EARNINGS PREVIEW: Biotechs Hit By Credit Woes; Deals Seen
14 April 2009 - 3:04AM
Dow Jones News
TAKING THE PULSE: The biotech sector remains under pressure as
the credit crunch leaves smaller firms scrambling to raise cash to
ensure survival. On the heels of Roche Holding AG's (RHHBY) $46.8
billion purchase last month of the rest of Genentech Inc. (DNA),
dealmaking is likely, spurred by larger firms' hunt for lucrative
new drugs to replace those coming off patent.
COMPANIES TO WATCH:
Biogen Idec Inc. (BIIB) - reports April 16
Wall Street Expectations: The mean estimate of analysts surveyed
by Thomson Reuters is for earnings, excluding items, of $1.01 a
share on revenue of $1.08 billion. Prior-year net income, including
acquisition-related and stock-compensation costs, was 54 cents on
revenue was $942 million.
Key Issues: The focus remains on whether Biogen can successfully
re-invigorate growth of multiple-sclerosis drug Tysabri, which is
sold under restrictions after being linked with a serious brain
infection in several patients. Meanwhile, Biogen early this month
kicked off its second proxy fight with billionaire Carl Icahn, who
has long argued the biotechnology concern should be sold to a large
pharmaceutical company.
Gilead Sciences Inc. (GILD) - reports April 21
Wall Street Expectations: The largest U.S. supplier of
AIDS-fighting drugs is seen posting earnings of 60 cents a share on
revenue of $1.5 billion, up from 51 cents and $1.26 billion,
respectively.
Key Issues: Strong growth is expected for treatments of HIV, the
virus that causes AIDS. Meantime, things are moving along in the
company's effort to expand its emerging portfolio of heart-related
drugs. Its announcement early this month that experimental
hypertension drug darusentan was effective in a late-stage study
sent shares surging. The company expects to close its $1.4 billion
acquisition of heart-drug maker CV Therapeutics Inc. (CVTX) this
quarter.
Genzyme Corp. (GENZ) - reports April 22
Wall Street Expectations: Analysts predict Genzyme will report
earnings, excluding items, of $1.05 a share on revenue of $1.22
billion. Year-earlier net income, including investment and other
charges, was 52 cents on revenue of $1.1 billion.
Key Issues: Investors remain focused on Genzyme's efforts to
boost production of its promising Pompe disease treatment
Myozyme/Lumizyme and resolve a warning letter concerning
deficiencies found at a Boston manufacturing facility. Genzyme's
acquisition last month of three cancer drugs from Germany's Bayer
AG (BAYRY), is seen as helping the biotech sustain long-term
earnings growth without adding much near-term risk.
Amgen Inc. (AMGN) - reports April 23
Wall Street Expectations: Analysts predict earnings, excluding
items such as stock compensation, of $1.15 a share on revenue of
$3.64 billion. A year ago, net income was $1.04 a share on revenue
of $3.61 billion.
Key Issues: Sales of Amgen's anti-anemia drugs, which accounted
for more than one-third of its fourth-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.
Celgene Corp. (CELG) - reporting May 4
Wall Street Expectations - Earnings, excluding items, are pegged
at 44 cents a share on revenue of $609 million. Celgene had a
prior-year net loss caused by acquisition charges of $3.98 a share
on revenue of $463 million.
Key Issues: Celgene, a traditionally high-growth drug maker,
shocked investors in late March with a first-quarter earnings
warning it blamed on economic issues while it tried to dismiss
concerns about slowing growth of its flagship Revlimid blood-cancer
drug. Revlimid, whose widened European rollout helped boost
Celgene's results last year, is facing a competitive challenge from
Velcade, a rival product made by Japan's Takeda Pharmaceutical Co.
(4502.TO).
(The Thomson Reuters financial estimate 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
(Thomas Gryta contributed to this article)