Tuesday, Jul 11, 2006
South San Francisco, Calif. -- July 11, 2006 --Genentech, Inc. (NYSE: DNA) today announced financial results for the second quarter of 2006. Revenue results for the second quarter of 2006 include:
Key operating results for the second quarter of 2006 include:
A reconciliation2 between non-GAAP and GAAP earnings per share for the second quarters of 2006 and 2005 is provided in the following table:
|Non-GAAP Diluted EPS||Employee Stock Compensation Expense||Roche Redemption and Special Items||Reported GAAP Diluted EPS|
"Genentech has reached its half-year mark with another set of excellent results. Our year-to-date operating revenues exceeded $4 billion, and our EPS in the first six months of 2006 surpassed our full-year EPS in 2004, just two years ago," said Arthur D. Levinson, Ph.D., Genentech's chairman and chief executive officer. "We are pleased to have completed four sBLA submissions and received four FDA approvals for new products or indications so far this year, expanding our portfolio into new disease areas for Genentech. Our latest approved product, Lucentis for wet age-related macular degeneration, is an important medical development in the treatment of vision loss, having maintained the vision of almost all clinical trial patients and improved the vision of 40 percent of all clinical trial patients by three lines on the study eye chart."
The company provided updated expectations of approximately 55 to 60 percent growth in non-GAAP earnings per share for the full year 2006, relative to 20052.
For the three months ended June 30, 2006:
Royalties and Contract Revenues
Expenses and Other
Genentech's unrestricted cash and investments portfolio totaled approximately $4 billion as of June 30, 2006.
Genentech announced that the supplemental Biologics License Application (sBLA) it submitted for Avastin in combination with taxane chemotherapy for patients with first-line metastatic breast cancer was granted priority review by the U.S. Food and Drug Administration (FDA). Since the study was not based on overall survival but utilized a progression-free survival endpoint, the FDA has requested more documentation, which may extend the review and potential approval beyond the November 22 FDA action date.
The company also announced that in the second quarter of 2006 it began enrollment in several key studies in its early development program, including a Phase I study of Trastuzumab-DM1 in HER2-positive metastatic breast cancer; a Phase Ib study of Apo2L/TRAIL in oncology; a Phase Ib study of BR3 in rheumatoid arthritis; a Phase II study of Rituxan in rheumatoid arthritis in combination with methotrexate and Enbrel; and a Phase II topical VEGF diabetic wound healing study.
Genentech made a ¿go¿ decision for a Phase III study of its second-generation humanized anti-CD20 molecule (ocrelizumab) in rheumatoid arthritis. Genentech also filed an Investigational New Drug (IND) application with the FDA for this molecule relating to neuromyelitis optica (NMO). Biogen Idec, Inc. disagrees that Genentech has the ability to develop this humanized anti-CD20 molecule for NMO or rheumatoid arthritis without its agreement, and the parties are seeking to resolve their differences relating to that disagreement.
Genentech will be offering a live webcast of a discussion by Genentech management of the earnings and other business results on Tuesday, July 11, 2006, 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 be available via the website until 5:00 p.m. PT on July 25, 2006. A telephonic audio replay of the webcast will be available beginning at 5:15 p.m. PT on July 11, 2006 through 5:15 p.m. PT on July 18, 2006. Access numbers for this replay are: 1-800-642-1687 (U.S./Canada) and 1-706-645-9291 (international); conference ID number is 1795193.
Founded 30 years ago, 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 and licenses several additional products to other companies. The company has headquarters in South San Francisco, California and is listed on the New York Stock Exchange under the symbol DNA. For additional information about the company, please visit http://www.gene.com.
About Genentech's Commitment to Patient Access:
Genentech is committed to eligible patients having access to our therapies. For those eligible patients treated for approved indications in the United States who do not have insurance or who cannot afford their out-of-pocket co-pay costs, Genentech has several support programs. Since 1990, Genentech has donated $700 million of free product to uninsured patients and those deemed uninsured due to payor denial through its Genentech® Access to Care Foundation (GATCF) and the Genentech Endowment for Cystic Fibrosis. In 2005 alone, GATCF supported over 18,000 patients by providing approximately $200 million of free product. Since 2005, Genentech has donated more than $25 million to various independent public charities that provide financial assistance to eligible patients who cannot access needed medical treatment due to co-pay costs. Through its Single Point of Contact (SPOC) program, Genentech provides patients with assistance and information on a broad array of reimbursement services and support.
For information on Genentech's latest business and product development events please refer to http://www.gene.com/gene/news/press-releases/index.jsp
This press release contains a forward-looking statement regarding growth in non-GAAP earnings per share (EPS) for 2006. Such a statement is a prediction and involves risks and uncertainties such that actual results may differ materially. Among other things, growth in non-GAAP EPS could be affected by a number of factors, including unexpected safety, efficacy or manufacturing issues, additional time requirements for data analysis, BLA preparation and decision making, need for additional clinical trials, FDA actions or delays, failure to obtain FDA approval, competition, pricing, reimbursement, intellectual property or contract rights, the ability to supply product, product withdrawals, new product approvals and launches, achieving sales revenue consistent with internal forecasts, costs of sales, unanticipated expenses such as litigation or legal settlement expenses or equity securities writedowns, R&D or MG&A expenses, stock-based compensation expense, fluctuations in contract revenues and royalties, and fluctuations in tax and interest rates. Please also refer to Genentech's periodic reports filed with the Securities and Exchange Commission. Genentech disclaims, and does not undertake, any obligation to update or revise any forward-looking statement in this press release.
1 The company adopted Statement of Financial Accounting Standards No. 123R (or FAS 123R) on a modified prospective basis beginning January 1, 2006, and, therefore, no employee stock-based compensation expense has been recognized in GAAP-reported amounts in any prior period. Based on the pro forma application of FAS 123 for the calculation of employee stock-based compensation expense prior to January 1, 2006 (as previously disclosed in Genentech's financial statement footnotes), pro forma employee stock-based compensation expense in the second quarter of 2005 was $41 million, net of tax, (or $0.04 per diluted share), and the resulting pro forma GAAP net income was $255 million (or $0.23 per diluted share).
2 Genentech's non-GAAP net income and non-GAAP earnings per share exclude the after-tax impact of recurring charges related to the 1999 redemption of Genentech's stock by Roche Holdings, Inc., litigation-related special items, and employee stock-based compensation expense associated with Genentech's adoption of FAS 123R on January 1, 2006. The differences in non-GAAP and GAAP numbers are reconciled in the accompanying tables and on http://www.gene.com.