Genentech fails to impress
Investors expecting more when the biotech lifts its forecast send its stock down.
NEW YORK (CNNMoney.com) -- Genentech's stock fell after the biotech raised its 2008 earnings guidance, but not enough impress investors.
The California-based company lifted its annual forecast Friday to between $3.35 and $3.45 per share from previous guidance of $3.30 to $3.45 per share. Despite the increase, Genentech's (DNA) stock fell 4% in afternoon trading.
Eric Schmidt, a biotech analyst for Cowen & Co. who attended the biotech's analyst meeting in New York Friday, said the sell-off stemmed from investors who expected the company to raise the high end of its range.
Much of this expectation was based on the Food and Drug Administration's recent nod to Genentech's Avastin drug.
On Feb. 22, the FDA approved Avastin for breast cancer, a surprise move that drove up the stock 13% in the following weeks. In December of 2007, an FDA advisory panel had voted 5-4 against Avastin, saying that the safety risks did not outweigh the benefit
David Ebersman, chief financial officer for Genentech, said the guidance move should not have been a surprise, since the biotech previously said that Avastin approval would be required to push guidance "to the upper end of the range."
Avastin is already one of Genentech's top sellers as a treatment for lung and colorectal cancer, with sales totaling $3 billion in 2007.
Genentech is the world's largest biotech in terms of market capitalization. Amgen (AMGN, Fortune 500), also based in California, is the world's largest biotech in terms of annual sales. 
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