Biotech Titan Genentech Profits Soar
Oct. 09, 2003
SAN FRANCISCO (AP) _ Boosted by continued strong sales of its two blockbuster cancer-fighting drugs and a one-time legal settlement extracted from a rival, biotechnology titan Genentech Inc. said its profit for the third quarter soared 70 percent.
For the quarter ended Sept. 30, the South San Francisco-based company on Wednesday reported net income of $152 million, or 29 cents a share, compared to $89 million, or 17 cents a share a year ago.
Excluding the combined $132 million it received from Amgen Inc. to settle a patent dispute and interest from an unrelated legal matter, plus other special expenses such as costs associated with a stock redemption plan, Genentech said it would have posted a profit of $143.9 million, or 27 cents a share. On that basis, the results exceeded the per share estimate among Wall Street analysts by 2 cents, according to research firm Thomson First Call.
Revenues increased 26 percent to $817 million for the quarter and the company reiterated that it would meet its goal of exceeding $3 billion in revenues and increasing profit by 20 percent before special charges for the year.
Sales of the non-Hodgkin's lymphoma drug Rituxan increased 26 percent to $371.7 million, compared to $293.9 million in the same quarter last year.
``Rituxan continues to be a market leader,'' said Myrtle Potter, Genentech's chief operating officer.
Breast cancer fighter Herceptin sales increased 11 percent to $107.7 million, compared to $96.7 million last year.
The company's stock price has more than doubled in the last year, due in large part to the company's announcement that its experimental colon cancer drug Avastin showed promise in a pivotal human experiment. Many analysts believe Avastin has the potential to be a $1 billion-a-year seller.
Last month, Genentech applied to the Food and Drug Administration for approval to market Avastin. The drug could be approved sometime in March, analysts said.
The company's newest drug, asthma fighter Xolair, accounted for $6.8 million in sales for the third quarter. The FDA approved the drug in July.
Chief Financial Officer Lou Lavigne warned that Genentech's expenses are expected to rise this quarter because the company plans to spend more money on marketing and sales of Xolair, Avastin and another experimental drug the company hopes the FDA will approve.