Fraser’s eyes moved quickly over the diagram. In effect, she was seeing cholera for the first time in the history of biology. And she could sight-read the diagram, in the same way that a good musician can sight-read Mozart and hear it in her head. “Yes…wow…,” Fraser murmured. “Wow. There may be important transporters here…. It looks like there could be potential for designing a new drug that could block them.”
The phone rang. Fraser walked across her office, picked up the receiver, and said softly, “Craig? Hello. What? It closed at a hundred and twenty-five?” Pause. “I don’t know how much it’s worth. You’re the one with the calculator.”
Their net worth had jumped above $150 million that day.
Fraser drove home, and I followed her in my car. The house she shared with Venter was in a wealthy neighborhood outside Washington. It sat behind a security gate at the end of a long driveway. Venter arrived in a brand-new Porsche. The car would do zero to sixty in five seconds, he said. In the vaulted front hall of the house there was a model of HMS
In the kitchen, Claire fixed dinner for the poodles, while Craig circled the room, talking. “We created close to two hundred millionaires in the company today. I think most of them had not a clue this would happen when they joined Celera. We have a secretary who became a millionaire today. She’s married to a retired policeman. He went out looking to buy a farm.” He popped a Bud Light and swigged it. “This could only happen in America. You’ve got to love this country.” Claire fed the poodles.
There were no cooking tools in the kitchen that I could see. The counters were empty. The only food I noticed was a giant sack of dog food, sitting on top of an island counter, and two boxes of cold cereal—Quaker Oatmeal Squares and Total. In the guest bathroom, upstairs, there were no towels, and the walls were empty. The only decorative object in the bathroom was a cheap wicker basket piled with little soaps and shampoos they had picked up in hotels.
We went to a restaurant and ate steak. “We’re in the Wild West of genomics,” Venter said. “Celera is more than a scientific experiment; it’s a business experiment. Our stock-market capitalization as of today is three and a half billion dollars. That’s more than the projected cost of the Human Genome Project. I guess that’s saying something. The combined market value of the Big Three genomics companies—Celera, Human Genome Sciences, and Incyte—was about twelve billion dollars at the end of today. This wasn’t imaginable six months ago. The Old Guard doesn’t have control of genomics anymore.” He chewed steak and looked at his wife. “What the hell are we going to do with all this money? I could play around with boats…”
Claire started laughing. “My God, I couldn’t live with you.”
“The money’s nice, but it’s not the motivation,” Venter said to me. “The motivation is sheer curiosity.”
In December, Celera and the Human Genome Project discussed whether it would be possible to collaborate. There was one formal meeting, and there were many points of difference. Meanwhile, Celera’s stock seemed to go into escape velocity. In January, it soared to over $200 a share. Celera filed to offer more shares to the public and declared a two-for-one stock split. Shortly after the split, the stock hit an all-time high of $276 a share (adjusted for the split). Celera’s stock-market value reached $20 billion, and Craig Venter’s wealth on paper surpassed $1 billion. It looked as though Craig Venter had become the first billionaire of biotechnology.
