GENENTECH REPORTS 33% INCREASE IN PRODUCT SALES FOR 2ND QTR.Genentech, Inc. (NYSE NYSE See: New York Stock Exchange :DNA DNA: see nucleic acid. DNA or deoxyribonucleic acid One of two types of nucleic acid (the other is RNA); a complex organic compound found in all living cells and many viruses. It is the chemical substance of genes. ), South San Francisco South San Francisco, city (1990 pop. 54,312), San Mateo co., W Calif.; inc. 1908. South San Francisco has several industrial parks; its manufactures include medical supplies and equipment, foods, paint, paper products, consumer goods, and clothing. , has announced a 28 percent increase in net income and a 27 percent increase in earnings per share(1) driven by a 33 percent increase in product sales for the second quarter of 2001, exclusive of the ongoing impact of the 1999 redemption of Genentech's Special Common Stock and related accounting treatment(2). For the three months ended June 30, 2001: -- Net income for the second quarter of 2001 increased 28 percent to $101.5 million, compared to $79.6 million for the second quarter of 2000, exclusive of the ongoing impact of the 1999 redemption of Genentech's Special Common Stock and related accounting treatment. -- Earnings per share for the second quarter of 2001 increased 27 percent to 19 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared to 15 cents per share for the second quarter of 2000, exclusive of the ongoing impact of the 1999 redemption of Genentech's Special Common Stock and related accounting treatment. (1)All earnings (loss) per share data and number of shares reflect the stock split effective October 2000. (2)The accounting treatment under U.S. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) requires Genentech to establish a new accounting basis for the company's assets and liabilities. This accounting treatment is the result of Roche's exercise of its option to redeem Genentech's Special Common Stock in June 1999. The company's new accounting basis is based on the cost of Roche's 1990 through 1997 purchases of Genentech shares and the redemption of Genentech's Special Common Stock on June 30, 1999. Roche's cost of acquiring Genentech was "pushed down" to Genentech and reflected on Genentech's financial statements beginning June 30, 1999. The effect of push-down accounting on Genentech's second quarter 2001 and 2000 consolidated statements of operations include recurring charges for the amortization of goodwill and other intangibles. -- Due to recurring charges related to the redemption, the company recorded second quarter net income of $38.6 million, or net income of 7 cents per share, as compared to a net loss of $12.9 million, or a net loss of 2 cents per share, in the second quarter of 2000. -- Revenues for the second quarter of 2001 increased 24 percent to $515.9 million from $415.8 million in the second quarter of 2000. This revenue growth was driven primarily by sales of Genentech's BioOncology products, Rituxan(R) (Rituximab) and Herceptin (R) (Trastuzumab) and growth hormone. Total product sales increased 33 percent in the second quarter of 2001 to $410.3 million from $309.4 million in the second quarter of 2000. "Our solid second-quarter performance reflects our ability to drive strong sales and earnings and is directly in line with our corporate strategy for growth," said Arthur D. Levinson Arthur D. Levinson (born March 31, 1950 in Seattle, Washington, United States) is President and Chief Executive Officer of Genentech. He has held these positions since July 1995, and was named chairman of the board of directors in 1999. , Ph.D., Genentech's chairman and chief executive officer. "Our oncology products, Rituxan and Herceptin, continue to generate significant sales and met our business objectives for the quarter. In May, we were able to further establish Genentech as a leader in oncology with an expanded label approval for Rituxan and numerous presentations on our oncology products at the annual meeting of the American Society of Clinical Oncology American Society of Clinical Oncology, or ASCO, is an organization that represents all clinical oncologists. Every year, ASCO holds a large symposium where physicians and researchers meet to convey and discuss research and ideas. . During the quarter we also announced initial positive results from the first of two pivotal Phase III studies of Xanelim for psoriasis. In addition, despite yesterday's announcement regarding a delay in Xolair approval, we plan to move forward with this important product." Product Sales Marketed products sales increased 33 percent in the second quarter of 2001 to $410.3 million from $309.4 million in the second quarter of 2000. Rituxan sales in the second quarter of 2001 increased 83 percent to $187.7 million from $102.8 million in the second quarter of 2000. This sales increase is due primarily to increased market penetration for the treatment of non-Hodgkin's lymphoma. Herceptin sales in the second quarter of 2001 increased 18 percent to $78.8 million compared to $66.7 million in the second quarter of 2000. Since launch, an increase in the penetration into the metastatic breast cancer market has contributed to a positive sales trend and consistent quarter-over-quarter growth in the United States. Combined sales of Genentech's two cardiovascular products, Activase(R) (Alteplase, recombinant) and TNKase(TM) (Tenecteplase), during the second quarter of 2001 decreased 9 percent to $51.6 million compared to $56.8 million in the second quarter of 2000. Growth hormone sales during the second quarter of 2001 increased 25 percent to $62.5 million compared to $49.9 million in the second quarter of 2000. Pulmozyme(R) (dornase alfa) Inhalation Solution sales decreased 13 percent to $28.1 million in the second quarter of 2001 compared to $32.3 million in the second quarter of 2000. Total Costs and Expenses Costs and expenses increased as anticipated in the second quarter of 2001 as compared to the second quarter of 2000. Research and development (R&D) expenses increased in the second quarter of 2001 to $123.5 million compared to $115.6 million in 2000. R&D expenses as a percent of revenues in the second quarter of 2001 were 24 percent, compared to approximately 28 percent in the second quarter of 2000. R&D expenses as a percent of revenues are expected to vary over the next several periods dependent on possible in-licensing agreements and as products progress through late-stage clinical trials. Primarily due to the increase in product sales, cost of sales increased to $76.2 million in the second quarter of 2001 from $66.2 million, exclusive of expenses related to the redemption and push-down accounting in the second quarter of 2000. Marketing, general and administrative (MG&A) expenses increased during the second quarter of 2001 to $107.8 million compared to $86.3 million in the second quarter of 2000. This increase was due to an increase in marketing and selling expenses in continuing support of Genentech's oncology products and legal expenses associated with patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Collaboration profit sharing expenses increased to $57.9 million in the second quarter of 2001 from $30.9 million in the second quarter of 2000. The increase was due primarily to increased Rituxan profit-sharing expense due to higher Rituxan sales. Genentech, Inc. is a leading biotechnology company that discovers, develops, manufactures, and markets human pharmaceuticals for significant unmet medical needs. Fourteen of the currently approved biotechnology products stem from or are based on Genentech science. Genentech markets nine biotechnology products directly in the United States. The company has headquarters in South San Francisco, California South San Francisco is a city in San Mateo County, California, United States, located on the San Francisco Peninsula in the San Francisco Bay Area. The population was 60,552 at the 2000 census. , and is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol DNA. Genentech Business and Product Development Events in the Second Quarter, 2001 Marketed and Pipeline Product Events BioOncology -- Rituxan(R) (Rituximab): Announced FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. approval of a new label for Rituxan to include retreatment with Rituxan after a prior course of Rituxan therapy, initial treatment doubled from four to eight weekly infusions of Rituxan, and treatment of bulky disease (tumors greater than 10 centimeters) and some significant adverse reactions for patients with low-grade non-Hodgkin's lymphoma (NHL NHL Non-Hodgkin's lymphoma, see there ). -- Tarceva(TM) (OSI-774): With partners Roche and OSI Pharmaceuticals, presented positive results from a Phase II advanced refractory ovarian cancer trial of Tarceva at the 37th annual meeting of the American Society of Clinical Oncology (ASCO ASCO American Society of Clinical Oncology ASCO Association of Schools and Colleges of Optometry (since 1941; Rockville, Maryland) ASCO Australian Standard Classification of Occupations ASCO Automatic Switch Company ) in May. Also presented findings from three Phase II trials of Tarceva demonstrating encouraging anti-cancer activity and Tarceva's potential utility as a single agent for the treatment of patients with refractory non-small cell lung cancer Lung Cancer, Non-Small Cell Definition Non-small cell lung cancer (NSCLC) is a disease in which the cells of the lung tissues grow uncontrollably and form tumors. Description There are two kinds of lung cancers, primary and secondary. (NSCLC NSCLC non (or cancer). NSCLC Non-small cell lung cancer, see there ) and head and neck cancer. The companies also initiated Phase II clinical trials in metastatic breast cancer. -- Avastin(TM) (Bevacizumab): Received fast track approval status from the FDA for Avastin, or anti-VEGF, in combination with capecitabine (Xeloda)(R) for the potential treatment of metastatic breast cancer. -- Herceptin(R) (Trastuzumab): In May at ASCO, presented data from three studies demonstrating that FISH (fluorescence in situ hybridization Fluorescence in situ hybridization (FISH) A technique for diagnosing DiGeorge syndrome before birth by analyzing cells obtained by amniocentesis with DNA probes. FISH is about 95% accurate. ) testing of tumor tissue for HER2 gene amplification appears to be an effective method for selecting women with HER2 positive metastatic breast cancer who are most likely to respond to Herceptin therapy. -- 2C4: Filed an investigational new drug application for 2C4 for the potential treatment of solid-tumor cancers. Cardiovascular Medicine -- Tracleer(TM)(Bosentan): With partner Actelion Ltd., announced positive results for oral endothelin receptor antagonist A endothelin receptor antagonist (ERA) is a drug which blocks endothelin receptors. Two main kinds of ERAs exist:
PAH abbr. para-aminohippuric acid PAH 1 Polycyclic aromatic hydrocarbon, see there 2. Pulmonary artery HTN ) study. The new data will supplement the United States and European marketing approval applications filed last year. -- Veletri(TM) (tezosentan): With partner Actelion Ltd., announced the second pivotal Phase III clinical trial Noun 1. phase III clinical trial - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the of Veletri -- an intravenous dual endothelin receptor antagonist -- did not meet its primary objective of significantly improving symptoms (dyspnea dyspnea /dysp·nea/ (disp-ne´ah) labored or difficult breathing.dyspne´ic paroxysmal nocturnal dyspnea , or shortness of breath Shortness of Breath Definition Shortness of breath, or dyspnea, is a feeling of difficult or labored breathing that is out of proportion to the patient's level of physical activity. ) associated with acute heart failure. -- Cathflow(TM) Activase(R) (Alteplase): Reported positive results of a large-scale Phase III study of safety of Cathflow Activase for treatment of occluded central venous catheters. Genentech reported positive results earlier this year of an efficacy study of Cathflow Activase, which is currently awaiting FDA approval. -- TNKase(TM) (Tenecteplase): With collaborators COR Therapeutics, Inc. and Boehringer Ingelheim, completed enrollment in the ASSENT III study of TNKase in combination with various regimens of anti-thrombotic agents for acute myocardial infarction acute myocardial infarction (  ·kyōōtˑ mī·ō·karˑ·dē· (heart attack). The companies are
on schedule to present findings at the annual meeting of the European
Society of Cardiology The European Society of Cardiology (ESC) represents more than 50,000 cardiology professionals across Europe and the Mediterranean. Its mission is to reduce the impact of cardiovascular disease in Europe. in September.
-- Anti-tissue factor: Moved anti-tissue factor into development for the potential treatment of acute coronary syndrome acute coronary syndrome n. A sudden, severe coronary event that mimics a heart attack, such as unstable angina. acute coronary syndrome . Opportunistic -- Xanelim(TM) (Efalizumab): With partner XOMA Ltd., presented initial positive results from the first of two pivotal Phase III studies of Xanelim for adults with moderate-to-severe plaque psoriasis at the Second Joint Meeting of the International Psoriasis Symposium and European Congress on Psoriasis held in San Francisco. -- Xolair(TM)(Omalizumab): With Novartis AG, announced the receipt of a Complete Response letter from the FDA for the license application for Xolair, filed on June 6, 2000. The letter requests additional preclinical and clinical data, as well as pharmacokinetic information. It is anticipated that the initial proposed label claim will likely be for adult allergic asthma. With the requirement of additional data, there will not be an FDA approval of Xolair in 2001. The exact timing of resubmission to the FDA will be dependent on the scope of the discussions with the FDA. -- Growth hormone: Reacquired from Schwarz Pharma the exclusive development and marketing rights for human growth hormone human growth hormone (HGH): see growth hormone. products Nutropin AQ(R) (somatropin, rDNA origin) and Nutropin Depot(TM) (somatropin (rDNA origin) for depot suspension) in Europe and other countries outside the United States, Canada, China, and Japan. Genentech is actively looking for potential new partners for the ex-U.S. development for these products. -- INS INS abbr. 1. Immigration and Naturalization Service 2. International News Service Noun 1. INS 365 and INS37217: Returned rights to INS365 Respiratory for chronic bronchitis and INS37217 Respiratory for cystic fibrosis and sinusitis sinusitis Inflammation of the sinuses. Acute sinusitis, usually due to infections such as the common cold, causes localized pain and tenderness, nasal obstruction and discharge, and malaise. to Inspire Pharmaceuticals, Inc. Corporate Business Events -- Defeated patent infringement lawsuit brought by GlaxoSmithKline relating to Herceptin and Rituxan and obtained jury verdict that those products do not infringe and that Glaxo's patent claims are invalid -- Successfully defended Genentech's European patent relating to immunoadhesin therapeutics against challenges filed by Biogen and Genetics institute. -- Named Thomas T. Thomas to Treasurer and David Ebersman to Senior Vice President, Product Operations. For more information, call 650/225-2742 or visit http://www.gene.com |
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