Back In 2003 investors were urging Genentech CEO Arthur D. Levinson to just give up on the company’s experimental cancer drug Avastin, which didn’t look promising in some early trials. It’s a good thing the scientist-turned-CEO didn’t listen. Thanks in part to Avastin, which was approved by the U.S. Food & Drug Administration to treat colon cancer last year, Genentech is on track to chalk up sales of $6.6 billion in 2005—a 42% improvement from 2004, analysts estimate. Earnings, meanwhile, could climb 72%, to $1.3 billion.
Levinson, 55, has always concentrated the company’s resources on pursuing science that addresses the largest unmet medical needs. That paid off in 2005 with a string of good news. Genentech achieved positive outcomes in five late-stage clinical trials, which could expand markets for Avastin and Genentech’s other cancer drugs. It also got positive data on Lucentis, its experimental drug to treat age-related macular degeneration (AMD), the leading cause of blindness in people over age 55. While Avastin chokes off blood supply to tumors, Lucentis plugs up leaky blood vessels that cause AMD. The company plans to file for FDA approval by the end of the year.
As Genentech prepares to celebrate its 30th anniversary in 2006, shareholders have good reason to be happy. Investors have pushed the company’s stock up some 80% this year, to about $97, making it the third-best performer in the American Exchange’s Biotech index.