RBC puts Genentech at outperform

Genentech, Inc. was given an outperform, average risk, rating by RBC Capital Markets analyst Michael Yee on news that the company will purchase Tanox for $919 million. This positive move essentially trades cash for cash flow, increasing Genentech's earnings quality, according to the analyst. With $4 billion in cash at the end of the third quarter and $1.3 billion in operating cash flow in the quarter, Genentech has "significant potential" to become a consolidator in the industry, noted Yee. Shares of the South San Francisco, Calif.-based biotherapeutic company were up 24 cents, or 0.307%, at $81.59. (NYSE: DNA)

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