Monday, Dec 12, 1988
South San Francisco, Calif. -- December 12, 1988 --Genentech, Inc. (NYSE: GNE) said today it anticipates total revenue for the year ending December 31 , 1988 of approximately $330 million, an increase of more than 40% over the previous year's total of $250.5 million, with net product sales of approximately $260 million, an increase of about 80% over 1987.
In a meeting of securities analysts in New York, G. Kirk Raab, Genentech's president and chief operating officer said he expects 1988 net sales of Activase®, the company's clot dissolving drug for heart attacks to reach around $150 million. Activase is being prescribed for nearly two-thirds of all patients in the U.S. who receive thrombolytic therapy. Net sales of Protropin®, the company's human growth hormone, are expected to be around $110 million.
"We anticipate that 1989 Rctivase sales will increase 20 to 25% over this year's, and Protropin sales should aIso rise. We are managing our business according to expectations of more than $300 million in product sales for next year," Raab said.
Earnings for 1988 are expected to be in the range of 23 to 26 cents a share, after a fourth quarter special charge of approximately $25 million (about 26 cents a share), compared with earnings of 50 cents a share in the previous year. The special charge is attributed primarily to an inventory reserve for Activase that may go out of date in future years.
The company intends to focus its financial resources in two major areas during the coming year. In the marketing and sales area, the company will expand its hospital-based sales force and mill continue educational programs directed toward increasing awareness of the benefits of thrombolytic therapy and the use of Activase. Continued strong investment in research and development will reflect the impact of a number of new products entering human clinical trials. At the same time expenses will be carefully controlled throughout the company.
"Genentech is the first biotechnology company to have completed the transition to a fully integrated pharmaceutical company," Raab said. "We now have the critical mass of talented employees and facilities in all major areas of the company. Focusing our resources in these two key areas -- marketing and R & D -- will ensure a broad portfolio of products for the 1990s and beyond."
The company expects cash flow from operations to be nearly $60 million this gear and a continued positive cash flow from operations in 1989. Major capital expenditures related to the company's expansion program are nearly complete. According to the company, Genentech's financial position is sound with an expected $115 million in cash at the end of 1988.
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