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Life Technologies CEO projects $100M in stimulus benefit

Life Technologies Corp. will add about $100 million in revenue next year from selling its gene-analyzing tools to scientists receiving new U.S. medical research funds, Chief Executive Greg Lucier said.

Carlsbad-based Life Technologies is benefiting from $10 billion allotted for science funding in President Barack Obama’s economic stimulus bill, Lucier said Thursday in an interview. Those funds, and an additional $1.1 billion from the government for research to compare medical treatments, will boost demand for gene mapping to about $1.5 billion a year, Lucier said.

Life Technologies Corp. (Nasdaq: LIFE), formerly known as Invitrogen Corp., agreed to buy Applied Biosystems Group for $6.7 billion on June 12, 2008. The company gained the biggest maker of equipment to decipher DNA as scientists race to make gene testing more widely available. Life Technologies had revenue of $1.62 billion last year.

"Gene sequencing is in its infancy right now, where the Internet was in 1990," Lucier said in the interview. "This will be the new stethoscope for the 21st century."

Life Technologies is competing with Roche Holding AG, of Basel, Switzerland, and San Diego-based Illumina Inc. (Nasdaq: ILMN) to dominate a market for gene sequencing that may generate annual revenue of $5 billion within five years. To be more competitive, the company has a team of 25 employees that help scientists apply for federal research grants for projects using Life Technologies equipment.

"This market is going to grow exponentially, driven by the government stimulus money and the fact that a little research begets more research, all of which will have a genetic component," said Les Funtleyder, an analyst with Miller Tabak & Co. in New York, in an interview Thursday. He provided the $5 billion estimate for the gene-sequencing market.

Human genome

Scientists broadened their exploration of the body’s genes with the Human Genome Project, an effort to decode the entire 6 billion letter DNA code inside each human cell that used Applied Biosystems’ technology. The project cost $2.3 billion and took 13 years to complete by 2003.

DNA contains directions for forming all the body’s cells and organs. The instructions are written in a code of chemicals, called bases, which cells translate into their proteins, enzymes and other molecules.

There is an "expectation of a rising tide of government funding for genomic research in 2010," said Matthew Scalo, an analyst with Canaccord Adams in San Francisco, in a note to clients Thursday.

Government project

Life is taking part in a government-led international project with Roche and Illumina to search the genes of 1,000 people for differences that might help to explain and treat diseases.

Health spending in the United States is estimated to reach $2.6 trillion this year, or 17 percent of the economy, according to the Health and Human Services Department. Obama said during a news conference on Feb. 9 that health-care costs are "crippling" businesses. During his campaign he said reviewing how well different treatments work is important to improve care and lower costs.

About one-third of U.S. annual health spending goes toward remedies that don’t help patients, Peter Orszag, Obama’s budget chief and former head of the Congressional Budget Office, told the Senate Finance Committee in June 2008. Ranking drugs and medical devices will save money and boost quality, Orszag said.

Life Technologioes shares lost 20 cents Friday to close at $40.05, near its 52-week high of $44.65.

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