Profit Soars At Biotech Giant
Genentech Inc.'s profit rose 64 percent in the fourth quarter, rounding off an outstanding year of gains as the South San Francisco biotechnology leader's cancer drugs continued to build sales.
Genentech's earnings per share grew 63 percent to 31 cents in the three months ending Dec. 31, the company reported Tuesday. Operating revenue topped $1.89 billion -- a 44 percent jump. Leaving aside litigation expenses and other special items, Genentech's earnings met analysts' expectations at 34 cents per share.
For the full year, Genentech's revenue reached a record $6.6 billion, fed by the sustained growth of its mainstay cancer drugs Rituxan, Herceptin and Avastin. Earnings per share rose 62 percent to $1.18 in 2005. Profit for the full year was $1.28 billion -- a 63 percent increase over the $784 million gleaned in 2004.
Genentech's consistent growth has buoyed its share price so much that it narrowly surpassed Amgen of Thousand Oaks (Ventura County), which has been the world's largest biotech firm, in market capitalization. Both biotech leaders have attained values close to $100 billion, besting some major pharmaceutical firms.
While Amgen's revenue is still about double that of Genentech, investors pay a higher premium for the Bay Area firm's shares because of its growth performance, said JPMorgan analyst Ronald Renaud.