Monday, Apr 11, 2005
South San Francisco, Calif. -- April 11, 2005 --Genentech, Inc. (NYSE: DNA) today announced total product sales of $1,186.0 million for the first quarter of 2005, a 55 percent increase over product sales of $763.7 million in the first quarter of 2004. Operating revenues increased 50 percent from the first quarter of 2004 to $1,461.6 million. Non-GAAP earnings per share increased 53 percent to $0.29 per share from $0.19 per share in the first quarter of 2004. GAAP earnings per share increased 69 percent to $0.27 per share from $0.16 per share in the first quarter of 2004. Non-GAAP net income increased 50 percent to $311.6 million from $207.6 million in the first quarter of 2004. GAAP net income increased 61 percent to $284.2 million from $176.6 million in the first quarter of 2004.
"Genentech's persistent focus on attacking diseases where there is significant unmet medical need continues to drive the company's growth. This quarter, fueled by our four new products launched in 2003 and 2004 and continued growth of our other products, Genentech achieved record product sales and revenues. Earnings per share continued to increase, moving us toward exceeding our 5x5 EPS growth goal," said Arthur D. Levinson, Ph.D., Genentech's chairman and chief executive officer.
"With a strong start for 2005, we are updating our expectations for 2005 growth," said David Ebersman, senior vice president and chief financial officer. "We are currently expecting year-over-year non-GAAP EPS growth of greater than 30 percent for 2005."
Note: Genentech's non-GAAP net income and non-GAAP earnings per share exclude recurring charges related to the 1999 Roche redemption of Genentech's stock, and litigation-related special items. The differences in non-GAAP and GAAP numbers are reconciled in the tables below and on www.gene.com. All share and per share amounts reflect the May 2004 two-for-one split of Genentech common stock.
"Avastin, with net U.S. sales of $675.9 million in the first full 12 months following its launch, is the most successful oncology product launch in the United States to date. Avastin remains the first and only anti-angiogenic drug that has shown a survival benefit in both first-line and second-line metastatic colorectal cancer," said Ian T. Clark, senior vice president and general manager, BioOncology. "We are pleased that all four of our oncology products have demonstrated a survival benefit in clinical trials."
For the three months ended March 31, 2005:
Royalties and Contract Revenues
Total Costs and Expenses
"We are encouraged by the expansion of our current broad-based Avastin clinical trial program, and are pleased to announce plans to initiate an Avastin Phase III trial in prostate cancer, which will be the sixth solid tumor in our Avastin clinical development program," said Susan D. Hellmann, M.D., M.P.H., president of Product Development.
Genentech announced that it completed enrollment in the Lucentis Phase IIIb PIER trial and began enrollment in the Avastin Phase II refractory ovarian cancer study and the BR3-FC Phase I study for patients with rheumatoid arthritis. It also filed an Investigational New Drug (IND) application with the U.S. Food and Drug Administration to initiate human clinical investigation of a drug candidate for the topical treatment of basal cell carcinoma. This drug candidate, an antagonist of the Hedgehog signaling pathway, was discovered by Curis and is being co-developed through a collaboration between Genentech and Curis.
Genentech added four projects to the development pipeline in the first quarter of 2005, including an Avastin Phase III trial in prostate cancer, a Tarceva Phase III trial in adjuvant non-small cell lung cancer (NSCLC), a RAPTIVA Phase II trial in adult atopic dermatitis, and an undisclosed new molecular entity in oncology. The RAPTIVA Phase III every-other-week dosing project was removed from the development pipeline.
Genentech will be offering a live webcast of a discussion by Genentech management of the earnings and other business results on Monday, April 11, 2005, at 2:15 p.m. Pacific Time (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 5:00 p.m. PT on April 25, 2005. An audio replay of the webcast will be available beginning at 5:15 p.m. PT on April 11, 2005 through 5:15 p.m. PT on April 18, 2005 . Access numbers for this replay are: 1-800-642-1687 (U.S./Canada) and 1-706-645-9291 (international); conference ID number is 4881274.
Genentech is a leading biotechnology company that discovers, develops, manufactures and commercializes biotherapeutics for significant unmet medical needs. A considerable number of the currently approved biotechnology products originated from or are based on Genentech science. Genentech manufactures and commercializes multiple biotechnology products directly in the United States and licenses several additional products to other companies. 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 Business and Product Development Events Since the Last Quarterly Release
MARKETED AND PIPELINE PRODUCT EVENTS
In January 2005, Genentech, OSI Pharmaceuticals, Inc. (Nasdaq: OSIP) and Roche (SWX Zurich) announced results of a randomized Phase III clinical study of Tarceva plus gemcitabine chemotherapy in patients with locally advanced or metastatic pancreatic cancer. The trial met its primary endpoint of improvement in overall survival when compared to patients receiving gemcitabine plus placebo. Results of the study were presented at the Second Annual Gastrointestinal Cancers Symposium of the American Society of Clinical Oncology (ASCO).
Also in January 2005, Genentech announced results of a randomized Phase III study (E3200) of Avastin plus the FOLFOX4 chemotherapy regimen (oxaliplatin/5-FU/leucovorin), compared to FOLFOX4 alone in second-line metastatic colorectal cancer patients. The trial achieved its primary endpoint of improving overall survival. Results from a preliminary analysis of the 3200 study demonstrated that patients receiving Avastin plus FOLFOX4 had a reduction in the risk of death compared to patients who received FOLFOX4 alone. Results of the study were presented at the Second Annual Gastrointestinal Cancers Symposium of ASCO.
In March 2005, Genentech and Roche announced that in an interim analysis of a Phase III study comparing Avastin plus paclitaxel and carboplatin chemotherapies to chemotherapy alone in first-line non-squamous NSCLC, the primary efficacy endpoint of improving overall survival was met. Data from this study have been submitted to ASCO's annual meeting, May 13-17, 2005.
Immunology and Specialty Biotherapeutics
On February 18, 2005, Genentech presented final results from a long-term study that showed sustained improvement in psoriasis symptoms throughout three years of continuous treatment with RAPTIVA.
In March 2005, Genentech and Ipsen announced the recent execution of a collaborative research and development agreement to develop sustained-release formulations of Genentech's recombinant human growth hormone [somatropin (rDNA origin)].
On April 5, 2005, Genentech, Biogen Idec (Nasdaq: BIIB) and Roche announced that a Phase III clinical study of Rituxan for rheumatoid arthritis, known as REFLEX, met its primary endpoint of symptom reduction (ACR 20) compared to placebo and methotrexate (MTX). Further analyses of the data are ongoing and will be submitted for presentation at an upcoming medical meeting.
Genentech presented an overview of its strategy and financial goals for 2005 and beyond at its investment community meeting in New York on March 4, 2005. The company also discussed upcoming milestones for 2005 in preparation for potential product and line extension launches.
The statements in this press release relating to continued growth, including expected 2005 non-GAAP earnings per share (EPS) growth, and the achievement of our 5x5 EPS growth goal are forward-looking and actual results could differ materially. Among other things, continued growth, including 2005 non-GAAP EPS growth and achieving our 5x5 EPS growth goal, could be affected by a number of factors, including product safety, efficacy or manufacturing issues, FDA actions or delays or failure to receive FDA approval, competition, pricing, reimbursement, the ability to supply product, product withdrawals, new product approvals and launches and achieving sales revenue consistent with internal forecasts, unanticipated expenses such as litigation or legal settlement expenses or equity securities write-downs, costs of sales, R&D expenses, fluctuations in contract revenues and royalties, and fluctuations in tax and interest rates. Genentech disclaims any obligation, and does not undertake, to update or revise any forward-looking statements in this press release.