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Ahead of the Bell: Genentech earnings

Biotechnology company Genentech Inc. is scheduled to report fourth-quarter and full-year financial results after the market closes Thursday, and Wall Street expects it to meet forecasts.
/ Source: The Associated Press

Biotechnology company Genentech Inc. is scheduled to report fourth-quarter and full-year financial results after the market closes Thursday, and Wall Street expects it to meet forecasts.

The bigger issue for analysts and investors is whether the company will comment on a potential new buyout bid from Roche. An earlier $43.7 billion offer was rejected but Roche recently said its bid for the company is on track, but details are scant.

Many analysts, including BMO Capital Markets' Jason Zhang, believe Genentech is worth about $100 or more in any transaction. Zhang, in a note to investors, recently said there was speculation over a $95-per-share offer, but would probably be rejected if true.

"We continue to believe that even if the reports are accurate, the special board committee representing Genentech minority shareholders will be very unlikely to accept this offer given all the potential upside in Genentech's pipeline," he said.

Avastin is the lead revenue driver and is approved for lung, colon and breast cancer. The company is seeking expansion of its use for a type of brain tumor. The company also counts on sales of Rituxan, which treats non-Hodgkin's lymphoma and rheumatoid arthritis, along with breast cancer drug Herceptin.

Analysts polled by Thomson Reuters expect Genentech to report fourth-quarter profit of 96 cents per share on revenue of $3.66 billion. For the full year, analysts expect profit of $3.43 per share on revenue of $13.37 billion.

Genentech expects full-year profit between $3.40 and $3.45 per share, excluding charges.