Genentech’s Net Income Grows 21%
Biotechnology company Genentech Inc. on Thursday posted a 21% rise in first-quarter earnings per share before charges, matching Wall Street estimates, amid increased sales of its cancer drugs.
South San Francisco-based Genentech also acknowledged that the launch of its allergy and asthma treatment Xolair could be pushed back to early next year from an original expected launch late this year. It blamed delays in the regulatory approval process.
The biotechnology bellwether said first-quarter net income rose to $91.2 million, or 17 cents a diluted share, compared with $76 million, or 14 cents, in the year-ago quarter. Analysts had expected earnings in the range of 14 cents to 18 cents, with a consensus of 17 cents, according to First Call/Thomson Financial.
Taking into account charges resulting from the 1999 redemption of a portion of the company’s shares and accounting changes, the company recorded fourth-quarter net income of $26.8 million, or 8 cents a share, compared with a net loss of $82.4 million, or 16 cents, in the first quarter of 2000.
Revenue for the quarter rose to $540.1 million from $387.9 million, driven by sales of the company’s breast cancer drug Herceptin and Rituxan for non-Hodgkin’s lymphoma.
Genentech said revenue for the quarter also included $10 million related to changes in fair values of derivative instruments under new accounting rules.
Genentech is awaiting a decision from the Food and Drug Administration on a marketing application for Xolair.
The company had planned to launch the drug in the latter part of this year, but the FDA’s cancellation of an April meeting of the committee that reviews pulmonary and allergy drugs has clouded that schedule.
On Thursday, Genentech said it anticipates FDA approval of Xolair late this year or in early 2002.
Genentech’s shares rose 40 cents on Thursday to close at $45.65 on the New York Stock Exchange, before the earnings announcement was made. In after-hours trading, the shares rose as high as $48.
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Visx Inc., the biggest maker of lasers used to correct vision, said first-quarter profit fell 35% as fees and demand for surgery declined.
Net income fell to $12.6 million, or 21 cents a share, from $19.6 million, or 30 cents, a year ago. Sales fell 19% to $51.6 million from $64 million, the company said.
Santa Clara, Calif.-based Visx cut the fee it charges each time doctors use a laser to $100 from $250 in February 2000, hurting profit. At the same time, demand for the surgery has tapered off in a slowing economy. Still, Visx’s licensing fees rose 23% from the fourth quarter as requests for surgery rebounded more than expected.
Visx said last week its profit would be 2 cents to 3 cents more than the 18 cents analysts had forecast.
Visx shares on Thursday fell 21 cents to close at $20.50 on the NYSE.
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Lagging Stock
Sales of biotech giant Genentech’s top-selling drugs were better than expected in the first quarter. But the stock is still well off its 52-week high of $95.65 reached last September.
Greentech, monthly closes and latest on the NYSE
Thursday: $45.65, up 40 cents
Source: Bloomberg News
