Tuesday, Oct 10, 2006
South San Francisco, Calif. -- October 10, 2006 --Genentech, Inc. (NYSE: DNA) today announced financial results for the third quarter of 2006. Revenue results for the third quarter of 2006 include:
Key operating results for the third quarter of 2006 include:
A reconciliation2 between non-GAAP and GAAP earnings per share for the third quarters of 2006 and 2005 is provided in the following table:
|Non-GAAP Diluted EPS||Employee Stock Compensation Expense||Roche Redemption and Special Items||Reported GAAP Diluted EPS|
"We are encouraged by strong initial physician acceptance of Lucentis. The rapid adoption of the recently available Lucentis product reflects the fact that wet age-related macular degeneration is a key unmet medical need, and we are proud to have brought this new therapy to thousands of patients faced with potential blindness," said Arthur D. Levinson, Ph.D., Genentech's chairman and chief executive officer.
The company currently expects approximately 65 to 70 percent growth in non-GAAP earnings per share for the full year 2006, relative to 2005.2
For the three months ended September 30, 2006:
Royalties and Contract Revenues
Expenses and Other
Genentech's unrestricted cash and investments portfolio totaled approximately $4 billion as of September 30, 2006.
Genentech announced that in the third quarter of 2006 it completed enrollment of a Phase III study of Avastin in adjuvant colon cancer as well as a Phase II study of Omnitarg (pertuzumab) in combination with chemotherapy in advanced ovarian cancer. Genentech's collaborator OSI Pharmaceuticals initiated enrollment in its RADIANT Phase III study of Tarceva for EFGR-positive patients with early-stage (adjuvant) non-small cell lung cancer, and Genentech initiated enrollment in a Phase III TNKase® (Tenecteplase) catheter clearance study. Genentech also announced that its Phase II study of Rituxan with its collaborator Biogen Idec, Inc. for patients with relapsing remitting multiple sclerosis met its primary endpoint of reducing Gadolinium-enhancing lesions and showed a statistically significant reduction in the number of relapses among patients treated with Rituxan.
In the third quarter of 2006 Genentech added four new molecular entities to the development pipeline, including the PARP inhibitor for malignant melanoma with its collaborator Inotek Pharmaceuticals Corporation, and a systemic hedgehog antagonist for solid tumors with its collaborator Curis, Inc.
Other Company Events
In September 2006, the U.S. Food and Drug Administration granted approval for the manufacture of Herceptin bulk drug substance at Wyeth's Andover, Mass. production facility.
Genentech will be offering a live webcast of a discussion by Genentech management of the earnings and other business results on Tuesday, October 10, 2006, at 2:15 p.m. Pacific Time (PT). The live webcast may be accessed on Genentech's website at http://www.gene.com. This webcast will be available via the website until 5:00 p.m. PT on October 24, 2006. A telephonic audio replay of the webcast will be available beginning at 5:15 p.m. PT on October 10, 2006 through 5:15 p.m. PT on October 17, 2006. Access numbers for this replay are: 1-800-642-1687 (U.S./Canada) and 1-706-645-9291 (international); conference ID number is 5587251.
Founded 30 years ago, Genentech is a leading biotechnology company that discovers, develops, manufactures and commercializes biotherapeutics for significant unmet medical needs. A considerable number of the currently approved biotechnology products originated from or are based on Genentech science. Genentech manufactures and commercializes multiple biotechnology products and licenses several additional products to other companies. The company has headquarters in South San Francisco, California and is listed on the New York Stock Exchange under the symbol DNA. For additional information about the company, please visit http://www.gene.com.
About Genentech's Commitment to Patient Access
Genentech is committed to eligible patients having access to our therapies. For those eligible patients treated for approved indications in the United States who do not have insurance or who cannot afford their out-of-pocket co-pay costs, Genentech has several support programs. Since 1990, Genentech has donated approximately $850 million of free product to uninsured patients and those deemed uninsured due to payor denial through its Genentech® Access to Care Foundation (GATCF) and the Genentech Endowment for Cystic Fibrosis. In 2005 alone, GATCF supported over 18,000 patients by providing approximately $200 million of free product. Since 2005, Genentech donates to various independent public charities that provide financial assistance to eligible patients who cannot access needed medical treatment due to co-pay costs. Through its Single Point of Contact (SPOC) program, Genentech provides patients with assistance and information on a broad array of reimbursement services and support.
For information on Genentech's latest business and product development events please refer to http://www.gene.com/gene/news/press-releases/index.jsp.
This press release contains a forward-looking statement regarding growth in non-GAAP earnings per share (EPS) for 2006. Such a statement is a prediction and involves risks and uncertainties such that actual results may differ materially. Among other things, growth in non-GAAP EPS could be affected by a number of factors, including unexpected safety, efficacy or manufacturing issues, additional time requirements for data analysis, BLA preparation and decision making, need for additional clinical trials, FDA actions or delays, failure to obtain or maintain FDA approval, competition, pricing, reimbursement, intellectual property or contract rights, the ability to supply product, product withdrawals, new product approvals and launches, achieving sales revenue consistent with internal forecasts, costs of sales, unanticipated expenses such as litigation or legal settlement expenses or equity securities writedowns, R&D or MG&A expenses, stock-based compensation expense, contract revenues and royalties, and fluctuations in tax and interest rates. Please also refer to Genentech's periodic reports filed with the Securities and Exchange Commission. Genentech disclaims, and does not undertake, any obligation to update or revise any forward-looking statement in this press release.
1 The company adopted Statement of Financial Accounting Standards No. 123R (or FAS 123R) on a modified prospective basis beginning January 1, 2006. No employee stock-based compensation expense has been recognized in GAAP-reported amounts in any prior period. Based on the pro forma application of FAS 123 for the calculation of employee stock-based compensation expense prior to January 1, 2006 (as previously disclosed in Genentech's financial statement footnotes), pro forma employee stock-based compensation expense in the third quarter of 2005 was $43 million, net of tax, (or $0.04 per diluted share), and the resulting pro forma GAAP net income was $316 million (or $0.29 per diluted share).
2Genentech's non-GAAP net income and non-GAAP earnings per share exclude the after-tax impact of recurring charges related to the 1999 redemption of Genentech's stock by Roche Holdings, Inc., litigation-related special items, and employee stock-based compensation expense associated with Genentech's adoption of FAS 123R on January 1, 2006. The differences in non-GAAP and GAAP numbers are reconciled in the accompanying tables and on www.gene.com.