ROCHE: A Heavy Weight to give Substance to your Portfolio
maywillow - Sun, 24 Dec 06 :
America's 400 Best Big Companies
The Best Of The Best
Matthew Herper 01.08.07
Drugs & Biotechnology
Genentech
In the past three years $9 billion (sales) Genentech has launched three new drugs: the $2 billion (sales) cancer treatment, Avastin, Lucentis for macular degeneration ($400 million sales) and a pill, Tarceva, for lung cancer, with sales of $400 million. But the company's biggest success last year came from the breast cancer medicine Herceptin, an old drug for which Chief Executive Arthur Levinson helped lay the groundwork as a Genentech research scientist 26 years ago.
In early-stage breast cancer, Herceptin doubles a woman's chances of living cancer free. Those stunning results have nearly tripled the drug's annual sales to $1.3 billion and answer a challenge Levinson says was proffered by Andy Grove: Save lives, don't just extend them for a few months. Over the past five years Genentech's sales have grown at an annualized 33% and earnings at 95%. Genentech must deal with controversy over high drug prices--even with a new price cap Avastin can cost $55,000 a year. Can the company keep up its winning streak? Levinson is focusing on research into diseases where the immune system goes wrong, like rheumatoid arthritis, multiple sclerosis and allergies. Which explains Genentech's decision last November to buy asthma drug maker Tanox for $919 million in cash.
