Earnings, a Food and Drug Administration warning and clinical updates blotted the biotech sector Tuesday, but health indices lay flat. Genentech ( DNA) reported late Monday third-quarter earnings of 73 cents a share, or $778 million, before items, compared to 59 cents a share, or $637 million, in 2006. Analysts surveyed by Thomson financial were looking for 72 cents a share on revenue of $2.93 billion. Genentech reported revenue of $2.91 billion before items (and including $3 million associated with the acquisition of Tanox), a 22% increase over operating revenue of $2.38 billion in the third quarter of 2006. Shares were down $2.39, or 3.1%, at $ 75.11 on Tuesday. Forest Laboratories ( FRX) on Tuesday reported earnings that were affected by a $70 million licensing charge (equating to 15 cents a share net of tax) to Microbia for the right to co-develop and co-market constipation treatment linaclotide. The company reported earning 71 cents a share for the second quarter of fiscal 2008. Analysts surveyed by Thomson Financial had expected 74 cents a share. Forest Labs shares fell 4.8% to $38.46. The stock is a component of the Amex Pharmaceutical index, which was down 3.70, or 1.1%, to 347.85. Up on earnings, biotechnology company Enzo Biochem ( ENZ) reported that its fiscal fourth-quarter (ended July 31) loss narrowed due to a rise in sales at its clinical lab segment and new product revenue from its acquisition of Axxora Life Sciences. The company reported a loss of $3.3 million, or 9 cents a share, compared to a loss of $4.5 million, or 14 cents a share, in the year-ago quarter. Analysts surveyed by Thomson Financial expected a loss of 12 cents a share on revenue of $16.3 million. Enzo said its revenue rose 81% to $17.9 million from $9.9 million in 2006. Shares climbed 13.4% to $13.14.
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).