Third-quarter earnings are kicking off on the heels of September's impressive biotech stock rally -- a traditional autumnal move higher. But as JPMorgan analyst Geoffrey Meacham notes in a report Thursday, the S&P 500 and the Dow Jones Industrial Average rallied as well. (The Amex biotechnology index rose 11% since mid-August, compared with 10% and 9% rises for the Dow and S&P respectively). Other sectors are now preparing for dismal third-quarter earnings -- but in the biotech sector, predictions are for a "mixed" quarter. Some soft prescription data and high expectations may be followed by upside for these stocks into the conference season, according to analysts. Here's a quick look at what's to come in third-quarter earnings for Genentech ( DNA), Gilead Sciences ( GILD), Biogen Idec ( BIIB), Genzyme ( GENZ), Celgene ( CELG) and Amgen ( AMGN) -- which will divulge results in that order throughout the next two weeks.
Genentech (Oct. 15 after market close)
Genentech's stock has been buffeted ahead of its earnings by concerns about prescription trends , data that prompted some analysts to lower expectations. The consensus is 72 cents a share for the third quarter, but RBC Capital and Jefferies are expecting 74 cents a share, although that's still scaled back from RBC's prior estimation of 76 cents. This will be the first full quarter in which the effects, or non-effects, of a dose reduction in Avastin, for use as a lung cancer treatment will be visible. The consensus target for Avastin is $586 million. This could be a non-issue as sales have continued to grow. Also, the drug is up for a panel review for metastatic breast cancer in December ahead of a potential February approval (the FDA's goal for a decision is Feb. 24), and data are expected for Avastin in colorectal cancer in 2008.
Stocks soar as the gross domestic product rises at an annualized rate of 3.5% in the third quarter and continuing jobless claims fall. Gregg Greenberg recaps the action in The Real Story video (above).