Genentech Beats Profit Expectations
Updated from 4:46 p.m. EDT
Biotech bellwether
Genentech
(DNA)
kicked off first-quarter earnings for the sector after the market close Thursday, delivering a per-share earnings beat of 2 cents but missing on sales of expected lead product, cancer drug Avastin.
Shares, which closed Thursday's regular session in the green at $78, dipped 21 cents, or 0.3%, to $77.79, in recent after-hours trading.
The South San Francisco-based company earned $895 million, or 84 cents a share on an adjusted basis in the quarter, in comparison to $792 million, or 74 cents a share on the same basis, the year prior. The company reported revenue of $3.06 billion, an 8% increase from the $2.8 billion it generated a year earlier.
Wall Street was looking for earnings of 82 cents a share on $3.1 billion in revenue.
Genentech had arguably the biggest biotech milestone of the first quarter, winning U.S. regulatory approval for Avastin as a breast cancer treatment in February, despite an agency panel's vote for a negative recommendation last December. Sales of cancer drug Avastin totaled $600 million, missing Wall Street's estimates, which ranged from $614 million to $621 million.
Merrill Lynch analyst Eric Ende said in a pre-earnings note to investors that safety concerns before the Food and Drug Administration approval may have hurt sales early in the quarter -- although he expects that the trend reversed with the FDA's ultimate decision.
Sales of Rituxan increased 13% year over year to $605 million, just beating the consensus target of $603 million, and Herceptin sales increased 9% to $339 million, surpassing expectations for $329 million. Lucentis sales came in at $198 million, short of the $202 million expectation.
Looking ahead, Genentech maintained prior full-year earnings guidance of $3.35 to $3.45 a share. Analysts surveyed by Thomson Financial are expecting earnings of $3.43 a share on revenue of $13.05 billion for the year.