Genentech profit rises 4.7%
Genentech Inc., the biggest U.S. maker of cancer drugs, raised its 2008 forecast Monday and said second-quarter profit increased 4.7% on higher sales of its Avastin treatment for colon, lung and breast tumors.
The South San Francisco biotechnology company gained in after-hours trading after it reported that net income rose to $782 million, or 73 cents a share. Earnings excluding certain items missed analyst estimates by 4 cents a share as Genentech spent more on research, marketing and stock-based compensation.
Revenue in the quarter rose 8% to $3.2 billion, led by U.S. sales of Avastin, which gained from a new use in breast cancer. The medicine, first approved in 2004 for colon cancer and for lung malignancies two years later, is being studied against 20 tumor types.
“Most of the focus this quarter was on sales growth for Avastin,” said Eric Schmidt at Cowen & Co. in New York. “The bottom line came in a little weak but no one cares because the most important thing, despite missing estimates by a few cents, is that they raised guidance for the year.”
Shares of Genentech, majority-owned by Switzerland’s Roche Holding, rose 92 cents, or 1.2%, to $76.31 in extended trading after closing down $2.36, or 3%, at $75.39.
Avastin sales in the U.S. rose 15% to $650 million, about $7 million more than analysts had projected.
Genentech said 2008 profit, excluding certain costs, would be $3.40 to $3.50 a share, up from a prior forecast of $3.35 to $3.45. Second-quarter earnings excluding some items were 82 cents a share, falling short of the average estimate of 19 analysts surveyed by Bloomberg.
Genentech is the world’s second-biggest biotechnology company in sales after Amgen Inc. in Thousand Oaks.