Genentech says revenue nearly hits $2 billion in first quarter, EPS up 44% to $0.39

By Angela McDaniels

Seattle, April 11 - Genentech Inc.'s revenue increased by 36% to $1.986 billion for the first quarter of 2006 from $1.462 billion for the first quarter of 2005, according to a company news release.

"For the first quarter of 2006, we recorded operating revenues of nearly $2 billion, roughly equivalent to our annual revenues for 2001," chairman and chief executive officer Arthur D. Levinson said in the release.

Total product sales increased by 39% to $1.644 billion for the first quarter from $1.186 billion in the first quarter of 2005.

Genentech products that experienced the highest growth in U.S. sales were Herceptin (Trastuzumab) at 123%, Avastin (bevacizumab) at 96% and Tarceva (erlotinib) at 94%. U.S. sales for the drugs reached $290 million, $398 million and $93 million, respectively.

Non-GAAP net income increased 57% to $491 million for the first quarter from $312 million in the first quarter of 2005. GAAP net income increased 48% to $421 million, including employee stock-based compensation expense, from $284 million for the first quarter of 2005.

Non-GAAP earnings per share increased by 59% to $0.46 per share for the first quarter from $0.29 per share in the first quarter of 2005. GAAP earnings per share increased 44% to $0.39 per share, including employee stock-based compensation expense, from $0.27 per share reported for the first quarter of 2005.

The company predicted that non-GAAP earnings per share will grow by 45% to 55% for the full year 2006. This is a higher estimate than previous expectations, and Genentech attributed the change primarily to revised internal forecasts for product sales and royalty revenue.

Unrestricted cash and investments totaled about $4 billion at March 31.

Additionally, the South San Francisco, Calif.-based biotechnology company said it submitted to the Food and Drug Application on Monday a supplementary Biologics License Application for Avastin in combination with platinum-based chemotherapy to treat patients with first-line non-squamous non-small cell lung cancer.

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