Genentech Says It Expects to Match 2000 Profit Forecasts

Biotechnology giant Genentech Inc. on Wednesday said it expects to meet profit forecasts in 2000, mostly on sales of cancer drugs, with its experimental asthma drug Xolair adding to revenue next year.

South San Francisco-based Genentech, which had profit from operations of 47 cents a share in 1999, expects profit per share to rise 25% to 28% in 2000 and 25% a year for the next five years. It’s expected to earn 60 cents a share, the average estimate of analysts surveyed by First Call/Thomson Financial.

Chief Financial Officer Louis Lavigne told investors at a Prudential Vector Healthcare conference that the company expects Xolair to win Food and Drug Administration approval early next year. Studies of the drug, which Genentech is developing with Novartis and Tanox Inc., were halted in September after animal tests with a related drug suggested safety problems. Data from the studies are being reviewed by regulators.

“The problems look to be minor,” said Rob Toth, an analyst with Prudential Vector Healthcare, who rates Genentech “accumulate.” “I think the clinical hold will be lifted this month.”

Toth said he expects Xolair sales of $61 million next year, reaching $1 billion by 2005.

Genentech also said its drug development work will accelerate. The company, which has 20 products in its pipeline, expects approval for two of those by 2002.

Shares of Genentech fell $1.25 to close at $86.75 on the New York Stock Exchange.

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Biotech Bet

Genentech, which has seen its stock rise 29% this year, says that its drug development work will accelerate and that it has 20 products in the pipeline.

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Monthly closes and latest on the NYSE

Wednesday $86.75, down $1.25

Source: Bloomberg News