GENENTECH: BIOTECH STOCK OF 2008?

GENENTECH (NYSE:DNA): BIOTECH STOCK OF 2008?

This is what Fortune Magazine recommends in its 2008 Investors Guide, and we agree.
DNA has been unfairly punished on December 5, 2008, plunging 10% on news that the FDA Advisory Board had recommended against expanding the label of Avastin, Genentech’s “Niche Buster”, already approved for Colon and Lung Cancer, for Breast Cancer. The Panel criticized the methodology of the trials while recognizing that Avastin was effective. The European Drug Agency, EMEA, agrees and approved Avastin for Breast Cancer based on existing data. Most oncologists also agree, already use Avastin in some late stage cases and may expand their use to up to 40% of all their Breast Cancer patients upon FDA approval, according to a survey conducted by Sanford C. Bernstein & Co. As a result, Avastin sales, now $ 2.5 billion could reach $ 5 billion by 2011, says analyst Goeffrey Porges.

Wall Street Journal HealthBlog editor Jacob Goldstein has a more balanced view citing serious side effects, the high cost of the drug and uncertainties about the effects of Avastin (Bevacizumab) at different stages of the disease.

A comprehensive discussion of the pivotal phase III study – Paclitaxel plus Bevacizumab versus Paclitaxel Alone for Metastatic Breast Cancer – can be found in the December 27, 2007 issue of the New England Journal of Medicine Volume 357:2666-2676, Number 26.

In addition to Avastin, Genentech Product Portfolio’s strength also include Herceptin, a miracle drug for Breast Cancer, Lucentis for macular degeneration and cancer drug Rituxan, licensed from and co-promoted in the US with Biogen Idec (NASDAQ:BIIB), now with an expanded label for Rheumatoid Arthritis and potential for other Auto-Immune Diseases.

Genentech (NYSE:DNA) was trading at $ 67 a share (P/E 20) on December 31, 2007. Along with Tom Marsico, which firms owns 3,5% of DNA stock, we consider Genentech, not only the premier Biotech company but also the most innovative Pharma company in the world.

DNA is a Strong Buy for Biotech and Pharma Investors. It has the potential to reach the $100 a share mark.