Genentech profits up 75 per cent

Genentech on Wednesday said its fourth-quarter profits rose 75 per cent, driven by the successful introduction of its new eye-loss treatment and strong demand for its cancer drug.

The San Francisco-based company, which is the second-largest biotechnology company by sales after Amgen, said its net income increased to $594m, or 56 cents a share, from $339.2m, or 31 cents, a year earlier. Revenue rose 43 per cent to $2.71bn, beating analysts’ average estimate of $2.5bn.

Geoffrey Meacham, JPMorgan’s US biotechnology analyst, said in a brief note that, “as expected”, Genentech posted “strong top and bottomline performance” on the strength of two key drugs, Avastin and Lucentis.

Lucentis, which is co-marketed internationally with Novartis of Switzerland, is Genentech’s newest drug, approved and launched last June.

US sales of Lucentis, a treatment for leaking blood vessels in the eye that can cause blindness, were $217m in the quarter, beating analysts’ consensus estimates of $159m.

Mr Meacham raised his outlook for 2006, 2007 and 2008 sales of the drug.

US sales of Avastin, the colon cancer drug, rose 36 per cent to $490m. Avastin, the company’s fastest-growing product since its approval in 2004, won US approval last October as a lung cancer treatment. The solid growth of Genentech’s other cancer drugs – Rituxan and Herceptin – also helped boost performance.

In a research note, Steven Harr, an analyst at Morgan Stanley, said the results were strong across the board. “Most importantly, demand for Avastin, which is the major source of investor dispersion, grew...We expect the Street will like these numbers.”

Arthur Levinson, chairman and chief executive officer, said he was pleased with the company’s pipeline and that he planned to “continue to focus on R&D projects”.

Shares of Genentech, majority-owned by Swiss drug-maker Roche Holding, dropped 97 cents to $83.72 but were up in after-hours trading. The company reported results after markets closed.

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