Tuesday, Jan 10, 1984
South San Francisco, Calif. -- January 10, 1984 --Genentech president Robert A. Swanson, speaking at the Second Annual Health Care Conference held today by Hambrecht & Quist, provided stock analyst with a preview of year-end results and expectations for the future.
"1983 revenues will exceed 1982 by 40-50%, and 90% of these revenues will come from operations -- contract revenue, product licensing revenue, and production under research and development contracts. 1984 revenues are projected to grow in the same range, with the majority of revenues still coming from contract and licensing sources."
"1983 will be the fifth year of profitability for Genentech. In the past few years, we have intentionally operated near-breakeven, so that we could reinvest cash flow into developing our products."
"1984 is expected to be the final stage of our transition into a pharmaceutical company that not only develops and manufactures ethical drugs, but also markets products under its own label." Depending upon the timing of human growth hormone marketing, this year may also see us begin to accelerate away from near-breakeven toward significantly greater earnings. Of course, 1984 would see only the modest beginnings of that trend.
"As reported previously, we filed our New Drug Application with the Food and Drug Administration (FDA) last fall for the treatment of short stature due to growth hormone deficiency. We have since received request for additional information, which we are in the process of gathering for the FDA. This work is expected to cover a period of months; so we do not expect to receive marketing approval during the first quarter of this year as we earlier projected. We still anticipate that 1984 will see our product in the marketplace and our first revenues from product sales to patients. This could even net a modest income per share during 1984."
Four other Genentech products also are advancing rapidly along the development pipeline, according to Swanson."The first U.S. human clinical trials on human gamma interferon were recently initiated, to determine safety and effectiveness as an anti-cancer drug. Preclinical testing has us very excited about the potential for gamma in the treatment of a number of cancers, as well as several viral diseases.
"Tissue-type plasminogen activator is close to human evaluation. We believe these tests will prove it to be the most effective means of dissolving blood clots in people suffering from heart attacks and other life-threatening conditions.
"Field trials of bovine interferon began last year, for the prevention of Bovine Respiratory Disease (shipping fever). Development on a not yet announced product is also progressing rapidly; human clinical evaluation should begin shortly."
Genentech, Inc. is a leader in the development, manufacture and marketing of recombinant DNA products, principally for human and animal health care. Founded in 1976, it now has 545 employees. Nine month results for the period ending September 30, 1983 showed $33.5 million in revenues, $902 thousand or $.06 per share in net income, and total assets of $117 million.
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