Company Analysis - Genentech
Genentech's big-hitting blockbusters
Towards the end of 2006, it appeared that lower than anticipated sales of Herceptin and Rituxan might affect the company's overall performance. However, Genentech's robust strategy for portfolio management rode to the rescue. Firstly, the former drug was additionally approved as an adjunct breast cancer therapy, increasing its sales by 65%, and establishing this drug as a blockbuster anticancer for the first time. Secondly, Rituxan was approved for two additional indications leading to an astonishing 165% increase in its sales. Finally, Avastin (bevacizumab), another blockbuster, was additionally approved as a 1st line treatment for nsclc, yielding a 36% sales increase. Genentech's year-end sales thus totalled US $7.6 billion, its oncology portfolio being the main driving force. The resulting per-share profit increase of 74%, which beat analysts' projections of 62%, underlines the importance of continuing to develop launched drugs for further indications [Table 1], as well as developing the early-stage end of a pipeline.
