#2 - Genentech
1 DNA Way
South San Francisco, CA 94080
Tel: (650) 225-1000
Fax: (650) 225-6000
www.gene.com
| Headcount | 10,533 | |
| Year Established | 1976 | |
| Biopharma Revenues | $7,640 | +39% |
| Total Revenues | $9,284 | +40% |
| Royalty Revenues | $1,354 | +45% |
| Net Income | $2,113 | +65% |
| R&D Budget | $1,773 | +40% |
| Drugs Approved/Launched |
|
| Drug | Indication |
| avastin with chemotherapy | first-line non-small cell lung cancer, second-line metastatic colorectal cancer |
| rituxan | first-line CD20-positive, B-cell non-Hodgkin's lymphoma, low-grade NHL, rheumatoid arthritis |
| lucentis | neovascular wet AMD |
| Drugs Pending Approval |
|
| Drug | Indication |
| herceptin | adjuvant HER2-positive breast cancer |
| avastin with chemotherapy | first-line metastatic breast cancer |
| Drugs in Phase IIb and Beyond |
|
| Drug | Indication |
| 2nd generation anti-CD20 | lupus nephritis, rheumatoid arthritis, systemic lupus erythematosus |
| altu-238 | adult growth hormone deficiency |
| avastin | multiple cancer indications |
| avastin +/- tarceva | first-line metastatic, non-squamous, NSCLC |
| herceptin +/- avastin | first-line HER2-positive metastatic breast cancer |
| herceptin +/- pertuzumab | HER2-positive metastatic breast cancer |
| lucentis | diabetic macular edema, retinal vein occlusion |
| rituxan | follicular NHL, relapsed CLL, ANCA-associated vasculitis |
| tarceva | adjuvant non-small cell lung cancer, first-line metastatic NSCLC |
| TNKase | catheter clearance |
| xolair | pediatric asthma |
| Early Research Projects |
|
| Drug | Indication |
| 3rd generation anti-CD20 | hematologic malignancies |
| anti-CD40 | chronic lymphocytic leukemia |
| anti-IFN alpha | systemic lupus erythematosus |
| apo2L/TRAIL | solid tumors and hematologic malignancies |
| apomab | solid tumors and hematologic malignancies |
| br3-Fc | rheumatoid arthritis |
| iap antagonist | cancer therapy |
| mek inhibitor | cancer therapy |
| metMAb | cancer therapy |
| parp inhibitor | malignant melanoma |
| systemic hedgehog antagonist | solid tumors |
| trastuzumab-DM1 | HER2-positive metastatic breast cancer |
| Top Selling Drugs |
|||
| Drug | Indication | Sales | (+/-%) |
| rituxan | lymphoma, rheumatoid arthritis | $2,071 | +13% |
| avastin | oncology | $1,746 | +54% |
| herceptin | breast cancer | $1,234 | +65% |
| xolair | asthma | $425 | +33% |
| tarceva | lung cancer | $402 | +46% |
| lucentis | wet age-related macular degeneration | $380 | n/a |
| nutropin/protropin | growth hormone | $378 | +2% |
| activase/TNKase | thrombolytics | $243 | +11% |
Account for 90% of total biopharma sales, up from 89% in 2005.
PROFILE
Do the eyes have it? In June 2006, Genentech gained approval for Lucentis, a VEGF-inhibiting treatment for wet age-related macular degeneration, and quickly racked up $380 million in sales. Not shabby, for an injection into the eyeball (I'm sorry, but if it's going to creep me out, I feel that it should creep my readers out, too). Lucentis sales continued to climb with $211 million in 1Q2007, but they may be in for a decline, even though the drug is very effective and Genentech charges $2,000 per injection (into the eyeball).
Since Lucentis is a tailored formulation of Genentech's other VEGF inhibitor, cancer drug Avastin, it seems some doctors have concluded that it would be cheaper to use small doses of Avastin in place of Lucentis. About $1,950 cheaper, per injection. The National Institutes of Health (NIH) plans to run a head-to-head trial of the drugs, but Genentech has refused to fund any of it and will not provide drug product for the trial.
According to a Wall Street Journal article on the tussle, Avastin was believed to be too large a molecule to penetrate the retina, so Lucentis was formulated specifically for the eye. Before Lucentis' approval, however, some opthalmologists experimented with Avastin and got great results. So now Genentech needs to prove the value of Lucentis over Avantis, price it high enough to recoup its R&D investment, and maybe mention that repackaging Avastin might not be the most sterile proposition, especially when the drug is going to be. . . well, you know.
And this isn't the only pricing issue Genentech has faced. The company has been singled out — unfairly,, I think — as a gouger on drug prices, particularly within oncology. In an interview with the Wall Street Journal, chairman and chief executive officer Arthur D. Levinson, Ph.D. tried to bring some perspective on the phenomenon of drug pricing:
"Look at how much society is investing in cancer. In the absence of better care, 42% of everybody out there is going to get cancer. And half of those 42% are going to die of cancer. It's the leading cause of death among Americans under age 85. So how much are we spending on drugs for cancer? We have a $12 trillion GDP [gross domestic product]. And we're spending $15 billion. If I do that math, 1/800th of GDP for the leading cause of death. And people say cancer drugs are bankrupting America! Give me a break."
He added that Genentech doesn't have "Microsoft margins," but was not ashamed to say that drugs like Avastin have to have healthy margins because of R&D attrition rates.
Look Deeper
Speaking of which, while Genentech has some powerhouse products on the market in Avastin, Herceptin and Rituxan, its pipeline of new products appears sparse. Along with new product Lucentis, the company got seven line extensions approved in 2006, and has several more on tap for 2007. These are for undeniably important indications, and it's not as though Genentech's lineup is as narrowly focused as the top company on this biopharma list, so I shouldn't be too critical of the pipeline. A lot of biopharmas (and traditional pharmas) would be happy with the growth prospects of Genentech's marketed line.
Still, the CEO confirmed that Genentech has room to improve when, in the 1Q2007 earnings call, he commented, "[W]e expect a relatively uneventful '07 in terms of new product approvals."
Eye to Eye?
The company entered Phase III rheumatoid arthritis trials of its next-generation anti-CD20 drug ocrelizumab in late 2006, and plans further trials in lupus-related diseases. That drug is being developed as part of a program with Biogen Idec, as was its predecessor, Rituxan. However, BI and Genentech don't see eye-to-eye on this project and are having legal squabbles over the status of the agreement.
BI filed for a preliminary injunction in January 2007, but that was shot down in April by an arbitration panel. No final word yet from the panel, but Genentech warned that it may have to alter its clinical development plans.
And that's one of their two late-stage products. The other is a human growth hormone treatment, co-developed with Altus Pharmaceuticals.
First Buy
Genentech broke with its 30-year tradition in November 2006 by making its first acquisition. The company proposed a $919 million buyout of Tanox, its development partner (along with Novartis) on asthma treatment Xolair. In January 2007, the FTC asked for additional documents from both firms and hadn't cleared the acquisition at press time.
The buy should bolster Genentech's pipeline while also giving it a greater share of Xolair money. Unfortunately, the acquisition was proposed before the FDA's February 2007 request that Genentech add a "black box" label to Xolair because of the risk of anaphylaxis, symptoms of which include trouble breathing, chest tightness, dizziness, fainting, itching and hives, and swelling of the mouth and throat. For an asthma treatment, that's really not good. The FDA also asked Genentech to "provide a Medication Guide for patients to strengthen the existing warning for anaphylaxis," according to an Agency statement. Anaphylaxis was noted in Xolair's clinical trials, but occurred in only 0.1% of subjects. That proportion increased as the drug reached a broader base.
In all, Genentech's still on a great growth spurt, but it's going to need every penny it can get from Avastin, Herceptin and Rituxan to refresh its pipeline in the next few years.
For the full profile, including pipeline and patent information, download the PDF.
