Genentech May Produce as Many as 15 New Drugs by 2015 (Update2)
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By Lisa Rapaport and Elizabeth Lopatto
March 2 (Bloomberg) -- Genentech Inc., fighting a hostile bid from majority owner Roche Holding AG, said it may begin selling 15 new drugs from 2011 to 2015.
Earnings excluding some items this year may be $3.85 a share, the South San Francisco company said today in slides posted on its Web site. Genentech forecast adjusted profit of $3.55 to $3.90 on Jan. 15.
Genentech said the company is worth at least $112 a share, or 29 percent more than Roche’s $42.1 billion, $86.50-a-share bid, according to a Feb. 23 regulatory filing. The company may introduce 24 new uses for existing medicines, including its top- selling cancer drug Avastin, from 2009 to 2011, according to documents posted on Genentech’s Web site today. The company, the second-largest maker of biotechnology drugs, is holding its annual business briefing for investors in New York today.
“We do not believe the Roche tender offer of $86.50 per share adequately reflects the value and future potential of Genentech,” Chief Executive Officer Arthur Levinson said at the meeting. “We believe we have the potential to create significantly more value for shareholders due to the strength of our products, our pipeline, our people and our track record.”
Genentech’s is developing 25 drugs that qualify as “new molecular entities,” or compounds that don’t contain molecules previously approved by U.S. regulators, Genentech said in a slide presentation at today’s meeting. While the company is experimenting with new products for cancer, arthritis and multiple sclerosis, much of its growth will come from new markets for Avastin, according to the presentation.
Avastin
Avastin, already approved for advanced colon, lung and breast cancer, could also be marketed for 20 other uses by 2015, Genentech said. Avastin generated $4.8 billion in 2008 sales.
The company’s revenue is expected to reach $14.1 billion this year, Genentech said.
Genentech last week rebuffed Roche’s latest offer as too low. Roche’s offer expires on March 12.
“Investors expect this deal to get done; the only question is coming down to price and who blinks first,” Michael Sansoterra, portfolio manager at Silvant Capital, said in an Feb. 27 interview. Silvant is owned by Atlanta-based SunTrust bank, which owned 569,800 Genentech shares as of Dec. 31.
C-08 Trial
A key point of contention between Genentech and Roche centers on an Avastin study called C-08, which is testing the medicine in patients with early stage colon cancer. Results from the 2,710-patient trial are expected in April.
Sue Desmond-Hellmann, president of Genentech product development, said she’s “cautiously optmistic” about the C-08 trial, because Avastin already works against advanced colon cancer. |
