Tuesday, February 15, 2005

U.S. PRESCRIPTION DRUG SALES INCREASED 8.3 PERCENT IN 2004, LOWEST GROWTH RATE IN 10 YEARS

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Prescription drug sales in the United States increased 8.3 percent to $235.4 billion in 2004, up from $217.3 billion in 2003, representing the lowest rate of growth since 1995, according to a report released by IMS Health. Last year marked the first year of single-digit growth in almost a decade.

According to IMS Health, several factors contributed to the lower growth, including a mild flu season, increased over-the-counter use of anti-ulcerants and antihistamines, continued competition from generics, lower prescription volumes resulting in part from increased insurance copayments and safety concerns over antidepressants and COX-2 inhibitors.

Biotech brands continued to do well in 2004, with sales increasing by 17 percent. Leading sales in this category were two new colorectal cancer drugs, Bristol-Myers Squibb Co. and ImClone Systems Inc.'s Erbitux (cetuximab) and Genentech Inc.'s Avastin (bevacizumab).

Although generic sales grew by 10 percent, this figure represents a dramatic decline from previous years when growth in this category topped 26 percent, according to Ana-Maria Zaugg, IMS' corporate vice president.

Merck & Co. Inc.'s voluntary withdrawal of Vioxx (rofecoxib), a COX-2 inhibitor, increased patient use of other COX-2 inhibitors by 25 percent.

However, growing concern associated with COX-2 inhibitors caused usage of the drugs to fall below pre-Vioxx withdrawal levels. Lisa Morris, global director of IMS longitudinal services, said prescriptions for COX-2 inhibitors and nonsteroidal anti-inflammatory drugs (NSAIDs) declined 9 percent by year-end.

The report found that Medicare and drug importation had a limited effect on the overall market. Medicare discount drug cards, which were launched in June, accounted for only 1.2 percent of retail prescriptions and 5.1 percent of senior retail prescriptions. Drug imports from Canada increased by only 9.7 percent, accounting for sales of less than 1 percent of overall U.S. pharmaceutical revenue.

Several products introduced in 2004 have the potential to become blockbusters, according to IMS. These include Eli Lilly and Co.'s Cymbalta (duloxetine hydrochloride), indicated for the treatment of depression; Avastin; Forest Laboratories Inc.'s Namenda (memantine hydrochloride), indicated for the treatment of Alzheimer's disease; Erbitux; and Merck/Schering Plough Corp.'s Vytorin (ezetimibe/simvastatin), indicated for cholesterol reduction.

For 2005, IMS predicts a steady growth rate of 7.5 to 8.5 percent for the U.S. pharmaceutical industry. It said this growth will be sustained by new product innovation, the aging U.S. population and a list of potential blockbusters.

Friday, January 7, 2005

GENENTECH UPDATES AVASTIN PRODUCT LABEL TO REFLECT INCREASED RISK OF ARTERIAL THROMBOEMBOLIC EVENTS

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The Food and Drug Administration approved an updated label for Genentech Inc.'s colorectal cancer drug Avastin (bevacizumab) to reflect an increased risk of arterial thromboembolic events (ATE) when used in combination with chemotherapy.

This update follows a letter the company sent to health care providers in August 2004 warning of this increased risk based on clinical trials showing that of 1,745 patients in the trials, ATEs occurred in 4.4 percent of the patients treated with the biotechnology brand name drug Avastin and chemotherapy, versus 1.9 percent of patients who received chemotherapy alone. According to the company, some of these ATEs were fatal.

The label defines ATEs as stroke, transient ischemic attacks, heart attack, angina and other arterial thromboembolic events.

"We believe it's important to view the potential risk of these events in context with Avastin's ability to improve overall survival in patients with metastatic colorectal cancer, a disease with a life expectancy of less than two years," said Dr. Hal Barron, Genentech's chief medical officer, in a prepared statement.

The biotechnology brand name drug Avastin, a therapeutic antibody designed to inhibit vascular endothelial growth factor, was approved in February 2004 for use in combination with intravenous 5-fluorouracil-based chemotherapy as a treatment for patients with first-line metastatic colorectal cancer.

Wednesday, December 1, 2004

AVASTIN PLUS ELOXATIN-BASED REGIMEN MORE EFFECTIVE THAN ELOXATIN REGIMEN ALONE IN SECOND-LINE TREATMENT OF METASTATIC COLORECTAL CANCER, STUDY SHOWS

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Adding Genentech Inc. and Roche Holding AG's Avastin (bevacizumab) to the FOLFOX4 chemotherapy regimen increased median survival by 17 percent in a recent trial of patients undergoing second-line therapy for metastatic colorectal cancer, according to a Genentech press release.

The Phase III study included 829 patients with advanced colorectal cancer who had previously received a fluorouracil-based chemotherapy regimen and Pfizer Inc.'s Camptostar (irinotecan). The subjects were randomly assigned to receive Avastin alone, FOLFOX4 alone or Avastin plus FOLFOX4. FOLFOX4 includes fluorouracil, leucovorin calcium and sanofi-aventis Group's Eloxatin (oxaliplatin).

Randomization to the Avastin monotherapy arm was suspended in March 2003 after a review by the study's data monitoring committee suggested overall survival in that group may be lower than that in the other two groups.

An interim analysis reported this week shows median survival in the Avastin-plus-FOLFOX4 group is 12.5 months compared with 10.7 months in the group receiving FOLFOX4 alone. Additionally, at the time of the analysis, 26 percent fewer patients treated with Avastin in addition to FOLFOX4 had died compared to those treated with FOLFOX4 alone.

Genentech added that a preliminary safety analysis suggests Avastin can be safely combined with FOLFOX4, and adverse events in this study have been consistent with those seen in other clinical trials of Avastin plus chemotherapy.

The preliminary results will be presented in greater detail during the American Society of Clinical Oncology's Gastrointestinal Cancers Symposium, which will be held Jan. 27 through Jan. 29 in Hollywood, Fla.

The biotechnology brand name drug Avastin, a vascular endothelial growth factor (VEGF) inhibitor, received Food and Drug Administration approval in February for use as a first-line treatment for metastatic colorectal cancer in combination with intravenous 5-fluorouracil. Genentech markets Avastin in the United States, while Roche holds rights to the drug in other countries.

Eloxatin was approved in January for the first-line treatment of metastatic colorectal cancer in combination with 5-fluorouracil and leucovorin; the same combination was approved in August 2002 for use in the second-line.

Eloxatin was developed in collaboration with Debiopharm SA and is marketed by sanofi-aventis.

Friday, November 5, 2004

VERISPAN BIENNIAL REPORT HIGHLIGHTS EFFECTIVENESS OF PHARMACEUTICAL SALES FORCES

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Verispan released its biennial Sales Force Effectiveness report for 2004, which is compiled by physicians in 16 specialties who rank, unaided, the most effective pharmaceutical branding sales forces in nine different types of sales rep activities.

Data from the report showed that Abbott Laboratories and Genentech Inc. were able to retain their top 10 positions from 2002, but improved significantly since the last report.

In 2002, Abbott achieved top 10 recognition in "traditional" detailing, samples, detail-related product literature and gifts/giveaways. The 2004 report placed Abbott in the top 10 in all nine areas of activity included in the survey. Moreover, the firm improved its rankings in the four categories in which it finished in the top 10 two years ago.

Regarding Genentech, surveyed oncologists placed Genentech in the top 10 in all nine areas of sales rep activity. The company jumped from fifth to first in disease-state management programs, while the firm's Internet-based activities and e-detailing/online events ranked second in the industry behind sanofi-aventis.

The 2004 data showed Genentech moved from eighth to second in meeting and events, attributed to the firm's promotion of the colorectal cancer therapy Avastin (bevacizumab), according to Verispan's Promotional Audits. The therapy represented 38 percent of Genentech's expenditures for oncologists in the first nine months of 2004.

Internet-based initiative rankings shifted significantly since the 2002 report. Pfizer Inc. was recognized as the most effective sales force in this tactic in 2004 after finishing third to Merck & Co. Inc. and Aventis SA two years ago. This year, Merck slid to second while sanofi-aventis placed sixth. AstraZeneca Plc climbed from sixth in 2004 to third this year in this category.

Overall, 23 percent of physicians surveyed said their interaction with sales reps had increased or greatly increased in the past two years. In 2002, 27 percent of physicians responded similarly. In addition, 63 percent of surveyed physicians felt rep-arranged meetings and events were more effective than traditional detail.

Thursday, October 7, 2004

GENENTECH POSTS HIGHER SALES, NET INCOME FOR THIRD QUARTER, INCREASES GUIDANCE

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Genentech Inc. increased its 2004 non-Generally Accepted Principles earnings guidance after posting a more than 50 percent increase in both product sales and net income in the third quarter of 2004 compared with last year.

The company now expects earnings per share to be in the range of $0.80 and $0.83, up from the previously estimated range of between $0.75 and $0.80.

This past quarter, product sales reached $1 billion for the first time in the firm's history, representing a 54 percent rise from $654.9 million in product sales one year ago. Operating revenue climbed 47 percent to $1.2 billion.

Colorectal cancer drug Avastin (bevacizumab) and non-Hodgkin's lymphoma drug Rituxan (rituximab) lead sales, achieving $183 million and $437.7 million, respectively. Sales of breast cancer drug Herceptin (trastuzumab) increased 17 percent to $126 million while sales of asthma therapy Xolair (omalizumab) rose from $6.8 million a year ago to $53.9 million this past quarter.

Excluding recurring charges related to a previous Roche redemption of Genentech's stock, special litigation items and the 2003 change in accounting principle, net income increased 80 percent to $259.6 million, or 71 percent to $0.24 per share. GAAP net income rose 52 percent from $152 million in last year's third quarter to $230.9 million; GAAP earnings per share increased 50 percent from $0.14 to $0.21.

Earlier this week, Genentech said it had received a subpoena from the assistant U.S. Attorney's Office for the Eastern District of Pennsylvania requesting documents related to the promotion of Rituxan. The firm said it is cooperating with the investigation. Shares of Genentech closed at $50.52, down $0.88, or 1.7 percent in heavy trading on the New York Stock Exchange.

Monday, August 16, 2004

GENENTECH, FDA WARN PHYSICIANS ON INCREASED RISK OF STROKE, HEART ATTACK ASSOCIATED WITH AVASTIN USE

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Genentech Inc. and the Food and Drug Administration issued a warning letter to physicians regarding an increased risk of serious arterial thromboembolic

events, including stroke, myocardial infarction, transient ischemic attack and angina, associated with use of the colorectal cancer therapy Avastin (bevacizumab).

In the letter, the organizations said patients who experience an arterial thromboembolic event during treatment with Avastin should permanently discontinue its use.

They highlighted data from randomized, active-controlled trials among patients receiving the drug for metastatic colorectal cancer treatment.

Results showed that the risk of experiencing a serious thromboembolic event was approximately two-fold greater in patients administered infusional 5-fluorouracil-based chemotherapy plus Avastin.

Furthermore, Genentech and the FDA identified age 65 years or older and a history of arterial thromboembolism prior to Avastin exposure as risk factors for the development of thromboembolic events.

A revised Avastin package insert is currently being developed to provide more detailed information on arterial thromboembolic events.

Shares of Genentech closed at $44.23, down $2.88, or 6.1 percent, in heavy trading on the New York Stock Exchange.

Friday, July 9, 2004

INCREASE IN PRODUCT SALES DRIVES GENENTECH'S Q2 REVENUE

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Genentech Inc. recognized a 42 percent increase in overall product sales during the second quarter of 2004, driving the company to record quarterly

revenue of nearly $1.13 billion.

For the three months ended June 30, operating revenue increased 41 percent from $799.7 million in the second quarter of 2003. Total product sales reached $913.4 million, up $644.3 million from the comparable period of last year.

Net income on a non-Generally Accepted Accounting Principles (GAAP) basis totaled $201.8 million, a 23 percent increase from $163.5 million in the prior-year quarter. GAAP net income jumped 29 percent to $170.8 million during the second quarter of 2004.

Furthermore, Genentech recognized non-GAAP earnings of $0.19 per share compared with $0.16 per share in 2003, representing a 19 percent gain. GAAP earnings per share were $0.16 compared with $0.13 in the comparable period last year.

The company generated $133 million in sales of its colorectal cancer therapy Avastin (bevacizumab) during the quarter, the product's first full quarter on the market. Analysts had expected sales to range between $85 million and $115 million, according to a report from Web site TheStreet.com.

Additionally, sales of the non-Hodgkin's lymphoma therapy Rituxan (rituximab), which Genentech co-promotes with Biogen Idec, increased 17 percent to $424.7 million in the second quarter of 2004.

"Based on our current view of the business, we have now raised our goal for 2004 non-GAAP [earnings per share] to be in the range of $0.75 to $0.80," noted Louis Lavigne, Jr., executive vice president and chief financial officer of Genentech.

Genentech shares closed at $52.00, down $1.90, or 3.5 percent, in heavy trading on the Nasdaq.

Thursday, April 8, 2004

GENENTECH REPORTS INCREASE IN Q1 REVENUE, EARNINGS AIDED BY STRONG SALES OF ITS ONCOLOGY THERAPIES

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Genentech Inc. reported gains in revenue and earnings in the first quarter of 2004, driven by the strong performance of its key oncology therapies.

For the period ended March 31, the company achieved operating revenue of $975.1 million, up 30 percent from $749.7 million in the first quarter of 2003. Revenue growth was specifically attributed to sales of the firm's non-Hodgkin lymphoma drug Rituxan (rituximab), its breast cancer treatment

Herceptin (trastuzumab) and its colon cancer therapy Avastin (bevacizumab).

Net income on a non-Generally Accepted Accounting Principles basis climbed 14 percent to $207.6 million, up from $182.6 million in last year's first quarter. Non-GAAP earnings per share increased 9 percent to $0.38 compared with $0.35 in the comparable period of last year.

On a GAAP basis, Genentech's net income reached $176.6 million, nearly a 17 percent jump from $151.5 million in the first quarter of 2003. GAAP earnings per share totaled $0.33 compared with $0.29 in the prior-year period.

Furthermore, overall product sales during the period totaled $763.7 million, a 28 percent increase from $598.5 million in the first quarter of 2003.

"With the strong performance of the biotechnology brand name drug Avastin, we now feel that for 2004 a non-GAAP earnings per share increase in the range of 20 to 25 percent year-over-year is possible," noted Louis Lavigne, Jr., Genentech's executive vice president and chief financial officer.

Genentech's earnings report was issued after the close of trading on the New

York Stock Exchange Wednesday.

Monday, August 18, 2003

PROTEIN DESIGN, GENENTECH DISPUTE XOLAIR PATENTS; PROTEIN DESIGN SHARES FALL

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Shares of Protein Design Labs Inc. fell nearly 25.2 percent after the company reported on the status of its dispute with Genentech Inc. regarding the potential licensing of Genentech's humanized antibody pharmaceutical brand Xolair (omalizumab), a treatment for allergic asthma.

Genentech has reportedly provided Protein Design with the sequence of amino acids for Xolair and informed the company that it believes Xolair is not covered by Protein Design's humanization patents. After reviewing the sequence, however, Protein Design said it believes that Xolair is covered under its antibody humanization patents.

The dispute also raised concerns among investors that Protein Design could be unsuccessful in reaching licensing agreements for Genentech's breast cancer therapy Avastin (bevacizumab) and its psoriasis drug Raptiva (efalizumab), Dow Jones reported. "I think the way the stock is acting today, people are assuming there could be issues getting these royalties," said Felicia Reed, an Adams, Harkness & Hill analyst, according to Dow Jones. "The way they get to profitability is by obtaining royalties on these products. Without the royalties, profitability will get pushed back," she added.

Shares of Protein Design closed at $10.85, down $3.65, in heavy Nasdaq trading.

Monday, August 4, 2003

GENENTECH'S AVASTIN MAY PROLONG TIME TO PROGRESSION IN RENAL-CELL CANCER

PATIENTS, STUDY FINDS

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Genentech Inc.'s Avastin (bevacizumab), an antibody against vascular endothelial growth factor, is effective in prolonging the time to progression of disease in patients with metastatic renal-cell cancer, according to a new study.

In the Phase II study, researchers randomized 116 patients to receive Avastin 3 mg per kilogram of body weight, Avastin 10 mg per kg or placebo.

Results showed that patients administered high-dose Avastin displayed a significantly higher prolongation of the time to progression of disease as compared with patients who received placebo. There was a "borderline" significant difference in time to disease progression between the low-dose

Avastin group and the placebo group.

Furthermore, the probability of being progression-free at four months was 64 percent, 39 percent and 20 percent for patients who were administered high-dose Avastin, low-dose Avastin and placebo, respectively. At eight months, the probabilities were 30 percent, 14 percent and 5 percent, respectively.

The researchers concluded that in the future "antiangiogenic therapy will require a rational combination of inhibitors, directed by a better understanding of the biology of each individual type of cancer."

Results of the trial appear in the July 31 issue of The New England Journal of Medicine.

Wednesday, July 9, 2003

IN BRIEF: ROCHE HOLDING AG

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Roche Holding AG acquired the marketing rights to Genentech Inc.'s colorectal cancer drug Avastin (bevacizumab) for all countries outside the United States. Recent Phase III studies showed that the biotechnology brand name drug Avastin, in combination with standard care chemotherapy, improved overall survival in metastatic colon cancer patients. The positive results followed a failed trial to treat patients with breast cancer.

Monday, June 30, 2003

GENENTECH'S EXPERIMENTAL CANCER THERAPY GETS EXPEDITED FDA REVIEW

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The Food and Drug Administration designated Genentech Inc.'s Avastin (bevacizumab) with fast-track status for the treatment of previously untreated first-line metastatic colorectal cancer patients.

Under this designation, Genentech can submit a marketing application in sections to facilitate the FDA review, instead of waiting to have all the data before beginning the process. Fast-track status is intended to provide an expedited regulatory review for potential new therapies for life-threatening diseases.

The biotechnology brand name drug Avastin is designed to inhibit vascular endothelial growth factor, a protein that aids in the formation of new blood vessels to a tumor and maintains existing tumor blood vessels.

The Calif.-based firm previously presented positive data on the use of Avastin in combination with standard-of-care chemotherapy.

Genentech shares closed at $73.60, up $0.85, or 1.2 percent, in moderate trading on the New York Stock Exchange.

Tuesday, June 3, 2003

GENENTECH'S AVASTIN IMPROVES SURVIVAL IN COLORECTAL CANCER PATIENTS, STUDY SHOWS

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Genentech Inc. announced that a Phase III study of its colorectal cancer drug Avastin (bevacizumab) did better than expected in meeting its primary endpoint of improving overall survival.

In the Phase III study, 800 previously untreated metastatic colorectal cancer patients were randomized to receive either Avastin plus the standard of care chemotherapy (5-FU/Leucovorin/CPT-11, called IFL) or the IFL regimen plus an Avastin placebo.

Patients who received the biotechnology brand name drug Avastin combined with chemotherapy had a 50 percent increase in their chance for survival compared with those who received chemotherapy alone. Researchers said the data indicate a stronger patient benefit than anticipated, as the study was intended to identify a 33 percent increase in the chance for survival.

Data from the Phase III study were presented in Chicago at the annual American Society of Clinical Oncology meeting.

Genentech is currently in discussions with the Food and Drug Administration about plans for filing a Biologics License Application. Shares of Genentech closed at $66.73, up $4.12, or 6.6 percent, in heavy trading on the New York Stock Exchange.