Tuesday, Oct 23, 1990
South San Francisco, Calif. -- October 23, 1990 --As previously forecast, Genentech, Inc. (NYSE: GNE) posted a loss for the third quarter due to expenses related to its $2.1 billion merger transaction with Roche Holdings Ltd. which was completed on September 7. The third quarter loss was $133.7 million, or $1.45 per share, and the special charges, primarily merger-related expenses, for the quarter were $148.9 million, or about $1.60 per share. Earnings for the third quarter last year were $11.4 million, or 13 cents per share.
For the first time since its founding in 1976, Genentech's total assets topped $1 billion, reaching $1.1 billion, compared with $712.5 million a year ago. Total cash at the end of the third quarter was $678.3 million, up from $205.4 million a year ago. Total stockholders' equity almost doubled, from $448.7 million at the end of the third quarter last year, to $871.9 million this year.
"Our formidable financial position greatly enhances Genentech's ability to develop our reservoir of potential products," said G. Kirk Raab, president and chief executive officer. "We embark on this new era at a time when our science and operations are stronger than ever," he said. "We have the human and financial resources needed to continue to grow as an independent, integrated pharmaceutical company."
Revenues for the third quarter rose 12 percent, to $112.1 million, up from $100.0 million for the same quarter last year. Sales of the company's heart attack drug, Activase® or t-PA, were $48.2 million for the third quarter, compared with $43.6 million for the same quarter of 1989 and compared with $48.3 million for the second quarter of this year. Activase market share remained at nearly two-thirds during the third quarter, unchanged from the previous quarter.
Protropin®, human growth hormone, sales were $40.2 million, up from $32.4 million for the same quarter a year ago and compared with $41.2 million for the second quarter of this year.
Marketing, general and administrative expenses increased to $36.8 million, up from $32.0 million a year ago. The additional expenses are primarily for marketing expenses due to increased competition for Activase. Research and development expenses were $42.2 million, up from $38.5 million, largely due to additional products entering clinical trials.
Genentech has six potential new products in clinical trials and plans to begin clinical trials for a least one more product before the end of this year. Potential products currently in clinical trials are Actimmune?, gamma interferon, for chronic granulatomous disease, trauma-related infection and atopic dermatitis; CD4-IgG, for the treatment of AIDS; DNase, for cystic fibrosis; relaxin, for childbirth; insulin-like growth factor, for nutritional support and wound healing; and argatroban, for thrombolysis enhancement.
On September 7, Roche acquired 60 percent of the equity of Genentech with a total investment of $2.1 billion. Approximately $490 million of this was a direct investment by Roche in Genentech. Roche now has two of the 13 seats on Genentech's board of directors.
Combined with merger-related expenses incurred during the first and second quarters, special charges for the year are $167.7 million.
Genentech, Inc. is a leading biotechnology company focusing on the development, manufacture and marketing of pharmaceuticals produced by recombinant DNA technology.
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CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share amounts)