Genentech Masks a Whiff (DNA)

Genentech Inc. (NYSE: DNA) is initially looking like a severe disappointment to those who thought Cramer’s call last week was the right one.  The largest biotech in the U.S. posted $0.82 EPS on $3.23 Billion in revenues.  The company has also tightened its full-year 2008 non-GAAP earnings forecast to a range of $3.40 to $3.50 per share, revised from $3.35 to $3.45 per share.

First Call had estimates at $0.86 EPS on $3.23 Billion in revenues.  For fiscal 2008, estimates are $3.43 EPS on $13.03 Billion in revenues.

The company did have disappointing drug sales as well:
Drug            2008    2007   Change
Rituxan®     $651     $582      12%
Avastin®+    $650     $564      15%
Herceptin®   $338     $329      3%
Lucentis®     $216     $209      3%
Xolair®          $129     $120      8%
Tarceva®       $119     $102      17%

So far traders do not like this report, but the better news perhaps is that this slightly raised guidance is being treated well.  Shares closed down 3% at $75.39.  The initial reaction put shares down some 4% but they have recovered back to $75.40.

Jon C. Ogg
July 14, 2008