Analysts See Biotech Firms Posting Strong Results On New Products
Dow Jones Online News, Monday, April 13, 1998 at 12:25
By Jennifer Fron Mauer, Staff Reporter
NEW YORK -(Dow Jones)- New products drove up-and-coming biotechnology
companies to strong gains in first-quarter earnings, while more
established biotech concerns are expected to turn in relatively modest
profit increases for the quarter.
Interneuron Pharmaceuticals Inc. (IPIC), which continues to struggle
after its diet drug Redux was recalled by the Food and Drug
Administration, still stands out with its increasing losses.
The Lexington, Mass.-based company, which just completed its fiscal
second quarter, is expected to post a loss of 58 cents a share, compared
with a loss of 19 cents a year earlier.
Of particular interest in the first quarter were the companies that
launched products in the past few months, analysts said Monday. Some
already are showing strong performances.
Seattle-based Pathogenesis Corp. (PGNS), which in January launched
Tobi, its inhalable cystic fibrosis treatment, is expected to report a
loss of 10 cents a share for the quarter, compared with a loss of 43
cents a year ago, according to mean estimate of analysts surveyed by
First Call. Jay Silverman, an analyst with BancAmerica Robertson
Stephens & Co., expects sales of Tobi to be around $11 million to $13
million for the quarter.
Idec Pharmaceuticals Corp.'s (IDPH) expected first-quarter profit of
five cents a share, reversing a year-ago loss of 12 cents, was propelled
by sales of its cancer drug, Rituxin, which received FDA approval late
last year. Eric Hecht, an analyst with Merrill Lynch & Co., said the San
Diego-based company probably saw Rituxin achieve sales of $35 million in
the first quarter.
Several biotechnology companies, whose newest products have been on
the market for some time, also are expected to turn in strong first
quarters.
For example, Sequus Pharmaceuticals Inc.'s (SEQU) Doxil was approved
by the FDA in 1995 for use in treating Kaposi's sarcoma, a common form
of cancer among AIDS patients, but off-label uses have boosted the
drug's sales in the past 12 months. That increase in off-label use has
been driven by recently published medical journal articles that extolled
Doxil's effectiveness in treating breast cancer and ovarian cancer,
analysts said.
Silverman said he expects Doxil's sales to have risen to $11 million
to $12 million for the first quarter. That would be the drug's
fourth-consecutive increase in quarterly sales. As a result, the Menlo
Park, Calif.-based company is expected to report a loss of 12 cents a
share in the first quarter, according to First Call. That compares with
a loss of 25 cents reported a year ago.
Agouron Pharmaceuticals Inc. (AGPH) continues to benefit from the
stellar performance of its protease inhibitor, Viracept, which was
launched last year. Viracept's fiscal third-quarter sales are expected
to have been about $94 million, according to Silverman, propelling
Agouron, of La Jolla, Calif., to a profit of 39 cents a share, compared
with a loss of 19 cents a year earlier, adjusting for a 2-for-1 stock
split in August.
Profit increases at Medimmune Inc. (MEDI) continue to be propelled by
sales of RespiGam, which was approved in 1996 and is used in treating
respiratory syncytial virus, a serious, sometimes fatal, respiratory
illness. The Gathersburg, Md.-based company is expected to post a profit
of 22 cents a share, reversing a loss of 65 cents a year ago.
More-established biotech companies are expected to turn in less
exciting quarters, analysts said.
Amgen Inc. (AMGN) should turn in a modest profit improvement, with
analysts surveyed by First Call arriving at a mean profit estimate of 67
cents a share, up from 65 cents a year ago. Chiron Corp. (CHIR) is
expected to earn 10 cents a share in the first quarter, up from nine
cents a year ago. Genzyme Corp.'s (GENZ) earnings should come in around
30 cents a share, compared with 27 cents a year ago.
-Jennifer Fron Mauer; 201-938-5287;
jennifer-fron.mauer@cor.dowjones.com
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