Genentech Profit Climbs 58% on Strong Sales of New Drug

Genentech Inc. on Tuesday reported quarterly profit rose a better-than-expected 58% as sales of its new drug to treat the leading cause of blindness in the elderly far exceeded predictions and demand for its cancer drugs remained strong.

Lucentis, which is quickly being adopted as a treatment option for age-related macular degeneration, had sales of $153 million, while Wall Street expected $32 million to $40 million.

But sales of its leading cancer drug, Avastin, failed to meet analyst expectations. The company’s stock, after dropping 68 cents to $85.60 in regular trading, fell to $84.40 in extended trading following the results.

Excluding items, the company earned 59 cents a share in its fiscal third quarter. Analysts on average expected 47 cents, including 4 cents a share in stock options expense, according to Reuters Estimates.

“They crushed expectations on the earnings side, even though their key product, Avastin, was a little light,” said Christopher Raymond, an analyst at Robert Baird & Co.

Genentech, which is majority-owned by Roche Holding, also said it expected growth of 65% to 70% in full-year earnings per share excluding items, up from its previous forecast of 55% to 60% growth.

The South San Francisco-based company posted a profit of $568 million, or 53 cents a share, compared with $359 million, or 33 cents, a year earlier.

Avastin saw U.S. sales rise 34% to $435 million for the quarter. Analysts expected about $459 million from the drug.