BIOTECHNOLOGY giant Genentech Inc has reported a jump in its first-quarter profit of 12 percent compared to last year, but sales of its top-selling cancer drug disappointed Wall Street analysts.
For the quarter ended March 31, the company earned US$790 million, or 74 cents per share, compared with US$706 million, or 66 cents a share, a year ago.
Excluding special expenses, Genentech said it would have earned US$895 million, or 84 cents a share. On that basis, the results beat the average per-share estimate among Wall Street analysts by two cents, according to research firm Thomson Financial.
Revenue was US$3.06 billion in the quarter, an increase of 8 percent from US$2.84 billion a year ago but missing analysts' expectations by about US$50 million. Sales of Genentech's top two cancer drugs, Avastin and Rituxan, both rose 13 percent.
But Avastin's numbers disappointed analysts, who were expecting an even greater rise after its surprise February approval by the Food and Drug Administration to treat metastatic breast cancer.
Avastin's sales rose to US$600 million, compared to US$533 million in sales for the first quarter of 2007. The drug brought in a total of US$2.3 billion last year.
"They beat on the bottom line but Avastin was a miss," said Jason Kantor, a biotech equities analyst with RBC Capital Markets, who predicted US$622 million in Avastin sales. "This is a stock which trades on Avastin sentiment."
The FDA's approval of Avastin went against the recommendation of the agency's own advisory panel. The drug is already approved to treat colon and lung cancer.
Genentech's share price has risen about 17 percent since the beginning of 2008, spiking nearly 10 percent on the news of the Avastin approval and nearly erasing the stock's losses during 2007.
Sales of Rituxan, which treats non-Hodgkin's lymphoma and rheumatoid arthritis, also rose 13 percent to US$605 million in the first quarter. Breast cancer fighter Herceptin posted first-quarter 2008 sales of US$339 million, up 9 percent from a year ago.