Genentech (DNA) estimates $0.56 EPS and $2.55 Billion revenues.
Without getting into individual details, it seems many analysts on the street tend to get hung up on various drug sales each and every quarter. We’ll wait for the actual numbers before looking for any major break-out, but the company has incredible growth prospects and it is just so much easier to remain bullish on DNA rather than being pessimistic.
The stock has been dead money for 18 months and any attempts to sell it have been met with buying, so it’s easy to have along bias on the stock. Now we just have to make sure the recent Supreme Court ruling wont kill it and that fresh legislation from Congress won’t target its operations too much. You can also usually assume that even though Cramer has been mixed on drugs and biotechs, he has been a lover of Genentech and will likely be defending it many nights after it reports. The share prices are really not that different from last quarter if you think of the market strength.
Genetech had a very recent blow with a Supreme Court ruling that allows Medimuune to sue for patent infringement even though it is paying royalties. What wasn’t in numbers last quarter were two new lymphoma treatments for Rituxan, a lung cancer treatment indication for Avastin, and a November approval of Herceptin in a combo treatment with chemo for breast cancer patients. The company is also buying Tanox (TNOX) as of Q4 and that was included in prior numbers.
Whenever I have spoken with brokers or funds, this is one that the buy-side feels is still under-owned because the $89 Billion market cap is misleading due to the majority stake controlled by Roche.
The corporate fact sheet is found here.
Jon C. Ogg
January 10, 2007
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