Street Yawns at Genentech Quarterlies

Despite beating analysts' revenue and profit forecast, biotech's share price drops
By Jim O'Neill,  Newser Staff
Posted Jan 15, 2008 11:09 AM CST
Street Yawns at Genentech Quarterlies
Genentech headquarters is shown in South San Francisco, Calif., Tuesday, April 10, 2007. Genentech is expected to report earnings Wednesday, April 11, 2007, after markets close.(AP Photo/Paul Sakuma)   (Associated Press)

Drug maker Genentech – struggling with near-flat sales of its two premier drugs, Avastin and Rituxan – managed to outperform analyst’s fourth quarter expectations – barely, reports the Associated Press. The one-time biotech uber star, which recorded phenomenal growth in each of the two previous years, showed only a 6.4% increase in profits on sales that rose 9% in the quarter.

Quarterly profits were $632 million, or 59 cents per share, compared to $594 million and 55 cents per share in 2006. Revenue rose to $2.97 billion from $2.71 billion. In 2006’s fourth quarter, Genentech’s profits surged 75%; 2005-2006 revenue growth was 69%. Genentech has four clinical trials upcoming, and Wall Street is banking on a success to reignite Genentech’s engines. (More Genentech stories.)

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