NEW YORK (CNN/Money) - Genentech could be one of the most promising biotechs on the market, but is its share price justified?

Analysts have great expectations for biotech firm Genentech (down $1.74 to $57.59, Research). The San Francisco-based drug maker, with one blockbuster on the market and a robust pipeline, will announce first quarter earnings on Monday.

Revenue is expected to surge 41 percent year-to-year, according to analysts interviewed by Thomson Analytics. The company's top selling product, Rituxan, brought in $1.7 billion in sales last year, nearly half the company's $3.7 billion total drug sales.

But Rituxan, which is used in the U.S. to treat patients with non-Hodgkin's lymphoma, is not where Genentech's growth opportunities lie.

A Billion Dollar Opportunity?

Avastin, a colorectal cancer treatment drug that brought in $554 million in sales last year, is seen by some analysts as having huge market potential.

"Rituxan has begun to plateau," said Eric Schmidt, analyst for SG Cowen & Co., who expects 10 percent annual sales growth for Rituxan over the next five years. "For this company the big driver is their cancer drug, Avastin. That drug has a $1 billion opportunity in colorectal cancer."

Genentech's partnership with Roche Holding (down $0.57 to $108.84, Research) and Biogen Idec (down $0.51 to $36.02, Research) to market Rituxan in Europe for the treatment of rheumatoid arthritis is not likely to have a large impact on Genentech's revenue, said analysts.

Avastin is currently on the market for use with chemotherapy in the treatment of metastatic colorectal cancer. But the drug is also in late-stage testing for treatment of six other forms of cancer, including a form of lung cancer and an additional form of colorectal cancer. Schmidt said the company could stand to make an additional $1 billion in annual revenues if Avastin is approved for the treatment of lung cancer, and that's only one part of an unusually robust pipeline.

"They have over 30 programs in the clinic, which for a company this size certainly is one of the better pipelines we've come across," said Schmidt, whose firm does not issue recommendations.

And at least in the case of Avastin, competition is limited, according to Sena Lund, analyst for Cathay Financial.

"In the near term, I don't see anything threatening Avastin," said Lund, who gave the company's stock a "hold" recommendation.

Overpriced stock?

With its stock valued at $57.69 in midday trading Friday, Genentech is not a bargain, analysts said. Looking ahead, the projected PE is 53 for 2005, with analysts projecting annual earnings per share of $1.09, according to Thomson Baseline. Genentech earnings are expected to grow 28 percent this year, compared to 19 percent for the biotechnology sector, according to Thomson.

"The only problem they have is the high valuation," said Schmidt. "This company has had a lot successes, they have a great pipeline, and I think they'll have many successes over the next few years. But it's an expensive stock."

Edward Nash, analyst for Legg Mason Wood Walker, Inc., described Genentech as "one of the more expensive biotech companies out there."

Nash said that Genentech is worth holding as one of the more secure companies in a volatile sector, but it isn't worth buying until data shows the company can justify its high earnings multiple.

"It's basically a safe haven," said Nash. "It's one of the safe bets in the large cap biotech arena."