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Genentech Tops Profit Forecasts but Drug Sales Short
By: CNBC.com | 10 Apr 2008 | 04:53 PM ET
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Genentech reported earnings that edged forecasts on increased demand for its cancer drugs, but sales of all four of its big brand-name drugs, including Avastin, fell short of forecasts.

Genentech earnings, first quarter, q1, 1q, profits
AP
The Genentech campus is seen in South San Francisco, Calif.

The widely traded pharmaceutical company said it earned 84 cents a share in the first quarter, excluding one-time items, compared with 74 cents a share on sales of $2.843 billion last year. Sales in the most recent quarter rose 7.7 percent to $3.06 billion.

The company was expected to earn 82 cents a share and see a 9 percent increase in sales to $3.113 billion, according to Thomson Financial.

Perhaps more importantly for investors, however, the company turned in sales figures for its biggest drugs that were short of forecasts.

Genentech sold $600 million worth of Avastin in the quarter, its most important cancer drug, compared with an expected $629 million.

"Genentech beat our earnings estimate, but Avastin sales were definitely light," said RBC Capital Markets analyst Jason Kantor.

"Everything else was fairly in line. So that's the news today, that Avastin was on the light side, and the stock trades very much on Avastin sentiment," Kantor said.

Among other major Genentech drugs, Rituxan sales reached $605 million, shy of the anticipated $607 million; Herceptin revenue was $339 million, compared with forecasts of $343 million, and Lucentis sales reached $198 million, compared with forecasts of $202 million.

Genentech shares were down about 1 percent in very choppy extended electronic trading. The stock [DNA  Loading...      ()   ] rose 0.37 percent to $78 during regular market hours Thursday.

"They don't get a gold star, but people were not expecting much out of this quarter ... People are looking for Avastin growth in breast cancer," said Analyst Mike King of Rodman & Renshaw, noting that FDA approval for that indication came too late in the quarter to have a major impact on sales.

On a non-adjusted basis, the world's second-largest biotechnology company posted a net profit of $790 million, or 74 cents per share, compared with a profit of $706 million, or 66 cents per share, a year earlier.

Shares of Genentech rose about 21 percent in the first quarter, closing at $81.18 March 31. The increase topped several broader indexes, which fell amid increasing concerns over the credit crisis and weakening economy. 

- Reuters contributed to this report.

© 2009 CNBC
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