Genentech profits, sales surge in 2006Earnings driven by Lucentis, Avastin, HerceptinNEW YORK (CNNMoney.com) -- The biotech Genentech reported a surge in earnings for 2006 and beat analyst projections for the fourth quarter. Genentech (down $0.95 to $83.74, Charts) said its earnings per share jumped 74 percent in 2006 to $2.23, excluding charges. With charges, earnings for the year came to $1.97 per share. Genentech's fourth quarter earnings of 61 cents, excluding charges, beat Reuters estimates of 55 cents. But Genentech shares gained more than 1 percent in extended-hours trading, after slipping more than 1 percent during the day. The biotech, based in South San Francisco, Calif., reported that sales totaled $7.6 billion for the year, up 36 percent from 2006. Sales for cancer drugs dominated companywide revenues. "With $5 billion in oncology sales, we are now No. 1 in the U.S. for both sales and service," said Ian Clark, executive vice president for Genentech, in a webcast with analysts. Sales for the company's lead product Rituxan, a treatment for non-Hodgkin's lymphoma and rheumatoid arthritis, climbed 13 percent in 2006 from the previous year, exceeding $2 billion for the first time. Rituxan got a big boost in the fourth quarter, surging 165 percent, to $560 million, from the same quarter the previous year. Sales for the company's second-biggest seller Avastin, the drug for lung and colorectal cancer, rose 54 percent to total $1.7 billion for 2006. For the fourth quarter, Avastin sales rose 36 percent to total $490 million. This is slightly above the $485 million estimate from Mike King, analyst for Rodman & Renshaw. King had recently increased his projection, believing that Avastin would get a lift from strong sales growth as a lung cancer treatment. King rates the company a "buy," with a 12-month price target of $87 a share, compared with its Jan. 10 close of $83.74. Sales for the breast cancer drug Herceptin rose 65 percent in 2006, totaling $1.2 billion and attaining the rank of "blockbuster," the company said. Sales for Lucentis, a treatment for age-related blindness, totaled $380 million during its first year on the market. Following the earnings announcement, King said he expects Lucentis sales to reach $900 million in 2007. Genentech suffered a stock price decline of 12 percent in 2006. But according to an analyst consensus compiled by Thomson Financial, the stock price is expected to rise 19 percent in 2007, with an earnings per share surge of 23 percent for the full year. Genentech is the second-biggest biotech in the world in terms of sales, behind Amgen (down $0.23 to $71.04, Charts). King does not own Genentech shares, and Rodman & Renshaw does not do business with the company. |
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