SAN FRANCISCO -- Genentech Inc. reported a 56 percent surge in third-quarter net income, fueled by strong drug sales of its newest colon cancer drug and its flagship breast cancer fighter.
The results, released yesterday after the stock market closed, beat analysts' expectations.
For the quarter ended Sept. 30, the South San Francisco, Calif., company earned $359.4 million, or 33 cents a share, up from the previous year's third-quarter earnings of $230.9 million, or 21 cents a share.
Excluding special expenses and income related to litigation, Genentech said it would have posted a profit of $383.8 million, or 35 cents a share. On that basis, the results exceeded the per-share estimate among Wall Street analysts by 5 cents, according to research firm Thomson Financial.
Revenue rose 46 percent, to $1.75 billion, from $1.2 billion in the third quarter last year.
The company also boosted its expected earnings for the year from a 35 percent increase to about 50 percent before special charges, compared to 2004.
The new colon cancer drug, Avastin, was approved for sale in February 2004 and accounted for $325.2 million in sales in the third quarter, a 78 percent increase.
Avastin is designed to choke the blood supply that feeds tumors and is the first drug of its kind to be approved by the FDA. When used with chemotherapy, it extends the life of the sickest patients by an average of five months.
Analysts expect the drug, which costs about $4,400 per month, to surpass $1 billion in annual sales in the next few years. The company also is investigating Avastin's possibilities to treat other forms of cancer.
Meanwhile, sales of Genentech's established breast cancer drug Herceptin skyrocketed 70 percent to $215.1 million in the quarter, compared to $126.3 million in the same period a year earlier.
Genentech shares rose 5.4 percent, or $4.40, to $85.90 after the report was released.
The stock hit a 52-week high of $94.99 a share on Sept. 1.