Friday, Apr 15, 1994
South San Francisco, Calif. -- April 15, 1994 --Genentech, Inc. (NYSE: GNE) announced today that earnings for the first quarter of 1994 more than doubled to $38.9 million, or 33 cents per share, from $14.3 million, or 12 cents per share, in the first quarter of 1993. Revenues increased 30 percent to $198.9 million, from $153.0 million in the same quarter of 1993. This increase results primarily from higher product sales, due to both initial sales of two new products and an increase in sales of earlier products.
"The first quarter of 1994 was an excellent one for Genentech," said Genentech President and Chief Executive Officer G. Kirk Raab. "Besides our good financial results we launched two new products, Nutropin® human growth hormone for treating growth failure resulting from chronic renal insufficiency and Pulmozyme® DNase for treating cystic fibrosis. In addition we received approval to market Nutropin for a second indication, growth hormone inadequacy in children, and we completed with positive results an important Phase II trial of Pulmozyme in certain chronic bronchitis patients."
Pulmozyme (dornase alfa) entered the cystic fibrosis market with sales for the first quarter of 1994 of $22.4 million, including initial stocking orders, reflecting acceptance by cystic fibrosis physicians and patients.
Genentech now markets Pulmozyme in the United States, Canada and, through Genentech Europe Limited, the United Kingdom and Ireland. Genentech Europe will also market Pulmozyme in the Netherlands and Germany as soon as it is approved for marketing there. Genentech's marketing partner for Pulmozyme, F. Hoffmann-La Roche, Ltd., markets the drug in other countries where it has been approved.
Due primarily to costs associated with the market launch of Pulmozyme, marketing, general and administrative expenses in the first quarter of 1994 rose to $60.1 million compared to $46.5 million in the first quarter of 1993.
Sales of Activase® (Alteplase, recombinant) t-PA increased 43 percent to $70.2 million from $49.2 million in the first quarter of 1993. This increase reflects Activase's growth in market share from one half to more than 70 percent since the results of the GUSTO* clinical trial were announced in April 1993 and published in the New England Journal of Medicine in September 1993. The results showed a significant life-saving advantage for heart attack patients to using Activase over the other thrombolytic regimens studied.
Sales of Genentech's two human growth hormone products Protropin® (somatrem for injection) and Nutropin (somatropin for injection) increased 3 percent to $53.6 million from $52.2 million in the first quarter of 1993. This increase is largely due to the introduction of Nutropin for treating growth failure resulting from chronic renal insufficiency.
Genentech did not face new competition in the growth hormone market in the quarter, though this possibility exists in the future. New competitors could enter the market any time upon receiving FDA approval. Genentech anticipates some decrease in sales if competitors enter the market.
During the quarter, Genentech entered an agreement with PCS Health Systems, Inc. to develop a new, computerized managed care distribution system for its growth hormone products.
"This system will give us an entree into the increasingly important managed care customer segment, which already works extensively with PCS," said Raab.
Actimmune® (interferon gamma-1b) sales increased to $1.6 million from $1.3 million in the first quarter of 1993. Sales for this product remain modest because the approved indication, chronic granulomatous disease, is rare.
Research and development (R&D) expenses in the first quarter of 1994 were $74.4 million compared to $74.2 million in the first quarter of 1993, reflecting a continued commitment to aggressive investment in R&D.
Two projects in Genentech's product pipeline reached important milestones in the quarter. Genentech completed a placebo-controlled Phase II clinical trial of Pulmozyme for treating hospitalized chronic bronchitis patients with acute exacerbations of the disease. To be reported at a medical meeting in May, the results showed no adverse effects of Pulmozyme therapy and a statistically significant mortality reduction in patients receiving Pulmozyme versus those receiving placebo. Though promising, these results are not considered conclusive. Genentech plans to begin international, approval directed Phase III clinical trials of Pulmozyme for this indication in the Fall of 1994.
In addition, during the first quarter Genentech began Phase I trials of its anti-lgE humanized monoclonal antibody for treating allergic rhinitis and asthma.
Genentech, Inc. is a leading biotechnology company that discovers, develops, manufactures and markets human pharmaceuticals for significant medical needs. The company has headquarters in South San Francisco, California and is traded on the New York and Pacific Stock exchanges under the symbol GNE.
*GUSTO stands for Global Utilization of t-PA and Streptokinase in Occluded coronary arteries.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Ended March 31,
|Contract and other||7,527||10,529|
|Costs and expenses|
|Cost of sales||22,131||16,599|
|Research and development||74,376||74,222|
|Marketing, general and administrative||60,111||46,503|
|Total costs and expenses||158,396||138,663|
|Income before taxes||40,474||14,334|
|Income tax provision||1,619||-|
|Net income per share||$||0.33||$||0.12|
|Weighted average number of shares used in
computing per share amounts:
|Selected balance sheet data|
|Cash and short-term investments||$||688,575||$||431,767|
|Long-term marketable securities||92,108||227,147|
|Property, plant and equipment, net||466,591||445,645|
|Other long-term assets||50,444||45,360|
|Total current liabilities||186,092||144,934|
|Total stockholders' equity||1,176,172||1,035,170|