Street Yawns at Genentech Quarterlies

Despite beating analysts' revenue and profit forecast, biotech's share price drops
By Jim O'Neill,  Newser User
Posted Jan 15, 2008 11:09 AM CST
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)
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(Newser) – 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. (Read more Genentech stories.)