Wednesday, Oct 8, 2003
South San Francisco, Calif. -- October 8, 2003 --Genentech, Inc. (NYSE: DNA) today announced a 17 percent increase in non-GAAP (formerly pro forma) earnings per share for the third quarter of 2003 driven by a 19 percent increase in product sales compared to the third quarter of 2002. Genentech's non-GAAP earnings per share increased 37 percent to 93 cents for the first nine months of 2003.
"We are pleased with Genentech's strong quarter, and we remain on track to meet our 5X5 goals," said Arthur D. Levinson, Ph.D., Genentech's chairman and chief executive officer. "This quarter we also achieved several important milestones, including our launch of Xolair, the FDA panel's unanimous recommendation for approval of Raptiva and the completion of the BLA filing of Avastin."
Note: Genentech's non-GAAP earnings per share and non-GAAP net income exclude recurring charges related to the 1999 Roche redemption of Genentech's stock, litigation-related special items and the cumulative effect of the change in an accounting principle related to a synthetic lease. This information is itemized in the reconciliation tables below.
For the three months ended September 30, 2003:
For the third quarter of 2003:
Contract revenues increased to $45.6 million compared to $13.2 million in the third quarter of 2002. The increase in the third quarter of 2003 is primarily due to higher revenues from ongoing collaborations.
Total Costs and Expenses
Costs and expenses increased as anticipated in the third quarter of 2003 as compared to the third quarter of 2002.
For the third quarter of 2003:
"We are on track to meet or exceed our 2003 financial goals, including over $3 billion in revenues and annual non-GAAP EPS growth of at least 20 percent," said Louis J. Lavigne, Jr., Genentech's executive vice president and chief financial officer. "We are continuing to make solid progress toward our 5X5 goals, to be reached by the end of 2005."
Genentech is a leading biotechnology company that discovers, develops, manufactures and commercializes biotherapeutics for significant unmet medical needs. Sixteen of the currently approved biotechnology products originated from or are based on Genentech science. Genentech manufactures and commercializes 11 biotechnology products in the United States. The company has headquarters in South San Francisco, California and is traded on the New York Stock Exchange under the symbol DNA. For additional information about the company, please visit http://www.gene.com.
Genentech will be offering a live webcast of a discussion by Genentech management of the earnings and other business results on Wednesday, October 8, 2003 at 2:15 p.m. PT. The live webcast may be accessed on Genentech's website at http://www.gene.com. This webcast will also be available after the call via the website until 5:15 p.m. PT on October 22, 2003. An audio replay of the webcast will be available beginning at 5:15 p.m. PT on October 8, 2003, through 5:15 p.m. PT on October 15, 2003. Access numbers for this replay are: 1-800-642-1687 (US/Canada) and 1-706-645-9291 (international); conference identification number is 2846319.
Marketed and Pipeline Product Events
In September, Genentech and XOMA Ltd. announced that the U.S. Food and Drug Administration's (FDA) Dermatologic and Ophthalmic Drug Advisory Committee voted unanimously (11-0) to recommend that Raptiva (Efalizumab) be approved for the treatment of moderate-to-severe plaque psoriasis in adults age 18 or older. Also, at the American Academy of Dermatology ACADEMY 2003 meeting in late July, Genentech and XOMA announced positive results from two clinical studies evaluating the long-term safety and efficacy of treatment with Raptiva in adults with moderate-to-severe plaque psoriasis.
After a review of the Phase II ulcerative colitis data results, Genentech and Millennium Pharmaceuticals, Inc. have decided not to move forward with a Phase III study. The companies are currently in discussions regarding next steps with the MLN-02 program.
Genentech has decided to discontinue development of Anti-Tissue Factor (ATF) for acute coronary syndrome.
Genentech submitted a Biologics License Application (BLA) to the FDA for Avastin as a treatment for first-line metastatic colorectal cancer in combination with chemotherapy. Genentech has also requested Priority Review designation from the FDA. If granted, the target FDA action date would be six months from the completion of the BLA submission. This is Genentech's largest oncology BLA filing to date and the first ever for an anti-angiogenesis therapy for cancer. To date, more than 2,000 patients have been treated with Avastin in clinical studies.
In October, Genentech, OSI Pharmaceuticals Inc. and Roche announced that two first-line Phase III studies of Tarceva (erlotinib HCI) plus standard chemotherapy in metastatic non-small cell lung cancer did not meet their primary endpoints of improving overall survival. Genentech and OSI also announced that the first patient has been enrolled in a multi-center, open-label, Phase II clinical trial evaluating the safety and efficacy of Tarceva in patients with malignant glioma (brain cancer). The companies plan to enroll up to 110 patients who have experienced their first relapse of malignant glioma in the trial, which is being conducted by Genentech in collaboration with the Accelerate Brain Cancer Cure (ABC2) Clinical Network of leading neuro-oncology centers.
Genentech, IDEC Pharmaceuticals and Roche began enrolling patients in a Phase III global study of Rituxan for relapsed chronic lymphocytic leukemia.
Enrollment began in a Phase II study of single-agent Omnitarg (Pertuzumab) in patients with advanced non-small cell lung cancer who have previously received treatment with one or more chemotherapy regimens. The study will enroll 60 patients.
At the 21st Annual Meeting of the American Society of Retina Specialists in August, Genentech presented positive preliminary six-month data from a Phase Ib/II randomized, single-agent study with Lucentis (ranibizumab), formerly known as rhuFab V2, for patients with the wet form of age-related macular degeneration (AMD). Genentech also initiated a second Phase III trial in patients with predominantly classic macular degeneration.
Genentech announced that it settled its patent litigation with Amgen, Inc. in the U.S. District Court for the Northern District of California. Genentech filed its original complaint against Amgen in 1996. Under the settlement agreement, both parties agreed to dismiss their claims and counterclaims against each other. As part of the settlement, Amgen made a one-time payment to Genentech.
In the third quarter of 2003, Genentech promoted Richard Scheller, Ph.D., to executive vice president, Research and hired Marc Tessier-Lavigne, Ph.D., as senior vice president, Research Drug Discovery. The company also announced the promotions of Diane Parks to senior vice president and general manager, Specialty Biotherapeutics and Managed Care; Andrew C. Chan, M.D., Ph.D., to vice president, Research-Immunology; Vishva Dixit, M.D., to vice president, Research-Molecular Oncology; and David Logan to vice president, Specialty Therapeutics.
The statements made in this press release relating to Genentech's 2003 financial goals, including growth in revenues and non-GAAP EPS, are forward-looking and actual results could differ materially. Among other things, Genentech's growth in revenues and non-GAAP EPS could be impacted by a number of factors, including FDA actions or delays or failure to receive FDA approval, competition, pricing, the ability to supply product, product withdrawals, new product approvals and launches, achieving sales revenue consistent with internal forecasts, unanticipated expenses such as litigation or legal settlement expenses or equity securities writedowns, costs of sales, R&D expenses, fluctuations in contract revenues and royalties, and fluctuations in tax and interest rates.
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