Merrill analyst says third-quarter biotech earnings could be mixed

By Lisa Kerner

Charlotte, N.C., Oct. 3 - Merrill Lynch analyst Eric Ende is looking for mixed third-quarter earnings ahead of financial announcements from biotechnology companies.

Uncertainty surrounds Genentech, Inc. due to inconsistent data from NDC and IMS. Avastin sales are estimated at $450 million to $460 million by the analyst, while U.S. sales of Herceptin are tracking slightly below consensus and Rituxan is tracking slightly ahead.

Gilead Sciences, Inc.'s accelerated HIV franchise sales due to the Atripla launch may be overly optimistic. There appears to be a 1:1 switch from Truveda to Atripla with no sales acceleration. Look for higher expense guidance following the Corus acquisition, exacerbated by the Myogen acquisition in early 2007, Ende said in a report.

Ende believes Amgen Inc. total sales will come in less than expected, especially for Neulasta, while Aranesp, Neupogen and Enbrel are tracking mostly in line with NDC and IMS data. Neulasta data look weak, and Ende lowered estimates to $575 million from $595 million. Aranesp is tracking ahead of projections, as Neupogen, Enbrel and Sensipar track in line to slightly below consensus.

Merrill raised its third-quarter Thalomid sales estimate to $106 million from $95 million based on strong NDC data while lowering its Revlimid estimate to $95 million from $101 million. Either way, it could surprise, according to Ende.

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