Genentech Inc. on Friday raised the lower end of its 2008 forecast on increasing demand for the cancer drug Avastin.
Shares of the biotechnology company fell $2.60, or just over 3%, to $78.83 “because they didn’t raise the high end” of the forecast range, said Michael King, an analyst with Rodman & Renshaw Inc. in New York.
Genentech expects to earn $3.35 to $3.45 a share in 2008, excluding some expenses, the South San Francisco-based company said. That’s up from its previous forecast of $3.30 to $3.45, excluding certain expenses such as employee stock options.
The company’s stock has jumped 18% since the beginning of the year, driven by U.S. approval last month of Avastin for women with breast cancer. Avastin, also used to treat colon and lung cancer, generated $2.3 billion in sales in 2007, a 32% gain over the previous year. The drug is the first of its kind to work by cutting off blood flow to tumors.
“Genentech scored a major victory with the accelerated approval of Avastin in front-line metastatic breast cancer,” King said. “The benefit of this approval has been the dramatically improved growth prospects for the company for 2008.”
Avastin is being studied in more than 300 trials, Genentech has said.
Before Friday, the company was expected to produce earnings of $3.41 a share this year, according to analysts surveyed by Bloomberg.
Genentech plans to ask the Food and Drug Administration for an additional approval of Avastin later this year for a type of brain cancer known as relapsed glioblastoma. That cancer has resisted treatments for 25 years, according to researchers.