The biotech sector rose 15% in the third quarter, trouncing the overall market, and investors want to be rewarded for that kind of confidence.

Wall Street too has high expectations. Just as Genentech ( DNA) reported strong results Monday, big quarterly numbers are anticipated from Gilead ( GILD) and Genzyme ( GENZ).

Of course, those won't be the only stocks drawing ample scrutiny, not while the likes of Amgen ( AMGN), Celgene ( CELG) and Biogen Idec ( BIIB) remain on the calendar.

Amgen in particular always attracts outsized interest. After all, it is the world's biggest biotech by market cap.

Analysts generally expect strong third-quarter results on Oct. 19, with consensus profit estimates at 82 cents a share on sales of $3.25 billion. A year ago, the company earned 64 cents and had sales of $2.7 billion.

Where it gets tricky is trying to pin down whether sales of individual products like Neupogen and Enbrel will impress or disappoint shareholders.

"We believe that Amgen's U.S. product revenues will be approximately 2% below consensus, in line with our current estimate," Geoffrey Porges of Bernstein Research wrote in a recent research note.

At the same time, he says Epogen, Neupogen and Neulasta sales could trail his previous expectations by 2% to 5%, based on models created using data from IMS Health, which tracks medical industry numbers. However, Amgen remains on his list of preferred picks in the biotech group, thanks to the promise of its pipeline.

To Elise Wang, a biotech analyst at Smith Barney, Amgen remains relatively inexpensive. Wang's Enbrel sales estimate is $645 million for the quarter, compared with the consensus estimate of $665 million.

On Oct. 4, she reduced her Neupogen sales prediction to $310 million from $317 million, compared with a consensus of $308 million. At the same time, she cut her Neulasta projection to $601 million, below the consensus forecast.

Still, Wang believes "market demand remains strong for these products with our revised total product sales demonstrating 23% year-over-year growth." Amgen shares were up 32% in the quarter.

Wang isn't sure the biotechs overall can continue their run, saying that "individual stocks may continue to outperform the market going forward, while the overall sector may underperform the general market in the fourth quarter of 2005."

With that in mind, one company she views positively is Biogen Idec, whose shares were up 15% in the quarter. She now sees Rituxan sales in the U.S. coming in at $471 million for the third quarter, $14 million above her previous estimate.

She also expects Biogen Idec to earn 44 cents a share, excluding a $35 million severance charge. Analysts on average are looking for earnings of 43 cents and sales of $620.5 million. A year ago, the company earned 37 cents a share on sales of $543 million. Biogen Idec reports on Oct. 26.

If not for Tysabri being pulled from the market earlier this year, Biogen Idec's sales no doubt would have shown even more year-over-year growth, despite competition the product would have faced from another multiple sclerosis drug, Rebif from Pfizer ( PFE) and Serono ( SRA).

Unlike many of the top names in biotech that focus on diseases like cancer, MS and rheumatoid arthritis, Genzyme, whose shares rose 19% last quarter, makes its money on drugs for rare diseases.

Cerezyme, a Gaucher's disease treatment, is Genzyme's bestselling drug. Phil Nadeau of S.G. Cowen wrote in a recent research report that third-quarter Cerezyme sales should total $238 million, up from $208.4 million last year.

However, Nadeau believes another top seller, Renagel, used in about half of end-stage kidney disease patients, is facing new competition from Amgen's Sensipar and Shire's ( SHPGY) Fosrenol.

Nadeau is looking for Renagel sales of $102 million, compared with $93.3 million a year ago. The company reports Oct. 18, and analysts expect earnings of 58 cents a share and sales of $697 million.

As for Celgene, which saw a 33% run-up in its shares last quarter, the company "understands the importance of underpromising and overdelivering," Stephen Brozak of WBB Securities said in an interview.

Overall, analysts expect quarterly earnings to be unchanged at 12 cents a share, with sales of $130.6 million, compared with $101.5 million a share a year ago. The top line could really take off if the company is cleared to market Revlimid, a treatment for transfusion-dependent anemia in a condition called myelodysplastic syndrome.

A few weeks ago, an FDA committee voted to support Revlimid's approval. However, Celgene recently took a hit when the agency delayed a decision on its approval by three months, to Jan. 7.

Because of the delay, analysts like Jim Reddoch of Friedman Billings Ramsey have revised their Revlimid estimates to show sales starting in the first quarter of 2006 instead of the fourth quarter of 2005. Reddoch estimates Revlimid revenue will total $253 million in 2006.

One of the more interesting biotech stories at the moment involves HIV drugmaker Gilead, whose shares were up 11% in the third quarter. The company's stock has risen since August, when the Centers for Disease Control and Prevention suggested that Gilead's Tamiflu, co-marketed by Roche, could be effective in preventing or treating avian flu.

Perhaps not surprisingly given the amount of coverage bird flu is getting in the mainstream media, Gilead shares are now hovering near their 52-week high of $49.45.

The company reports Oct. 18, and analysts expect earnings of 36 cents a share for the quarter, on sales of $487.6 million.

According to Bernstein's Porges, Gilead's total U.S. revenue could exceed his current estimate by 7% and consensus by 8%. U.S. Truvada revenue, he believes, may reach $140.5 million, compared with his current estimate of $123 million.

For the biotechs overall, Porges says that because of the sector's first-half performance, he expects "estimates for the whole group to increase through the balance of the year."

Sanford Bernstein owns shares of Amgen and makes a market in Gilead. Smith Barney is a division of Citigroup Global Markets, which owns shares of Amgen and Biogen Idec, has provided investment banking services to Amgen, and holds a long position in Biogen Idec.

Baird makes a market Genzyme shares. SG Cowen makes a market in Genzyme, and Phil Nadeau has a long position on its shares. Friedman Billings Ramsey makes a market in Celgene shares. WBB Securities has no investment banking or institutional relationship with Celgene.

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