Genentech beats earnings expectations

NEW YORK (CNNMoney.com) -- Biotech developer Genentech reported first-quarter earnings and revenue Wednesday that beat analysts' expectations.

Shares of Genentech lost 9 cents to $82.60 in after-hours trading.

Genentech (up $0.13 to $82.69, Charts) reported earnings excluding special items of $792 million, or 74 cents per share, up from $491 million, or 46 cents, in the first quarter of 2006.

The analyst consensus from Thomson Financial was for earnings of 67 cents per share.

The company said operating revenue rose 43 percent to $2.84 billion from $1.99 billion during the same period last year. The revenue topped analysts' expectations for a 38 percent increase to $2.74 billion.

For all of 2007, Genentech said it expects earnings per share to grow 25 to 30 percent, excluding charges. That's about in line with analysts have projected.

Sales for Genentech's blockbuster Avastin, a drug for lung and colorectal cancer, jumped 34 percent to $533 million in the first quarter from the same period in 2006.

Sales for Rituxan, a treatment for non-Hodgkin's lymphoma and rheumatoid arthritis, climbed 12 percent in the first quarter to $535 million.

The company said sales for its breast cancer drug Herceptin edged up 7 percent to $311 million.

Shiv Kapoor, analyst for the investment research firm Montgomery & Co., said Genentech "did really well," despite weak growth in Herceptin and Rituxan, because of strong growth in selling product to the Swiss drug giant Roche.

Genentech said sales to Roche nearly tripled in the first quarter to $292 million, compared to $75 million from the same period in 2006.

Genentech, based in South San Francisco, Calif., is the world's second-biggest biotech in terms of sales, behind Amgen (down $0.78 to $56.34, Charts), based in Thousand Oaks, Calif.

Kapoor does not own shares of Genentech stock and Montgomery does not conduct business with the company.

Biotech firms struggle as they grow

Drug stocks