Genentech 3rd-quarter profit rises 21 pct

By Bill Berkrot and Lisa Baertlein

NEW YORK/LOS ANGELES (Reuters) - Genentech Inc (DNA.N: Quote, Profile, Research, Stock Buzz) on Monday reported third-quarter profit rose 21 percent, helped by unexpectedly strong results from its Avastin cancer medicine, but shares dipped slightly after sales of other important products fell short of Wall Street targets.

The company controlled spending during the quarter, which analysts said helped offset shortfalls in sales of breast cancer drug Herceptin; Rituxan, for non-Hodgkin's lymphoma and rheumatoid arthritis; and eye medicine Lucentis.

U.S. sales of the colon-cancer and lung-cancer drug Avastin, which most analysts view as the key barometer of Genentech's fortunes, rose 37 percent to $597 million, topping Wall Street expectations of about $585 million.

The sales also exceeded the $564 million posted by the drug in the second quarter. Some analysts had feared that Avastin sales would be down from the previous quarter because of data that showed lower doses worked just as well as higher doses in treating lung cancer.

"You could argue that there was some weakness on some other line items, but Avastin continues to grow and that's the primary driver here," said Jason Kantor, an analyst for RBC Capital Markets, who called it a solid quarter.

"Everyone was concerned that Avastin was going to fall off a cliff with dose reductions in lung cancer but it looks like they're maintaining a good growth trajectory despite that data," Kantor said.

"The majority of growth came from lung cancer," Ian Clark, Genentech's commercial operations chief, said in an interview.

Longer duration of use in colon cancer and increased off-label use in breast cancer also helped boost Avastin sales in the recent quarter, he added.