Analyst lowers Genentech expectations

Genentech's sales, earnings projections lowered by FBR analyst as top products 'mature;' biotech to report earnings on Oct. 15.

By Aaron Smith, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Genentech's growth stalled in the third quarter, according to an analyst who lowered his expectations Monday for the biotech's sales and earnings.

Jim Reddoch, an analyst at Friedman, Billings, Ramsey, said that quarterly sales declined for Genentech's major products because they "have been on the market awhile now."

"Particularly surprising to investors will be likely declining quarter-over-quarter U.S. sales among the big 4 [Avastin, Herceptin, Rituxan, and Lucentis]," Reddoch wrote.

This prompted Reddoch to lower earnings estimates to 71 cents per share from 75 cents for the quarter, and to $2.90 per share from $2.97 for 2007. These are lower than Thomson Financial's analyst consensus figures, which projects EPS of 72 cents for the third quarter and $2.95 for 2007.

Reddoch lowered third-quarter U.S. sales estimates to $310 million from $341 million for the breast cancer drug Herceptin; to $554 million from $589 million for its top-selling drug Rituxan, a treatment for Non-Hodgkin's lymphoma and rheumatoid arthritis; and to $197 million from $217 million for Lucentis, a treatment for age-related vision loss.

Reddoch also lowered U.S. sales expectations for Avastin to $580 million from $595 million for the third quarter. But he said that Avastin, unlike the other drugs, would at least achieve the expectations of Wall Street.

Genentech spokeswoman Kelli Wilder declined to talk about the FBR projections. "We don't comment on stock movement, or analyst expectations and projections," said Wilder.

Genentech, Inc., (Charts) based in San Francisco, Calif., will report third quarter results on Oct. 15. Investors have backed away from the once-charmed biotech this year, whose stock declined 3.5 percent year-to-date.

Genentech is the world's second-largest biotech in terms of annual sales, behind Amgen Inc (Charts, Fortune 500).

Reddoch does not own Genentech stock, though FBR does seek to perform investment banking services for Genentech and other companies. Top 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.