Friday, Mar 23, 2007
South San Francisco, Calif. -- March 23, 2007 --Genentech, Inc. (NYSE: DNA) is providing investors today with an overview of recent developments in its business, including highlights from its research, development, commercial, and manufacturing areas.
"Our efforts are focused on developing a strong pipeline with novel and important drugs that aim to be first-in-class or best-in-class. In the past 15 months we have nearly doubled the number of new molecular entities in our development pipeline and now have a total of 21," said Arthur D. Levinson, Ph.D., Genentech's chairman and chief executive officer. "We continue to make decisions based on building value over the long term and place patient benefit first and foremost in our research and development decisions."
The company is making the following announcements today:
Genentech will be offering an archived webcast of the investment community meeting on its website at http://www.gene.com. The webcast will be archived and available for replay until 8:00 p.m. Eastern Time on April 6, 2007.
Founded more than 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 1985, Genentech has donated 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 2006 alone, GATCF supported over 14,000 patients by providing approximately $205 million of free product. Since 2005, Genentech has donated approximately $70 million 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.
This press release contains forward-looking statements regarding our Horizon 2010 goals of bringing new molecular entities into clinical development, achieving compound annual non-GAAP earnings per share (EPS) growth of 25 percent, and cumulative free cash flow of $12 billion; growth in 2007 non-GAAP EPS; U.S. product sales for the first quarter and demand for our products; construction and licensure of a manufacturing facility in Singapore; employee stock-based compensation and sabbatical leave expense; and expenses associated with the proposed Tanox transaction. Such forward-looking statements are predictions and involve risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to, the results of clinical trials; additional time requirements for data analysis; BLA preparation and decision making; FDA actions or delays; failure to obtain or maintain FDA approval; difficulty in obtaining materials from suppliers; unexpected safety, efficacy or manufacturing issues; the ability to supply product; increased capital expenditures including greater than expected construction and validation costs; our ability to lease land in Singapore for the construction of a manufacturing facility; product withdrawals; competition; pricing decisions by us or our competitors; our ability to protect our proprietary and contract rights; the outcome of, and expenses associated with, litigation or legal settlements; our cost of sales, other expenses and indebtedness; variations in collaborator sales and collaboration expenses; actions by Roche that are adverse to our interests; decreases in third party reimbursement rates; changes in accounting or tax laws or regulations or the application or interpretation of such laws or regulations; and the extent to which all closing conditions are met for our proposed acquisition of Tanox including the absence of a material adverse effect with respect to Tanox. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this press release.
1 1 Our 2007 non-GAAP earnings per share does not include the effects of: (i) recurring amortization charges related to the 1999 redemption of our stock by Roche, which are estimated to be approximately $104 million on a pretax basis in 2007, (ii) litigation-related special items for accrued interest and associated bond costs on the City of Hope judgment and net amounts paid on other litigation settlements, which are currently estimated to be approximately $54 million on a pretax basis in 2007, (iii) income tax effect of $63 million on recurring charges related to redemption and litigation-related special items, (iv) employee stock-based compensation expense, which we expect the net of tax diluted EPS impact to be in the range of $0.23 to $0.25 per share for 2007, (v) the cumulative effect of a change in accounting principle related to sabbatical leave associated with Genentech's adoption of Emerging Issues Task Force Issue No. 06-2 on January 1, 2007, which we expect the net of tax diluted EPS impact will be approximately $0.02 per share for 2007, and (vi) any in-process R&D charge and amortization of intangible assets that would result if we acquire Tanox, Inc. Our 2007 GAAP EPS would include the items listed above as well as any other potential special charges related to existing or future litigation or its resolution, or changes in accounting principles, all of which may be significant.
2 The non-GAAP EPS goal for 2006 through 2010 excludes the after-tax effects of the following items: employee stock-based compensation expense associated with our adoption of FAS 123R, recurring charges related to the redemption of our stock by Roche, litigation-related special charges for accrued interest and associated bond costs on the City of Hope judgment, the cumulative effect of an accounting change related to sabbatical leave, the effect of any in-process R&D charge and amortization of intangible assets that would result if Genentech acquires Tanox, Inc., and other potential special charges related to existing or future litigation or its resolution, and changes in accounting principles, all of which may be significant. GAAP EPS for 2006 through 2010 would include the items described above.
3 Our free cash flow measure is defined as cash from ongoing operations less gross capital expenditures. Cash from ongoing operations is derived from the "net cash provided by operating activities" line in our consolidated statements of cash flows excluding the effect of changes in the trading portfolio, but this number could be adjusted for items that would allow the measure to better reflect our operational performance. These adjustments include, for example, cash receipts or payments related to litigation settlements, investments in trading securities and other potential items, any of which may be significant.