By Brady Huggett
Both Immunex Corp. and Genzyme General reported firm numbers for the third quarter, with Immunex enjoying increasing Enbrel sales and Genzyme¿s figures receiving the benefit of swelling Renagel receipts.
Seattle-based Immunex posted a net income for the quarter ended Sept. 30 of $39.7 million, up 26 percent from 2000¿s third-quarter net income of $31.5 million. The company earned 7 cents per share ¿ a 1-cent improvement from its earnings per share over the same period last year ¿ and met consensus estimates. Revenue for the quarter totaled $253 million, an increase from $219 million in 2000¿s third quarter. Total product sales reached about $242.8 million, an increase of 12 percent over $217.2 million in the same period in 2000.
¿We are pleased that we were at the top end of our guidelines and that we hit our Enbrel sales,¿ said Robin Shapiro, director of public affairs at Immunex. ¿We are seeing growth in all of our products and that has led to our strong numbers.¿
Enbrel, Immunex¿s product for rheumatoid arthritis, generated $198.1 million in third-quarter sales, a 15 percent increase over the same period in 2000. Sales for the first nine months of the year were more than half a billion dollars, about $545.6 million, a 19 percent increase over the same period a year ago.
¿We gave guidance to expect sales next quarter to be between $205 million and $215 million,¿ Shapiro said. ¿For our year-end numbers, we are right at what we said we would be ¿ we projected that our sales would be up to $750 million. This product has incredible potential. We feel like the label is the strongest in the market.¿
The company has submitted a supplemental biologics license application for psoriatic arthritis, was granted priority review by the FDA, and expects to get a response early in 2002. In the past, an inability to manufacture enough Enbrel to meet demand has worried some investors and analysts. Immunex has been addressing those concerns.
¿What we have said is we should achieve at least $900 million in sales next year, and that we should be able to produce enough product to be between $900 million and more than $1 billion [in total product production],¿ Shapiro said.
Based on the company¿s increased capacity for Enbrel production, New York-based Deutsche Banc Alex. Brown Inc. analyst Dennis Harp said in a research note his firm was ¿raising our Enbrel sales estimate from $900 million to $1 billion in 2002 and from $1.2 billion to $1.4 billion in 2003.¿ Concomitantly, he raised earnings per share estimates ¿from $0.20 to $0.22 in 2001, from $0.23 to $0.24 in 2002 and from $0.36 to $0.37 in 2003.¿
Genzyme General, a division of Genzyme Corp., of Cambridge, Mass., topped its 29 cents consensus estimate, registering 30 cents per diluted share earnings on a net income of $64.1 million, a 16 percent increase over $55.2 million net income in 2000¿s third quarter. Revenues for the quarter rose 33 percent to $255.1 million, up from $192.2 million over the same period last year.
¿We are pleased with the exceptional top-line growth we generated this quarter, which was driven by the accelerating adoption of Renagel and the continued strength of our other businesses,¿ Henri Termeer, Genzyme Corp.¿s chairman and CEO, said in a prepared statement. ¿We also produced solid earnings growth that exceeded expectations.¿
While the company¿s earnings were expected, higher sales for Renagel were not.
¿Renagel was the surprise,¿ said Elise Wang, an analyst for Salomon Smith Barney in New York. ¿It¿s showing strong growth.¿
Genzyme¿s third-quarter sales for Renagel, a phosphate binder for patients with end-stage renal disease, were $52.4 million, an increase of more than 350 percent over the $13.8 million it generated in the third quarter of 2000. Based on the sizable growth, Genzyme raised its Renagel revenue guidance for the year to about $177 million, up from its previous range of $150 million to $160 million.
Sales of its product for Type I Gaucher¿s disease, Cerezyme, were $143 million, an increase of 5 percent from last year¿s third-quarter sales of $136.7 million. Wang noted that Genzyme expects Renagel¿s quarterly sales to exceed Cerezyme¿s sometime in 2002.
Genzyme¿s product for Fabry¿s disease, Fabrazyme, is under review by the FDA. The product received approval in Europe in August, as did the competition: Cambridge, Mass.-based Transkaryotic Therapies Inc.¿s Replagal. TKT and Genzyme both filed for orphan drug status in the United States. Since August, Fabrazyme has generated $1.9 million in sales in Europe.
A key for Genzyme looking forward, Wang said, is ¿continuing to see strong growth from Renagel.¿
Immunex¿s stock (NASDAQ:IMNX) rose 63 cents Thursday to close at $21.97. Genzyme¿s stock (NASDAQ:GENZ) climbed 84 cents to close at $45.01.