Genentech displays strong growth again

The company has seen its pre-tax profit jump by 38 per cent to $1.18bn (€0.86bn) and its operating profit shoot up 49 per cent to $1.12bn on the comparable 2006 quarter. Revenues for the firm have now climbed to $3bn, an increase of 37 per cent, with the majority attributed to sales of its products in the US ($2.15bn). The company's US continual top seller, rheumatoid arthritis (RA) and non-Hodgkins lymphoma (NHL) drug Rituxan (rituximab) remained a strong performer, with sales of $582, up 11 per cent on last year's Q2. Avastin (bevacizumab), a colorectal and small-cell lung cancer treatment, remained the second biggest earner and continued to display strong growth this quarter, with sales elevating 33 per cent to reach $564m, after showing almost a doubling of sales between the second quarter figures for the Q2 of 2006 and 2005. However, some analysts have predicted a future slow down in sales after data reported last month indicated the drug could slow the spread of lung cancer at a much lower does. If doctors begin prescribing the drug in this way it could halve the monthly cost of using it to $4,400. HER-2 positive breast cancer drug Herceptin (trastuzumab), although coming in at Genentech's number three, showed near stagnant sales when comparing the second quarter of 2006 and 2007, rising by only 3 per cent to reach $329m, when previously, between the same quarters of 2005 and 2006 sales had more than doubled. This growth lapse is likely due to the emergence on the scene of GlaxoSmithKline's newer rival drug, Tykerb (lapatinib). One strong revenue generator was Lucentis (ranibizumab), which was only launched last year as a therapy for age-related macular degeneration (AMD), and this quarter clocked up sales of $209m. Meanwhile, the firm's royalty revenues (the bulk of which comes from a long-term relationship with Roche) were up by $168m, to total $484m, helped along by $65m in one-time revenues related to a "new collaboration agreement". Contract revenue rose slightly to $77m. At the same time, general and administrative spending rose by 13 per cent; direct costs were up by 51 per cent; and R&D expenses jumped by 55 per cent. Part of this was spent on the initiation of eight new Phase III clinical trials during the quarter, involving Lucentis in patients with diabetic macular edema and retinal vein occlusion; Avastin in adjuvant non-small cell lung cancer and second-line metastatic colorectal cancer; and two additional trials of second-generation humanised anti-CD20 (ocrelizumab) for RA. Genentech also said that during the quarter it submitted two supplemental Biologics License Applications (sBLAs) to the US Food and Drug Administration (FDA) for Herceptin in adjuvant breast cancer. In addition, the firm's cell culture manufacturing facility in Oceanside, California received FDA licensure to produce bulk Avastin drug product, providing 90,000L of capacity.