Following a solid earnings report from Genentech
For the third quarter, the company reported that earnings, excluding special items, increased 20% to $143.9 million, and 17% to $0.27 on a per-share basis. GAAP earnings -- reflecting a patent settlement payment from Amgen
Operating revenues increased 26% to $817 million, driven by a pair of cancer drugs. Sales of Rituxan for non-Hodgkin's lymphoma gained 26% to $371.7 million, while Herceptin -- Genentech's breast cancer drug -- increased 11% to $107.7 million. While Herceptin's result was better than expected, Rituxan fell slightly short of estimates.
During the quarter, Genentech also introduced Xolair. The asthma drug has brought in $6.8 million since its July launch.
But while the results look pretty, investors are still mostly looking ahead to drugs not yet on the market. The stock got a pop in May, doubling after Avastin showed efficacy. The company is hopeful that the potential blockbuster angiogenesis drug will be approved by the end of March.
In addition, Genentech expects Raptiva -- a psoriasis drug co-developed with Xoma
Tarceva also has FDA orphan drug status for glioblastoma, which is in Phase 2 testing.
So while earnings were strong, Genentech still carries a lofty valuation by most any measure. However, the company has a pipeline stuffed with near-term promise, and fruition may justify that promise.
Jeff Hwang can be reached at JHwang@fool.com.