Genentech, Idec Sales of Cancer Drug Fall Short of Expectations
Shares of Genentech Inc. and Idec Pharmaceuticals Corp. fell Wednesday after the biotechnology companies reported lower-than-expected sales of the cancer drug Rituxan, which they jointly market.
However, South San Francisco-based Genentech, the world’s oldest biotechnology company, said second-quarter profit rose 28%.
Profit from operations rose to $101.5 million, or 19 cents a share, from $79.6 million, or 15 cents a share, a year earlier. Revenue rose 24% to $515.9 million from $415.8 million.
The results matched the 19-cent average profit estimate of analysts surveyed by First Call/Thomson Financial. Genentech is majority-controlled by Roche Holding.
Worldwide sales of Rituxan, a treatment for non-Hodgkin’s lymphoma that the company sells in the U.S. with Idec, increased 83% to $187.7 million from $102.8 million. Some analysts had expected Rituxan sales to double. Herceptin, a breast cancer drug, had sales of $78.8 million, an 18% increase from $66.7 million, below most analysts’ estimates.
“We had hoped for better performance for Rituxan,” said Eric Shen, an analyst with Robertson Stephens. “Herceptin was slightly disappointing.”
The disappointment affected shares of both companies.
Genentech traded as low as $39 in after-hours trading, after closing at $42.75 on the New York Stock Exchange. The company announced results after the close of U.S. markets.
Idec shares dropped as low as $46.56 in after-hours trading after closing at $61.48 on Nasdaq. The stock more than doubled between early April and early June, and has fallen about 18% since then.
San Diego-based Idec said U.S. sales of Rituxan rose 86% to $180 million in the second quarter, below most analysts’ expectations.
Analysts had expected Idec sales of as much as about $220 million for the non-Hodgkin’s lymphoma medicine, Idec’s only drug on the market, compared with $96.7 million in the year-earlier quarter. Many analysts recently raised their forecasts for the drug, based on strong prescription data in April and May.
Idec also reported preliminary net income of 15 cents a share, matching the average estimate of analysts. Idec plans to release complete results next Thursday.
