Genentech Got It Done

Along with the November appointment for Avastin, Genentech will go before the FDA on Aug. 17 with data on Herceptin for breast cancer (it's already approved for a specific type of breast cancer) and Oct. 11 with Avastin plus platinum chemotherapy for the treatment of nonsmall-cell lung cancer. Genentech will also soon start a couple of Phase III trials for rheumatoid arthritis and neuromyelitis optica, an inflammatory disease that strikes the optic nerve and spinal cord.

Shares of Genentech, at more than 40 times 2006 estimated earnings, aren't cheap. However, on a forward price-earnings-to-growth basis, the stock is trading at roughly one times growth.

Nevertheless, anyone with a long-term time horizon may want to wait for the speculators and weak hands to sell and let the shares come in a bit. At that point, investors will have the opportunity to pick up a leading biotech name that has proven it can perform.