Genentech increases low end of 2008 EPS forecast; reveals six NMEs in Ph II testing

At its annual investor conference, US biotechnology major Genentech upped the lower end of its full-year 2008 earnings per share forecast from its previous estimate of $3.30 to $3.45 to the new outlook of $3.35 to $3.45. However, investors were not impressed and, on the day of the announcement, March 14, shares in the firm fell 1.6% to $80.10 in early trading and were down 3.2% at close.

Commenting on the lackluster response to the outlook increase, Robert W Baird analyst Christopher Raymond said: "I think people were looking for something a bit more aggressive." The mid-point of the new range is $3.40 per share and analysts on average are hoping for earnings of $3.43 per share. The firm, which is majority-owned by Swiss drug major Roche, saw fourth-quarter 2007 earnings of $737.0 million, up 12% year-on-year, and a 9% rise in revenues to $2.97 billion. Despite the fact that both grew more than Wall Street had expected, the firm's share price at the time slipped as investors were discouraged by lower-than-expected sales of key drugs (Marketletter January 21).

Six NMEs in Ph II testing; 13 NMEs in Ph I