Genentech Passes Some Tough Tests
Biotechs are the way to hit home runs. So argues Joseph Battipaglia, chief investment officer at Gruntal, who is high on companies involved in cancer treatment. Some products approved in recent years--such as Genentech's Rituxan, he notes--are highly specific, targeting cancer cells directly. And they are far less toxic than chemotherapy or radiation.
This is one reason he has accumulated shares of Genentech (DNA ), a major biotech company whose other products include Herceptin, used for the treatment of metastatic breast cancer. Although Genentech has been on the rise--from 38 on Sept. 10 to 55 on Nov. 14--Battipaglia sees it spiking up again soon: Genentech will present a paper at the Dec. 7-10 conference of the American Society of Hematology. The buzz is that it will detail favorable two-year test data on its top-seller, Rituxan, a monoclonal antibody for non-Hodgkin's lymphoma. Rituxan was the first such treatment licensed for cancer. Sales rose from $279 million in 1999 to $444 million last year. Battipaglia, who sees the stock hitting 64 in 18 months, expects the positive data to stir up fresh interest in Genentech.
So far, Rituxan is approved for use only in late-stage patients. "Rituxan's improved efficacy in the post-approval tests should help justify Genentech's request for expanded use," says John McCamant, editor of the Medical Technology Stock Letter. "This is a big deal for Rituxan."
By Gene G. Marcial [BW] |
