Monday, March 20, 2006

Genentech Raises its Goals for Progress

Genentech Raises its Goals for Progress
By Amanda Janis/Business Writer

Katie Douglas, of Davis, makes adjustments to fermentation equipment producing heart medication at Genentech in Vacaville. The company plans to have 15 new products approved. (Reporter file)

Genentech plans to bring into development at least 20 new molecules and market at least 15 new products or new uses for existing products by 2010, the biotech giant announced Friday.

Should new uses be approved in the next four years for Rituxan, Herceptin, Avastin, or Xolair - the products manufactured for commercial use at the company's Vacaville facility - Genentech would expect to increase production locally, confirmed spokeswoman Caroline Pecquet.

"It's also likely that we would manufacture new molecules currently in clinical development once those are approved," she added, calling the Vacaville facility a vital part of Genentech's manufacturing process.

The goals - announced along with additional business objectives and earnings projections at Genentech's annual community investment meeting in New York - are revisions to the company's Horizon 2010 strategic plan. Previously, it called for clinical development of 13 molecules, and the marketing of 10 new products or uses.

Genentech revised its targets based upon recent achievements, its Chairman and Chief Executive Officer, Arthur Levinson, explained in a press release.

"Our success over the past several years has transformed our business, leading to additional opportunities for growth," he said.

Further targets added to the 2010 strategic plan include becoming the No. 1 U.S. oncology company in terms of sales, achieving a cumulative free cash flow - or operating cash flow minus gross capital expenses - of $12 billion, and a 25 percent growth in earnings per share (excluding various one-time expenses such as costs associated with the City of Hope litigation).

For the full year 2006, Genentech projected a 40-percent-to-50 percent growth in earnings per share, again excluding various one-time charges.

Additional business announcements made at the meeting included the decision to purchase land in Hillsboro, Ore. for development of a biotherapeutic manufacturing facility, expected to be licensed and operational in four years.

Genentech share value rose 6.7 percent, or $5.55, from Thursday to Friday, closing at $88.14 on the New York Stock Exchange.

Amanda Janis can be reached at

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