Genentech ended 2008 with a bang. Earnings leapt by 47 percent for the fourth quarter to $931 million, or 87 cents per share, on revenue growth of 25 percent. At $3.7 billion, revenues included $2.98 billion in drug sales.
Nevertheless, Wall Street greeted the news with a thud. Analysts had expected earnings of 97 cents per share, for one thing. For another, Genentech's outlook for 2009 was distressing. It will be a "difficult year to forecast," the company said, because of the economy and "business uncertainties." The Street had expected a forecast of $3.92 per share, but Genentech says it's looking for $3.55 to $3.90. That's quite a range.
The question marks ahead for Genentech include upcoming data on Avastin's utility in early colorectal cancer, plus worries about PML infections that have arisen in Raptiva patients, the Wall Street Journal points out. Of course the biggest question remains whether Roche will pull off its buyout of the 44 percent of Genentech it doesn't already own.