Genentech stock jumps on earnings projection
Genentech says earnings will rise by up to 50 percent in 2006, stock price gains more than 5 percent.
By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - Genentech's stock jumped more than 5 percent on Friday after the biotech said its earnings would surge by up to 50 percent in 2006.

Genentech (up $4.28 to $86.87, Research), the world's second-biggest biotech behind Amgen (down $1.09 to $72.75, Research), outlined its business plans through 2010 and said it expects non-GAAP earnings per share to jump by 40 percent to 50 percent in 2006.

The biotech, based in South San Francisco, also said it expects to bring 15 new products or indications, which are additional uses for existing drugs, onto the market through 2010. Genentech also said it plans to begin clinical trials on 20 new compounds, which would eventually result in new drugs if the trials are successful.

Genentech also plans to buy land in Hillsboro, Ore., to build a new factory, which would go online by 2010.

Shiv Kapoor, an analyst at investment firm Montgomery & Co. who recently upgraded the company to "buy," said he would not be surprised if Genentech beats its own earnings forecast.

"I think they are being conservative," said Kapoor. "The drugs that they have are selling like hotcakes."

Genentech's worldwide sales totaled $5.5 billion in 2006, a 46 increase from the year before. The company's top-selling drug, Rituxan, a treatment for rheumatoid arthritis and non-Hodgkin's lymphoma, totaled $1.8 billion in U.S. sales in 2005. Avastin, the company's treatment for colorectal cancer that is combined with chemotherapy, totaled $1.1 billion in U.S. sales.

Kapoor projects that annual Avastin sales will increase nearly seven-fold to $7.5 billion by 2010, because in addition to colorectal cancer, the drug is also being tested as a treatment for lung, breast and neck cancer. Kapoor expects Avastin to be approved by the Food and Drug Administration as a lung cancer drug in the second half of 2006.

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To read more about the biotech industry in 2006, click here.

Genentech: The best place to work now. Read moreTop of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.