Genentech’s net income rises 6.7%

Genentech Inc.’s third-quarter profit rose 6.7% on rising sales of key cancer drugs, the biotechnology company said, matching Wall Street’s profit forecast.

The results mark another quarter in which the biotech giant either met or barely topped expectations as competition cuts into sales and its cancer treatments reach a saturation point in the market.

The company earned $731 million, or 68 cents a share, up from $685 million, or 64 cents, a year earlier. Revenue rose 17% to $3.41 billion.

Excluding charges for an employee-retention program and other one-time items, Genentech earned 81 cents a share. Analysts surveyed by Thomson Financial expected profit of 81 cents on revenue of $3.41 billion.

The company cut its adjusted profit for the year to $3.40 to $3.45 a share instead of $3.40 to $3.50, citing the employee-retention program.

That program was installed as a safeguard to a takeover by cancer drug partner Roche Holding, which had its $47.3-billion buyout bid rejected. Whether Roche, which already owns about 55.9% of Genentech, comes back with another offer has been the key focus of analysts and investors. Genentech previously said the offer was too low. It would not discuss the issue during a conference call Tuesday.

Chairman and Chief Executive Arthur D. Levinson said during the conference call that the company was in a positive position to handle the credit crisis that has rocked stock markets, with a cushion of $8.6 billion in cash and investments.

During the quarter, sales of Avastin, which is approved to treat colon, lung and breast cancer, rose 18% to $704 million. The company’s sales of Rituxan, which is approved to treat non-Hodgkin’s lymphoma and rheumatoid arthritis, rose 15% to $655 million. Biogen Idec Inc. is Genentech’s partner on Rituxan.

Shares of Genentech rose $2.60 to $82.20 in after-hours trading. Before the earnings news, the shares closed down $2.06 at $79.12.