Genentech Quarterly Net Income Doubles
Genentech Inc. said Wednesday that earnings more than doubled in the third quarter, driven by higher sales of its cancer drugs.
Revenue grew 21%, led by Rituxan, a treatment for non-Hodgkin’s lymphoma, that is on track this year to produce $1 billion in sales. Only one other cancer drug, Bristol Myers-Squibb’s Taxol, has done so.
Genentech, based in South San Francisco, said net income rose to $89.3 million, or 17 cents a share, from $42.7 million, or 8 cents a share, a year ago. Revenue rose to $675.2 million from $556.2 million.
Rituxan, which Genentech co-markets with San Diego-based Idec Pharmaceuticals, and Herceptin, Genentech’s breast cancer drug, accounted for more than half the company’s third-quarter revenue.
Sales of Rituxan rose 38% to $293.9 million, up from $212.8 million, at the high end of analysts’ estimates for the quarter. Herceptin sales rose to $96.7 million from $83.8 million, in the middle of the range analysts expected.
Sales of Genentech’s third-best-selling drug, human growth hormone, rose 14% in the quarter to $77.4 million from $67.7 a year ago.
Genentech took a $12.5-million charge related to the $500-million verdict against it in the breach-of-contract suit with City of Hope National Medical Center in Duarte. The firm said the charge reflected litigation related to obtaining a surety bond and that it expected to take such a charge each quarter while it appeals the judgment.
In after-hours trading, Genentech’s shares rose 3.5% to $33 after closing at $31.88, off 67 cents on the New York Stock Exchange. The company announced the results after the market closed.
Idec, meanwhile, said sales rose 31% in the quarter, also driven by Rituxan. The company reported third-quarter sales of $269.5 million, up from $205 million a year ago. Sales of Zevalin, a radioactive cancer drug for patients who don’t improve on Rituxan, were $5 million in the quarter.
Idec, which plans to release its full results Oct. 16, estimated third-quarter earnings of 22 cents a share, a penny above Wall Street estimates. Idec’s shares rose 7% in after-hours trading to $38.97, after closing at $36.42 on Nasdaq, down $1.18.
