Genentech's earnings leap 79% but Avastin weakness causes shares to drop 3%

The USA's second-largest biotechnology firm, Genentech, posted a massive leap in second-quarter 2006 net income but, because of some weakness in the adoption of Avastin (bevacizumab) in lung cancer, along with a warning about the timing of the drug's approval in breast cancer, the company's shares fell 3% to $81.62 in after-hours trading July 11, the day the figures were released.

Genentech, which is majority-owned by Swiss pharmaceutical major Roche, reported non-generally accepted accounting principles net income up 83% at $602.0 million and on a GAAP basis this was up 79% at $531.0 million, with earnings per share rocketing 81% to $0.49. Operating revenues rose 44% to $1.20 billion with total product sales increasing 42% to $1.18 billion for the reported quarter. Royalty income was 58% higher year-on-year at $316.0 million, the company noted.

Commenting on the results, the South San Francisco-based firm's chief executive, Arthur Levinson, said that "Genentech has reached its half-year mark with another set of excellent results. Our year-to-date operating revenues exceeded $4.0 billion, and our EPS in the first six months of 2006 surpassed our full-year EPS in 2004, just two years ago."