EARNINGS PREVIEW: Biotech Firms' 4Q EPS Seen Up Amid Chaos
January 09 2009 - 4:03PM
Dow Jones News
TAKING THE PULSE: The biotech sector is in turmoil, as the
credit crisis makes it harder to raise cash needed for
drug-development. As such, some smaller companies are being eyed as
possible acquisition targets by major drug maker seeking new drugs
with near-term revenue potential. Dutch vaccine maker Crucell
(CRXL) is in acquisition talks with Wyeth (WYE), on the heels of
Johnson & Johnson's purchase of Omrix Biopharmaceuticals Inc.
and Eli Lilly & Co.'s (LLY) acquisition of ImClone Systems Inc.
(IMCL).
The latest quarter is expected to see the major biotechs report
generally higher earnings and revenue - thanks to high prices and
shelter from generic competition. But the stronger dollar may not
give international sales the boost they received earlier in
2008.
COMPANIES TO WATCH:
Genentech Inc. (DNA) - reporting Jan. 15
Wall Street Expectations: Analysts surveyed by Thomson Reuters
anticipate earnings of 96 cents a share on revenue of $3.67
billion. A year earlier, it earned 69 cents a share on revenue of
$2.97 billion, excluding stock-based compensation and other
items.
Key Issues: The biotechnology giant, which rejected an offer
from majority owner Roche Holding AG (RHHBY) to buy the 44% stake
it doesn't hold for nearly $44 billion, continues to benefit from
strong sales of cancer drugs Avastin and Herceptin. Genentech's
appeal as a new source of drugs for Roche's pipeline has some
analysts expecting the company to eventually succeed in its bid,
even despite financing concerns, the credit crunch and economic
woes.
Amgen Inc. (AMGN) - reporting Jan. 26
Wall Street Expectations: Analysts project earnings of $1.07 a
share on revenue of $3.81 billion, compared with prior-year
profits, excluding stock-compensation and merger-related costs, of
$1 a share on revenue of $3.75 billion.
Key Issues: Sales of Amgen's anti-anemia drugs, which accounted
for 38% of third-quarter sales, have been hurt since 2007 studies
showed the drugs were overused, increased cardiovascular risks and
fueled certain kinds of cancer. Amgen is looking to its
experimental denosumab bone drug, for treating post-menopausal
osteoporosis, as a key future growth driver that could take some of
the pressure off the anemia franchise. Its U.S. approval
application was filed last month.
Celgene Corp. (CELG) - reporting Jan. 29
Wall Street Expectations: Analysts are looking for earnings of
43 cents a share on revenue of $627 million. Celgene had
year-earlier earnings of 31 cents a share excluding
stock-compensation costs on revenue of $415 million.
Key Issues: Celgene's sales have received a boost from continued
European marketing expansion of its Revlimid cancer drug and the
addition of blood-disorder treatment Vidaza from last year's
acquisition of Pharmion. The company, when it announced in October
that it would top full-year expectations, unveiled a deal with
Pfizer Inc. (PFE) to keep all revenue from the drug.
Biogen Idec Inc. (BIIB) - reporting Feb. 2
Wall Street Expectations: The company is forecast to post
earnings of 92 cents a share on revenue of $1.08 billion, compared
with 89 cents and $893 million, respectively, a year earlier.
Key Issues: Biogen has benefited from growing sales of its
multiple-sclerosis drugs and rheumatoid-arthritis treatment
Rituxan, co-promoted with Genentech. A key peg for future growth
driver, MS drug Tysabri, co-marketed with Ireland's Elan Corp.
(ELN), was linked in mid-December to a new case of a serious brain
infection - the seventh for the potent medicine, which was earlier
withdrawn because of the same side effect.
Genzyme Corp. (GENZ) - reporting Feb. 11
Wall Street Expectations: Analysts predict earnings of $1.01 a
share on revenue of $1.2 billion. The company had a prior-year
profit, excluding items, of 91 cents on revenue of $1.04
billion.
Key Issues: Acquisitions have helped broaden Genzyme's
portfolio, which mostly focuses on rare genetic disorders. Despite
projected competition in that space, the chief executive on
Wednesday backed the company's projection for 20% annual earnings
growth through 2011. The rare-genetic-diseases group a majority of
revenue and includes treatments for disorders ranging from enzyme
deficiency to the buildup of fats in blood vessels and complex
sugar glycogen in cells.
(The Thomson Reuters financial estimates and year-ago net may
not be comparable due to one-time items and other adjustments.)
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com
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