Genentech Posts Quarterly Profit of 61 Cents a Share, Above Estimates
Genentech, a maker of medical biotechnology products, reported earnings of 61 cents a share for the fourth quarter excluding items, better than analysts' estimates of 56 cents.
The company attributed the improved earnings to surging sales of its new treatment for blindness, Lucentis, as well as strong demand for its cancer drugs.
Genentech, which is majority-owned by Switzerland-based Roche Holding, earned 31 cents a share in the year-ago quarter.
The company reported that net income for the most recent period soared 75%, to $594 million. Operating revenue rose 43%, to $2.7 billion.
Including expenses not related to ongoing operations, the company earned 56 cents a share.
Lucentis, which was almost immediately adopted as the first treatment option for age-related macular degeneration and has been vanquishing the competition since its June approval, had
sales of $217 million in only its second full quarter on the market, easily topping Wall Street consensus estimates of between $150 million and $173 million.
Lucentis sales of $153 million in the previous quarter had crushed analyst expectations of $32 million to $40 million.
Genentech said in October it expected 2006 full-year earnings per share growth of 65% to 70%, excluding items, and it delivered a 74% increase for the year.
The company expects earnings per share to grow 25% to 30% in 2007, excluding items.
Total revenue for the fourth quarter of $2.71 billion exceeded analyst estimates of $2.54 billion, as sales of its key drugs all grew by double digits over 2005 levels.
U.S. sales of Avastin, the colon cancer drug that in October was approved to also treat lung cancer, surged 36% to $490 million for the quarter, also edging Wall Street expectations of about $485 million.
Breast cancer treatment Herceptin saw U.S. sales jump 29% to $322 million for the quarter, while the sales of Rituxan for rheumatoid arthritis and the skin condition psoriasis rose 16% to $550 million.
After soaring 70% in 2005, Genentech shares limped through 2006, falling about 12% for the year. By comparison, the broader American Stock Exchange Biotech Index was up nearly 11% in 2006, although the shares of rival biotech giant Amgen were off about 13% for the year.
On the last day of the fourth quarter, Genentech entered a pact with pharmaceutical firm Exelixis under which Genentech agreed to pay the latter company $40 million in upfront and milestone payments for the development of a potential cancer treatment called XL518.