Thanks, JF - it's been bugging me that I couldn't recall which drug it was.
Here's an old TSC discussion of the incident, which was indeed Q2 of '01:
Such carnage is the penalty for missing revenue estimates these days, except that analyst estimates for Rituxan were wrong to begin with. IMS Health (RX:NYSE - news - commentary), a market research firm that tracks sales of prescription drugs, issued a bum Rituxan sales report in April, according to Genentech executives. It was that overly bullish -- but flawed -- report that got analysts running to their chalkboards to increase Rituxan estimates for the quarter, in some cases by as much as 30%.
Rituxan, used to treat non-Hodgkin's lymphoma, is the company's biggest profit generator and the primary engine driving future growth. By 2003, most analysts expect the drug to surpass $1 billion in annual sales, pushing it solidly into the "blockbuster" category.
"Historically, IMS underreported Rituxan revenue; now it looks like it's being overstated, which shows just how unreliable IMS data can be," says Elise Wang, biotech analyst for Salomon Smith Barney.
Wang's original Rituxan estimate for the second quarter was for $173 million in sales, but based on the boffo IMS reports for April and May, she raised that target to $227 million.
Wednesday, Genentech said second-quarter Rituxan sales rose 83% year over year to $187.7 million. "Genentech surpassed my original estimate," says Wang.
Full story at:
thestreet.com
Peter |
