Tuesday, Sep 27, 1988
South San Francisco, Calif. -- September 27, 1988 --Genentech, Inc. said today that slower than expected growth in the market for thrombolytic -- or clot dissolving -treatment of heart attacks will affect the company's third quarter sales and earnings.
Third quarter product sales will be down approximately 20% from the second quarter, due to a slowing of the growth of the thrombolytic market, combined with the implementation in June of the special program to ensure that small community hospitals stock Activase®, Robert A. Swanson, Genentech chief executive officer, said.
"This impact should not affect the fourth quarter, but we expect third quarter earnings to be approximately flat with the six cents per share we reported a year ago."In the third quarter of 1987, Genentech reported net income of $5.2 million, or 6 cents per share, on total revenues of $48.0 million.
Speaking at a Montgomery Securities conference here Swanson said the company's clot-dissolving drug Activase, or t-PA, "in less than 10 months has captured almost two-thirds of an expanded U.S. market for thrombolytic therapy."
He added that while the thrombolytic market has increased by almost 50 percent since Activase was introduced, only 30 percent of eligible heart patients now receive any form of clot-dissolving therapy.
"Of the estimated 1.5 million Americans each year who suffer heart attacks, one-half arrive at the hospital in time for treatment. Of those, an estimated 400,000 could benefit from thrombolytic therapy. Yet, only 120,000 of these patients are being treated today.
"So the challenge for Genentech is not competition from other drugs but penetration of the thrombolytic market -- through hospital, physician and patient education."
Swanson said Genentech has filed with the Food and Drug Administration for a mortality claim for Activase, based on results of clinical trials. The company has also filed for approval of a new indication to treat pulmonary embolism, or blood clots in the lung.
At the conference, Swanson described "three extraordinary drugs under development at Genentech. They are only three out of many ... illustrating the breadth and range of our potential products, from cancer and infectious disease to AIDS to childbirth."
The products are gamma interferon, an immune system stimulator; CD4, a major potential therapy for AIDS for which human trials began two months ago; and relaxin, a human hormone with the potential to provide safe, natural childbirth for women who might otherwise require Caesarean section delivery.
Genentech also announced a series of executive promotions designed to strengthen its management organization for the next phase of growth.
Four vice presidents were promoted to senior vice president: James M. Gower, 40, marketing; David W. Martin, Jr., M.D., 47, research and development; Ralph Snyderman, M.D., 48, medical research and development; and William D. Young, 44, manufacturing and process sciences. Thomas M. Glenn, Ph.D., 48, senior director of pharmacological sciences, was promoted to vice president.
Louis J. Lavigne, Jr., 40, vice president and controller, was named chief financial officer. He succeeds R. Randolph Devening, who will continue as a vice president while pursuing other activities. Priscilla A. Myrick, 37, assistant controller since 1984, was named controller and Kathleen Sereda Glaub, 35, assistant treasurer for the past three years, was promoted to treasurer.
Genentech is a leading biotechnology company focused on the development, manufacture and marketing of human pharmaceuticals based on recombinant DNA technology.
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