Wednesday, Apr 12, 1995
South San Francisco, Calif. -- April 12, 1995 --Genentech, Inc. (NYSE: GNE) announced today that earnings for the first quarter of 1995 increased 11.6 percent to $43.4 million, or 36 cents per share, from $38.9 million, or 33 cents per share, in the first quarter of 1994. Revenues increased 20.2 percent to $239.0 million, from $198.9 million in the same quarter of 1994, reflecting increases in all revenue areas.
"Our results for the first quarter of 1995 are strong," said Genentech President and Chief Executive Officer G. Kirk Raab. "Even measured against the first quarter of 1994, which had been our best quarter ever."
During the quarter Genentech set the stage for continued growth, making key progress with its own pipeline products and announcing the acquisition of marketing rights to two late-stage development products. The company also announced the resolution of a long-standing dispute with Eli Lilly and Company regarding recombinant human growth hormone, which should result in payments from Lilly of $145 million (of which Genentech recorded an initial $7.5 million during the quarter). The approval this month of revised labeling for Activase® (Alteplase, recombinant) gives Genentech's leading marketed product new impetus for continued growth.
Days after the close of quarter, the U.S. Food and Drug Administration cleared for marketing the accelerated infusion of Activase for the management of acute myocardial infarction (heart attack), allowing revised labeling for the product that incorporates data from the worldwide GUSTO* trial. This international trial showed that the new regimen was superior compared to another clot-dissolving agent in that significantly fewer patients died. Sales of Activase during the first quarter increased 11.4 percent to $78.2 million from $70.2 million in the first quarter of 1994 due to an increase in the number of patients receiving thrombolytic therapy.
"Because we are now able to actively promote the accelerated infusion of Activase and its mortality benefits, we have a goal of increasing market share beyond its current level of more than 70 percent, which would translate into not only increased sales, but also, more importantly, prevent more deaths from heart attack," said Raab.
Now marketed in 19 countries, Pulmozyme® (dornase alfa) sales increased 27.2 percent to $28.5 million from $22.4 million in the first quarter of 1994 when it was launched in the United States and Canada. The increase reflects market launches in additional countries and continued adoption of this new therapy by physicians to treat cystic fibrosis patients. Said Raab, "We anticipate that more growth will occur over time, because new therapies often take time to become part of a physician's treatment procedures, particularly in such a serious condition as cystic fibrosis."
Sales of Genentech's two growth hormone products Protropin® (somatrem for injection) and Nutropin® (somatropin [rDNA origin] for injection) increased to $54.4 million from $53.6 million in the first quarter of 1994.
Genentech did not face new competition in the growth hormone market during the quarter, although it could at any time following FDA approval of a competitive product. Genentech has and will continue to actively assert its patent position, the strength and value of which was reaffirmed by the agreement announced during the quarter with Eli Lilly. If new competitors do enter the market, they could negatively impact future sales of Genentech's growth hormone, though the company has a comprehensive plan in place to defend its position.
Research and development (R&D) expenses in the first quarter of 1995 were $94.9 million compared to $74.4 million in the first quarter of 1994. R&D expenses increased year-to-year due to the company's aggressive commitment to R&D to move its products into later stages of clinical trials. The increase in the first quarter was particularly related to production of product for clinical trials and increased in-licensing expenses. Genentech expects R&D expenses to be somewhat lower in the remaining quarters of this year due to the timing of clinical trial expenses.
Two projects in Genentech's pipeline reached important milestones in the quarter:
Genentech rounded out its late-stage development pipeline during the first quarter of 1995, announcing the acquisition of marketing rights for two products through two separate R&D collaborations:
In both cases, Genentech acquired marketing rights in several world markets, with some sharing of rights in North America.
Genentech, Inc. is a leading biotechnology company that discovers, develops, manufactures and markets human pharmaceuticals for significant medical needs. Ten of the currently marketed biotechnology products stem from Genentech research, five of which Genentech markets directly. Genentech is headquartered in South San Francisco, California, and is traded on the New York and Pacific Stock Exchanges under the symbol GNE.* GUSTO stands for Global Utilization of t-PA and Streptokinase in Occluded coronary arteries.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Ended March 30,
|Contract and other||16,222||7,527|
|Costs and expenses|
|Cost of sales||26,750||22,131|
|Research and development||94,959||74,376|
|Marketing, general and administrative||64,323||60,111|
|Total costs and expenses||187,903||158,396|
|Income before taxes||51,064||40,474|
|Income tax provision||7,660||1,619|
|Net income per share||$||0.36||$||0.33|
|Weighted average number of shares used in
computing per share amounts:
|Selected balance sheet data|
|Cash and short-term investments||$||722,374||$||688,575|
|Long-term marketable securities||219,975||92,108|
|Property, plant and equipment, net||482,117||466,591|
|Other long-term assets||88,551||50,444|
|Total current liabilities||205,802||186,092|
|Total stockholders' equity||1,402,246||1,176,172|