Merrill downgrades Genentech to neutral

Genentech Inc. was downgraded by Merrill Lynch analyst Eric Ende to a neutral rating from a buy rating. Sales and earnings-per-share estimates were lowered to reflect lower-than-expected fourth-quarter Avastin sales. Avastin sales of $359 million were modestly below Merrill's estimate of $368 million and consensus of $364 million, but the sales need to beat estimates because it's the company's key growth driver. The company's valuation is well-above other companies with similar market caps, Merrill said. Shares of the South San Francisco, Calif., biotechnology company were down $4.12, or 4.41%, at $89.22 on volume of 13,443,400 shares versus the three-month running average of 3,339,770 shares. (NYSE: DNA)

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