Genentech Profit Rises but Main Drug Sales Fall Short
Genentech reported a profit that rose 6.4 percent and beat forecasts, but sales of all four of the company's main drugs fell short of expectations.
On an adjusted basis, the biotechnology firm said it earned $737 million, or 69 cents a share in the fourth quarter, up from $659 million, or 61 cents a share in the same period last year.
Sales at Genentech rose to $2.97 billion, compared with $2.71 billion last year.
Shares of the company lost more than 2 percent in extended trading. The stock closed at $70.64 Monday, a decline of 1.2 percent.
For full-year 2008, the company expects earnings per share of $3.30 to $3.45, compared with the $3.38 per share forecast by Wall Street analysts.
Increased sales of Genentech's Avastin cancer medicine more than offset a decline in its Lucentis treatment for the leading cause of adult blindness, but revenue from all of the company's major drugs fell short of what analysts expected.
"Every single product relative to Street consensus was light. When you've got the biggest products that are the biggest growth drivers -- Avastin and Lucentis -- light, that's disappointing," said Analyst Mike King of Rodman & Renshaw.
"It's not the economy -- it's just a company that has to figure out how to reinvigorate growth, and unfortunately that is not part of the picture, at least for the first half of '08," he said
Quarterly U.S. sales of the colon-cancer and lung-cancer drug, Avastin, which most analysts view as the key barometer of Genentech's fortunes, rose 23 percent to $603 million, but still fell short of Wall Street expectations for sales near $616 million.
The U.S. Food and Drug Administration is expected to decide by late next month whether Avastin will also be approved to treat advanced breast cancer, but an advisory panel to the agency recommended in December that the application be turned down.
Genentech's fourth-quarter revenue rose 9 percent to $2.96 billion, which was in line the $2.96 billion expected by Wall Street. U.S. product sales rose 7 percent to $2.2 billion.
Domestic sales of non-Hodgkin's lymphoma drug Rituxan rose 6 percent to $596 million, while U.S. sales of breast cancer treatment Herceptin rose 2 percent to $327 million.
Sales of eye-disease medicine Lucentis fell 9 percent to $197 million.
Swiss drugmaker Roche Holding, which owns a majority stake in Genentech, records sales of Genentech drugs outside the United States.
-- Reuters contributed to this report.