Genentech second-quarter sales up 42%, enrollment begins in five separate trials

By Lisa Kerner

Charlotte, N.C., July 11 - Genentech, Inc. said product sales for the second quarter 2006 were up 42% to $1.810 billion, compared to $1.274 billion for the same period in 2005.

Operating revenues were also up to $2.199 billion, or 44% over the $1.527 million reported in the second quarter of 2005.

Non-GAAP net income rose 83% to $602 million from $329 million the year before, while GAAP net income of $531 million was up 79% from $296 million.

Genentech's non-GAAP earnings per share for the period increased 87% to $0.56 per share from $0.30 per share in the second quarter of 2005. The company's GAAP earnings per share of $0.49 for the second quarter of 2006 were up 81% from $0.27 in 2005.

"Our year-to-date operating revenues exceeded $4 billion, and our earnings per share in the first six months of 2006 surpassed our full-year earnings per share in 2004, just two years ago," chairman and chief executive officer Arthur D. Levinson said in a company news release.

Product sales rose 41% to $1.176 million, royalties increased 58% to $316 million and contract revenues were up 38% to $73 million for the second quarter.

Genentech's unrestricted cash and investments portfolio totaled approximately $4 billion as of June 30.

Avastin given priority review

The company also announced that its supplemental Biologics License Application (sBLA) for Avastin in combination with taxane chemotherapy for patients with first-line metastatic breast cancer was granted priority review by the Food and Drug Administration.

The FDA has requested additional information which may extend the review and approval beyond the Nov. 22 action date.

Enrolls five trials

Meanwhile, in the second quarter Genentech started enrollment in a phase 1 study of Trastuzumab-DM1 in HER2-positive metastatic breast cancer; a phase 1b study of Apo2L/TRAIL in oncology; a phase 1b study of BR3 in rheumatoid arthritis; a phase 2 study of Rituxan in rheumatoid arthritis in combination with methotrexate and Enbrel; and a phase 2 topical VEGF diabetic wound healing study.

South San Francisco, Calif.-based Genentech develops products for the treatment of cancer, allergy, asthma, heart attack and other diseases.

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