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Published on 16 January 2008

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Genentech’s profit growth slows

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Biotechnology firm Genentech has only just met Wall Street expectations as the firm renowned for its phenomenal growth posted a 6% rise in fourth-quarter profits.

Last year, the company revealed a 75% increase over the same period, and investors have become accustomed to quarterly growth in the high double digits.

The company earned $632m compared with a profit of $594m during the same period a year earlier, while revenue rose to $2.97bn from $2.71bn.

Analysts have been concerned that the market for the San Francisco-based company’s top-selling cancer drug Avastin was becoming saturated.

And latest figures show that sales growth for the drug has slowed, with sales hitting $603m during the fourth quarter, which is below the $616m which had been predicted by Wall Street.

Prospects for greater growth were hit last month when a Food and Drug Administration panel decided not to recommend the drug for expanded use in breast cancer patients.

Rituxan (rituximab), a treatment for rheumatoid arthritis and non-Hodgkin’s lymphoma, is Genentech’s second biggest source of revenue. Sales of the drug brought in $596m last quarter, which is up 6% from the same period a year ago.

Meanwhile, the firm’s breast cancer drug Herceptin (trastuzumab) brought in $327m for the quarter, which is a 2% increase.

Copyright © PA Business 2008

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