Genentech has started the reporting season by posting a 41% jump in second-quarter net income to $747m and revenues of just over $3bn (+37%) on the back of strong growth from its cancer agent Avastin (bevacizumab).
US product sales climbed 25% to $2.15bn in the quarter, with Avastin shooting up 33% to $564m, helped by FDA approval at the end of last year to extend use of the treatment to patients with non-small-cell lung cancer. The results were particularly impressive given that fears had been voiced over a study showing that both the standard dose and a lower dose of the drug, in combination with chemotherapy, improved progression-free survival in patients with NSCLC.
This had led analysts to conclude that the success of the low-dose arm of the study would see doctors using the lower and therefore cheaper dose in most lung cancer patients. However, any impact on sales appears to have been offset by increased Avastin use overall.
As for Genentech’s other key products, US sales of the breast cancer drug Herceptin� (trastuzumab) edged up just 3% to $329m, while Tarceva� (erlotinib) for lung and pancreatic cancers was down 1% to $102m. The arthritis and non-Hodgkin’s lymphoma drug Rituxan� (rituximab) was the firm’s top earner again, up 11% to $582m, while Xolair� (omalizumab) for severe asthma increased 14% to $120m. Lucentis� (ranibuzumab) for wet age-related macular degeneration brought in $209m, down from $211m in the first quarter.
The results beat analysts’ forecasts and they were impressed considering that Genentech’s R&D expenses increased 55% in the quarter to $603m. Montgomery & Co analyst Shiv Kapoor described the results as “phenomenal”, saying: “They had revenue of $3.3bn in 2003 and they just broke $3bn in one quarter.”
The results came just after Tercica announced an agreement with the US biotechnology major to develop two products containing Genentech’s recombinant human growth hormone Nutropin AQ (somatropin) and Tercica’s recombinant insulin-like growth factor-1 Increlex (mecasermin).
Under the terms of the deal, Tercica could receive up to $53m in equity and opt-in payments, R&D cost reimbursement and milestones. In connection with the transaction, Genentech will purchase almost 709,000 shares of its partner’s common stock for $4m.