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VIDEOTwo Ways To Play: Genentech's Got Good Genes
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Out with earnings this afternoon is biotech company Genentech (DNA). The company, which is being pursued by its majority holder Roche Holding AG (RHHBY), said fourth-quarter profits rose 47% due in part to higher sales of its cancer drugs. According to Bloomberg, Genentech’s net income rose to $931 million, or $0.87 a share, from $632 million, or $0.59 a share a year earlier. Excluding some costs, the company showed a profit of 95 cents a share, which was $0.02 below consensus estimates of 97 a share.
Revenues rose 25% to $3.7 billion and sales of its cancer drug Avastin, jumped 21% to $731 million.
Further, the company is issuing downside guidance for fiscal year 2009. It expects earnings per share of $3.55-3.90, excluding certain items which is below consensus estimates of $3.92.
Last July, Roche offered almost $44 billion, or $89 per share, for the remaining shares of the company it didn’t own. But Genentech rejected the offer saying it was too low.
DNA shares closed today’s session down $0.57 to $85.08. Shares were offered at $84.72 in after-hours trading.
From the Bull Pen: Bulls can look to the biotech ETF (IBB). The stock appears to be holding its 50 DMA ($67). One can set a sell stop below that level.
From the Bear Cave: We mentioned a play in Johnson & Johnson (JNJ) this morning. Bears can continue to play this with a buy stop above $58-59.
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