July 12, 2007

Genentech Kicks off Biotech Earnings

Genentech kicked off the earnings season for biotechs yesterday, posting a better than expected $0.70 per share for the second quarter on revenues of $3 billion. That was a 41% jump in profit and the company raised its full-year 2007 guidance. But, it was not good enough for investors, as fears of a growth slowdown had shares off by as much as 2.5%.
Analysts were sharply negative on Genentech following the announcement. Thomas Weisel analyst M. Ian Somaiya said that the company has a lack of near-term milestones, which "will result in Genentech trading sideways for the remainder of 2007." This is despite the opportunities the company has, especially with its leading cancer drug Avastin being tested to treat more types of cancer.
This could be a buying opportunity for investors. Or it could be dead money for next year. A coming post will focus on the intrinsic valuation for Genentech and whether or not to buy.



Interesting research on biotech stocks great.