Genentech Earnings Up 48%

Biotechnology company Genentech Inc.’s 2-year-old hot streak continued Tuesday with a reported 48% jump in first-quarter income, fueled by strong sales of its cancer medicines.

For the quarter ended March 31, the South San Francisco-based company earned $421 million, or 39 cents a share, compared with $284 million, or 27 cents, a year earlier.

Excluding special expenses, Genentech said it would have earned $491 million, or 46 cents a share. On that basis, the results exceeded by 5 cents the per-share estimate of Wall Street analysts, according to research firm Thomson Financial.

Revenue was $1.99 billion in the quarter, up 36% from $1.46 billion a year earlier.

Genentech also said that it expected sales in 2006 to be stronger than initially forecast and that it expected earnings per share to grow 45% to 55% this year.

Ahead of the report, Genentech shares rose $1.07 to close at $81.70. The stock lost 2%, or $1.83, in after-hours trading.

The company’s share price has more than tripled over the last two years, boosted by strong sales and a string of positive scientific results of its cancer-fighting drug Avastin.

The drug was approved in February 2004 to treat colon cancer patients and accounted for $398 million in sales in the first quarter, a 96% increase over the same quarter in 2005.

The company also said Tuesday that it had applied to the Food and Drug Administration to approve Avastin to treat some lung cancer patients.

Avastin is designed to choke the blood supply that feeds tumors and is the first drug of its kind to be approved by the FDA. When used with chemotherapy, it extends the life of the sickest patients by an average of about five months.

Analysts expect the drug, which costs each patient about $4,400 a month, to surpass $2 billion in annual sales in the next few years.

The company also is investigating Avastin’s possibilities to treat other forms of cancer, including breast, prostate and kidney.