DNA beats whisper numbers by a penny:
>>SOUTH SAN FRANCISCO, Calif., Oct. 10 /PRNewswire-FirstCall/ -- Genentech, Inc. (NYSE: DNA - News) today announced financial results for the third quarter of 2005. Key results for the third quarter of 2005 included:
* Non-GAAP earnings per share increase of 46 percent to $0.35 per share
from $0.24 per share in the third quarter of 2004; GAAP earnings per
share increase of 57 percent to $0.33 per share from $0.21 per share in
the third quarter of 2004;
* Total product sales of $1,451.0 million, a 44 percent increase over
product sales of $1,005.5 million in the third quarter of 2004;
* Operating revenues of $1,751.8 million, a 46 percent increase over
operating revenues of $1,202.6 million in the third quarter of 2004;
* Non-GAAP net income increase of 48 percent to $383.8 million from $259.6
million in the third quarter of 2004; GAAP net income increase of 56
percent to $359.4 million from $230.9 million in the third quarter of
2004.
"Genentech's first nine months of 2005 have been exceptional, with a string of five consecutive positive Phase III trial results and record product sales and earnings," said Arthur D. Levinson, Ph.D., Genentech's chairman and chief executive officer. "We are pleased with our continued strong financial results as we enter the last quarter of our 5x5 program."
"For the full year 2005, we are currently expecting year-over-year non- GAAP earnings per share growth of approximately 50 percent," said David Ebersman, senior vice president and chief financial officer.
Note: Genentech's non-GAAP net income and non-GAAP earnings per share exclude recurring charges related to the 1999 Roche redemption of Genentech's stock and litigation-related special items. The differences in non-GAAP and GAAP numbers are reconciled in the tables below and on www.gene.com. All share and per share amounts reflect the May 2004 two-for-one split of Genentech common stock.
Product Sales
"We are very proud of the strong bio-oncology business that we have built; for the first time in Genentech's history, quarterly oncology U.S. product sales topped one billion dollars," said Ian T. Clark, senior vice president, Commercial Operations. "While our policies only allow our sales force to promote our products for on-label usage, we see increasing use of Avastin in other cancer areas outside of the approved indication of first-line metastatic colorectal cancer, and of Herceptin in the adjuvant setting, also an unapproved use."
For the three months ended September 30, 2005:
* Total product sales, comprised of U.S. product sales and product sales
to collaborators (primarily ex-U.S. sales), increased 44 percent to
$1,451.0 million from $1,005.5 million in the third quarter of 2004.
* U.S. product sales increased 44 percent to $1,365.3 million, from U.S.
product sales of $950.0 million in the third quarter of 2004.
* U.S. sales of Avastin® (bevacizumab) increased 78 percent to $325.2
million, from U.S. sales of $183.0 million in the third quarter of 2004.
Sequential quarter-over-quarter Avastin sales increased 32 percent from
second quarter 2005 U.S. sales of $245.7 million.
* U.S. sales of Herceptin® (Trastuzumab) increased 70 percent to $215.1
million, from U.S. sales of $126.3 million in the third quarter of 2004.
Sequential quarter-over-quarter Herceptin sales increased 41 percent
from second quarter 2005 U.S. sales of $152.4 million.
* U.S. sales of Tarceva® (erlotinib) were $73.2 million. Sequential
quarter-over-quarter Tarceva sales increased 4 percent from second
quarter 2005 U.S. sales of $70.2 million. Tarceva was launched in the
United States in November 2004.
* U.S. sales of Rituxan® (Rituximab) increased 16 percent to $456.2
million, from U.S. sales of $393.0 million in the third quarter of 2004.
* U.S. sales of Xolair® (Omalizumab) increased 51 percent to $81.6
million, from U.S. sales of $53.9 million in the third quarter of 2004.
* U.S. sales of RAPTIVA® (efalizumab) increased 28 percent to $20.9
million, from U.S. sales of $16.3 million in the third quarter of 2004.
* U.S. sales of legacy products, including growth hormone, cardiovascular
products and Pulmozyme® (dornase alfa, recombinant) Inhalation
Solution, increased 9 percent to $193.1 million, from U.S. sales of
$177.6 million in the third quarter of 2004.
* Product sales to collaborators increased 54 percent to $85.7 million,
from sales of $55.5 million in the third quarter of 2004. The increase
in product sales to collaborators primarily consisted of Avastin sales
to Roche.
Royalties and Contract Revenues
* Royalties increased 55 percent to $237.8 million from $153.9 million in
the third quarter of 2004.
* Contract revenues increased 46 percent to $63.0 million from $43.2
million in the third quarter of 2004.
Total Costs and Expenses
* Cost of sales increased 39 percent to $230.1 million from $166.0 million
in the third quarter of 2004, primarily due to higher product sales.
Cost of sales as a percentage of product sales was 16 percent, compared
to 17 percent in the third quarter of 2004.
* Research and development (R&D) expenses increased 40 percent to $328.9
million from $234.1 million in the third quarter of 2004. R&D expenses
as a percentage of operating revenues were 19 percent, comparable to the
third quarter of 2004.
* Marketing, general and administrative (MG&A) expenses increased 32
percent to $349.3 million from $264.6 million in the third quarter of
2004. MG&A expenses as a percentage of operating revenues were 20
percent, compared to 22 percent in the third quarter of 2004.
* Collaboration profit-sharing expenses in the third quarter of 2005
increased 45 percent to $219.6 million from $151.9 million in the third
quarter of 2004.
The unrestricted cash and investments portfolio totals approximately $4.1 billion as of September 30, 2005. Among other items, the cash balance reflects the receipt of $2 billion from the company's July 2005 debt offering and the use of approximately $929 million related to share repurchase activity in the third quarter. Also in the third quarter, the company paid approximately $585 million to buy out two synthetic lease obligations associated with its Vacaville and South San Francisco facilities.
Clinical Development
"We are making good progress in our efforts with the FDA to establish our filing timelines. We completed two sBLAs for Rituxan in the past quarter and plan to submit additional filings for Lucentis, Herceptin, Rituxan and Avastin within the next nine months," said Susan D. Hellmann, M.D., M.P.H., president of Product Development. "We plan to file sBLAs for Avastin in first-line non- squamous, non-small cell lung cancer and in first-line metastatic breast cancer during the first half of 2006."
Genentech anticipates filing a supplemental Biologics License Application (sBLA) in the first quarter of 2006 for Herceptin in the adjuvant setting based on data from U.S. studies. Genentech announced that, in addition to initiating the Phase III study of Avastin in first-line metastatic ovarian cancer, it completed enrollment in both the Phase I/II second-generation Anti- CD20 study in rheumatoid arthritis and the Phase I BR3-Fc study in rheumatoid arthritis.
Other Company Activity
The company provided additional information on the pending reexamination of the Cabilly, et al. U.S. Patent No. 6,331,415 (Cabilly patent). Genentech estimates that the process leading up to a final Office action or a notice of intent to issue a reexamination certificate from the U.S. Patent and Trademark Office may take from two to 12 months and that any appeals process may take several years. The overall net pre-tax income to Genentech from revenues and expenses related to the Cabilly patent was approximately $20 million for the third quarter of 2005, or approximately $0.01 per share. Genentech believes that the third quarter 2005 Cabillly-related pre-tax income figure represents approximately one-quarter of the full year's expected results, excluding the effects of a one-time licensee payment related to 2004 sales that was recorded in the first quarter of 2005.
In September 2005 the FDA granted approval for the manufacture of Rituxan bulk drug substance at Lonza's Portsmouth, New Hampshire production facility.
Webcast:
Genentech will be offering a live webcast of a discussion by Genentech management of the earnings and other business results on Monday, October 10, 2005, at 2:15 p.m. Pacific Time (PT). The live webcast may be accessed on Genentech's Website at gene.com . This webcast will be available via the Website until 5:00 p.m. PT on October 24, 2005. A telephonic audio replay of the webcast will be available beginning at 5:15 p.m. PT on October 10, 2005 through 5:15 p.m. PT on October 17, 2005. Access numbers for this replay are: 1-800-642-1687 (U.S./Canada) and 1-706-645-9291 (international); conference ID number is 9678548.<<
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Cheers, Tuck |
