Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  
TRANSCRIPT SPONSOR
Wall Street Horizon Logo

Genentech, Inc. (DNA)

Q2 2007 Earnings Call

July 11, 2007 5:15 pm ET

Executives

Susan Morris - IR

Art Levinson - Chairman, CEO

Ian Clark - EVP, Commercial

Sue Hellmann - President, Product Development

David Ebersman - EVP, CFO

Analysts

Gene Mack - HSBC Securities

Eric Schmidt - Cowen & Co.

Chris Raymond - Robert W. Baird

Jim Birchenough - Lehman Brothers

Joel Sendek - Lazard Capital Markets

Steve Harr - Morgan Stanley

Eric Ende - Merrill Lynch

May-Kin Ho - Goldman Sachs

Jason Kantor - RBC Capital Markets

Geoff Meacham – JP Morgan

Geoffrey Porges - Sanford Bernstein

Mark Schoenebaum - Bear Stearns

Douglas Chow - Caris & Company

Adam Walsh - Jefferies

Michael Aberman - Credit Suisse

Brian Rye - Janney Montgomery

Shiv Kapoor - Montgomery & Co.

Presentation

Operator

Good afternoon. At this time, I would like to welcome everyone to the Genentech Q2 2007 earnings conference call. (Operator Instructions) I would now like to hand the conference over to Ms. Susan Morris, Associate Director of Investor Relations. Ms. Morris, please go ahead.

Susan Morris

Good afternoon, everyone, and thank you for joining our Q2 2007 earnings call. We have posted an earnings call slide set on our website, www.gene.com.

This call is being electronically recorded and is copyrighted by Genentech. No reproductions, retransmissions or copies of this conference call can be made without the written permission of Genentech.

We will be making forward-looking statements and actual results may vary materially from those statements made. Please see the risk factors section of our Form 10-Q for the period ending March 31 2007 on file with the Securities and Exchange Commission for a discussion of the risk factors that could cause material variations from the forward-looking statements made during this conference call.

We will be discussing financial information that includes non-GAAP financial measures in our call today. Please refer to our website at www.gene.com under the Investor tab, and click Financials for the most directly comparable GAAP financial measures, with a reconciliation to the non-GAAP financial measures discussed today.

Today, I am joined by Art Levinson, Chairman and Chief Executive Officer; Ian Clark, Executive Vice President of Commercial Operations; Sue Hellmann, President of Product Development; and David Ebersman, Executive Vice President and Chief Financial Officer.

Now, I will turn the call over to Art.

TRANSCRIPT SPONSOR

Wall Street Horizon Logo

Do you get frustrated during earnings season?

Have you had trades go south because of bad earnings dates?

We know what it's like. We’ve been there. We’re Wall Street Horizon and we work with some of the largest firms on Wall Street.

Founded by former Fidelity Investments executives, we understand the power of trading on good information and the pain and suffering of trading otherwise. We obsess about earnings and economic events calendars so you don’t have to. Accurate. On time. Guaranteed.

Let us help.

Get Smart

Get Wall Street Horizon.

View our Free 30-day trial for investment professionals

To sponsor a Seeking Alpha transcript click here.

Art Levinson

Thank you, Sue and good afternoon, everyone. In the second quarter of 2007 our total operating revenues surpassed $3 billion for the first time. For the first six months of 2007 revenues were $5.8 billion, an increase of 40% over the first half of 2006, and non-GAAP earnings per share were $1.52, up 49% from the same period in 2006. We are pleased with the progress we have made across the business.

I'd like to begin now with some comments on our product pipeline. Our top business priority is filling our early-stage pipeline with promising new molecules that have the potential to make a meaningful difference for patients and to provide significant commercial returns for Genentech.

In March, we announced our intent to add 30 molecules into development in the years 2006 through 2010, and we feel good about the progress we have made. A year-and-a-half into this five-year period, we have added 13 molecules into development. We now have 20 new molecules in the early development pipeline, most targeting novel mechanisms based on promising biology.

Additionally, we are pleased with our robust late-stage research program, which we expect will provide the additional molecules to enable us to meet our 2010 NME goals.

We continue to believe that emerging biological insights are enabling the discovery of interesting new mechanisms and molecules. For example, one area of biology that continues to look promising to us and where we continue to invest resources is in the area of anti-angiogenesis. Our approach is to systematically analyze angiogenic factors that collaborate with VEGF in tumor angiogenesis, and we currently have nine new molecular entities progressing through research. Several are approaching IND decisions in the next 12 months, based on encouraging preclinical data that may build upon the foundation we have established with Avastin. Our goal is to continue our leadership in this field.

In the first half of 2007, we and our collaborators advanced several products into the next phase of development including trastuzumab-DM1, Apo2L/TRAIL and Apomab into Phase II, and pertuzumab for HER2-positive metastatic breast cancer into Phase III. We reported encouraging activity for trastuzumab-DM1, our most advanced antibody drug conjugant program, in collaboration with Immunogen at ASCO 2007. We believe that this technology offers an innovative new approach to delivering a payload to tumor cells expressing a specific antigen.

We are currently developing rule sets that describes the best approach to antibody drug conjugants for ADCs, and we have entered two other ADCs with different tumor antigen targets into late-stage research. We are excited about the scientific advances and the promise of this complex technology.

Additionally, we continue to recognize that Genentech is not the only place for great science to flourish and we are focused on building our pipeline both internally and through collaborations. In business development, we have had a productive year thus far, entering into collaborations with companies including Altus, BioInvent, Seattle Genetics and Tercica.

We are pleased with the recent Abbott collaboration to co-develop two small promising small molecules in the fields of anti-angiogenesis and apoptosis. We believe that ABT-263 molecule has an attractive profile as an inhibitor of Bcl-2, which we consider a high-priority target because of its critical placement in the apoptotic pathway.

For ABT-869, we have been watching with interest as anti-angiogenic small molecules have begun to generate clinical data. As you know, we expect small molecule anti-angiogenics will generally be less specific compared to monoclonal antibodies, and that the non-specific binding can theoretically be either advantageous for efficacy and/or disadvantageous for safety. For ABT-869, the preclinical and clinical data suggests to us that the molecule may have an unusually interesting profile, and could potentially be combined with Avastin and/or stand alone in various tumor types.

Turning next to Avastin, the AVAIL study has created some clinical and commercial challenges for us, as the study demonstrated that the PFS benefit was similar between the high and low dose Avastin arms. We will continue to promote to the approved U.S. label dose which is based on the E4599 trial, which demonstrated a clinically and statistically significant improvement in overall survival with a median survival beyond one year when the high dose of Avastin was combined with the chemotherapy most frequently used for non-small cell lung cancer in the U.S.

While this is a complex situation to manage, it is one that we should not be totally surprised to face now or potentially again in the future. Given the lack of good surrogate endpoints available in oncology trials and the large-size trials needed to show differences in the clinical endpoints, it is difficult to assess the optimal dose with confidence in Phase II trials. Until better surrogates are available, oncology is a field where exploration of dose and duration will continue post-approval for new agents, with the commensurate commercial and clinical uncertainties.

Another important issue for us is the continuing Congressional effort to create follow-on biologics legislation. As you are aware, Congress continues to discuss multiple proposals to establish a new FDA approval pathway for so-called bio-similar products. We continue to maintain that the legislation must ensure both patient safety while providing incentives for innovation within the biotechnology and university research communities.

We are pleased with certain key elements of several proposals under consideration by Congress, including reasonable provisions to protect the exclusivity of innovators' data, and we will continue to participate in the debate and dialogue on this legislation.

If follow-on biologic legislation does pass, we believe that we will remain in a favorable market position due to our strong intellectual property protection, our focus on developing second and third generation molecules and our commitment to innovation. We will always face competition, whether from follow-on biologics or other new molecules, and Genentech's objective is to innovate in order to outpace our competitors.

In summary, we continue to manage the business with a primary intent of developing important new medicines and building sustainable long-term growth and shareholder value. Our guiding principles for running the business remain focused in four areas:

One, excellent science and being recognized as a leader in scientific innovation and in translating basic scientific discoveries into important therapies;

Two, long-term planning with a focus on significant value creation and disciplined decision-making in managing our portfolio of R&D investments;

Three, execution against our aggressive goals; and

Four, our people and culture. We continue to embrace and nurture our unique culture, which we believe offers us a competitive advantage in stimulating innovation and efficiency.

In sum, we believe that if we continue to invest wisely and appropriately in R&D, we expect to be able to develop first and/or best in class molecules for significant unmet medical needs and to deliver the long-term growth our shareholders expect of us.

Now, I would like to turn the call over to Ian.

Ian Clark

Thank you, Art and good afternoon to everybody. U.S. sales in the second quarter were $2.15 billion, up 25% from the same quarter last year.

Moving on to the products in oncology, first of all Avastin. U.S. sales were $564 million in quarter 2, an increase of 33% over the prior year. Year-on-year growth resulted primarily from increased sales in metastatic non-small-cell lung cancer and in metastatic breast cancer, another approved use of Avastin in the U.S. Sales in both first and second-line metastatic colorectal cancer were stable relative to the same quarter last year.

In metastatic lung cancer, our tracking data indicate that penetration has increased to approximately 30%. Consistent with Q1, 75% of lung cancer patients received the higher 50 mg/kg every three weekly dose. However, the majority of our tracking data occurred prior to the presentation of the AVAIL data at ASCO. I have indicated before, we do expect the AVAIL data to lead to some level of increased adoption of the lower dose. We are in a better position, obviously, to update you on this in the fall.

Sales growth also resulted from increased used in metastatic breast cancer in Q2 relative to the same quarter last year. Compared to Q1 2007 however, adoption in metastatic breast cancer was flat.

Moving to Herceptin. U.S. sales of Herceptin were $329 million in the quarter, a 3% increase over the same quarter last year. Our market research indicates that penetration in adjuvant breast cancer, after stabilizing in the mid-60's for several quarters, grew to over 70% in quarter 2. We await further data to confirm this positive trend.

Penetration and duration of Herceptin in the metastatic setting has remained stable. The pattern of use appears to be primarily within its label indication in later lines of metastatic disease, and we believe that a portion of pattern of use is in patients who would not normally have received Herceptin. These factors have limited the impact on Herceptin sales to date.

U.S. sales for Tarceva were $102 million in Q2, essentially flat compared to Q2 of 2006. Product revenue increased modestly relative to the same quarter last year. However, this increase was offset by an unusually high Q2 product return related to expiring inventory, requiring us to increase our reserve rate.

Now on to Rituxan. Total U.S. sales reached $582 million in the quarter, an 11% increase over the same quarter of last year. In hematology the sales growth resulted from increased use of Rituxan following first-line therapy in indolent non-Hodgkin's lymphoma, often referred to as maintenance therapy, and in unapproved uses. Rituxan's overall adoption rate in NHL and CLL has remained steady.

Moving on to immunology and continuing with Rituxan in RA. Q2 2007 was a strong quarter for Rituxan in RA, as market share grew in its label indication. Early indicators of re-treatment remain consistent with expectations, with approximately 65% of Rituxan-using physicians having re-treated at least one patient. The average re-treatment interval was approximately seven months between courses.

Onto Xolair. U.S. sales of Xolair were $120 million in Q2, a 14% increase over the same quarter last year. Penetration in our target market of moderate to severe asthma patients is similar to Q1 of this year. We've agreed to a new U.S. label and risk map for the FDA that highlight the incidents of anaphylaxis and enable physicians to provide appropriate safeguards. This matter now resolved, we expect continued good growth of Xolair use.

Completing immunology, U.S. sales for Raptiva were $27 million in the quarter, a 23% increase over the same quarter last year.

Now moving to our tissue growth and repair products and beginning with Lucentis. $209 million Q2 sales were in line with our expectations. As we come to the close of the first year of the product on the market, our data indicate that the average patient is receiving three or occasionally four doses in the first four months of treatment, followed by three more doses in the remaining eight months, this is consistent with our earlier market projections.

Difficult to predict how patients may be treated in the second year of therapy. Pronto data, released in ARVO in May, illustrated that in a well-controlled study, patients received a median of five doses in their second year of treatment. However, in the real world, compliance is likely to become a factor.

Lucentis new patient share has remained steady at approximately 55%, and its total patient share has grown to approximately 50%.

Now finally to our remaining tissue growth and repair products. U.S. sales of Nutropin were $94 million in the quarter, a decrease of 4% compared to the same quarter last year, the decrease primarily resulting from managed care contracting changes with the now six competitors on the market.

For our lytics products, U.S. sales were $67 million in Q2, an 8% increase over last year. Finally for Pulmozyme, U.S. sales were $55 million in the quarter, a 17% increase over the same quarter last year.

Now, I'll turn the call over to Sue.

Sue Hellmann

Thanks, Ian and good afternoon. We have continued to make progress in the development pipeline. In the second quarter of 2007, we submitted two sBLAs for Herceptin in early stage breast cancer based on the BTIRG 006 data, and we initiated over ten clinical trials. The newly initiated trials are listed on the slides, so I will just highlight the Phase III studies:

Two additional studies of Avastin, ECOG 1505 in adjuvant squamous and non-squamous-cell lung cancer and SWOG 0600 in second-line metastatic colorectal cancer; two additional Phase III trials of our humanized anti-CD20 in rheumatoid arthritis; and four Phase III trials for Lucentis in diabetic macular edema and retinal vein occlusion.

Additionally, we added three new molecular entities to the development pipeline. The two new Abbott small molecules and an unnamed new molecule in Phase I development for cancer.

Starting with the Avastin program, regarding the 9-02-06 trial of Avastin in renal cell cancer, we're pleased to announce that the CALGB Data Safety Monitoring Board has released the data results from the trial's secondary endpoints to study participants and investigators. CALGB has indicated that the benefit from Avastin when added to Interferon in this trial was similar to that seen in Roche's AVOREN study, and that the treatments were well-tolerated with no new safety signals emerging outside of the known toxicities of interferon and Avastin.

There is still an insufficient number of death events to conduct a definitive primary analysis for overall survival, and patients will continue to be followed for this endpoint. Patients currently receiving Interferon alone will be permitted to receive Avastin at the time of disease progression.

We are in discussions with the FDA regarding a potential sBLA submission in first line renal cell carcinoma based on the data from Roche's AVOREN study, along with information from the CALGB 90206 study. We will be sharing the efficacy outcomes in women from Roche's AVAIL study with the FDA, as per our post-marketing commitment. At this time, we do not plan to submit an sBLA based on the AVAIL data to the FDA.

Data from Roche's AVADO trial that evaluates Docetaxel alone compared to Docetaxel with either a high dose or a low dose of Avastin in first line metastatic breast cancer is anticipated in the first half of 2008. The primary endpoint of this placebo-controlled trial is progression-free survival. ECOG has confirmed that the 15 mg/kg every three weekly dose of Avastin will be used in the recently initiated ECOG 1505 in adjuvant non-small cell lung cancer. This study will evaluate overall survival in approximately 1,500 patients with both squamous and non-squamous non-small cell lung cancer.

Following surgery for stage 1B through 3A disease, patients can be treated with three different chemotherapy options: Cisplatin with either Vinorelbine, Gemcitabine or Docetaxel with or without Avastin, which will be administered for a total of one year.

With respect to the E2100 breast cancer sBLA, we are on track for a resubmission next month. We expect that the independent radiological review will be in line with the investigator analysis. We believe that Avastin and Paclitaxel have the potential to provide a significant benefit to women with metastatic breast cancer.

The first interim efficacy analysis in the NSABP C-08 Phase III study in adjuvant colon cancer occurred in the second quarter of this year. This initial interim analysis was conducted based on only a small number of clinical events. Regular interim analysis of the study are planned to occur approximately every six months until the study is stopped early or reaches the final analysis, estimated to occur in 2010.

It is important to remember that only a small number of events have occurred at these early interim analysis, and that the ultimate objective is to safely continue the study until a sufficient number of events have occurred to allow a robust analysis of relative differences between the treatment arms. We do not plan to provide updates when interim analysis has taken place, and only plan to comment should the study be stopped for either efficacy or futility, or if there is an unexpected safety event or significant protocol amendment.

Now, turning to our Herceptin program. We anticipate a ten-month review for the supplemental BLAs, based on the BCIRG data. This study treated women with node-positive and node-negative HER2-positive early breast cancer with 52 weeks of Herceptin, and the study included a non-anthracycline containing regimen which if FDA approved will add to the label treatment options for patients with HER2-positive early-stage breast cancer.

The supplemental BLA, based on the one-year HERA data, was submitted to the FDA in late December 2006, and the action date is October 22nd. An analysis of HERA evaluating one-year versus two-year Herceptin therapy is expected either late 2008 or early 2009. As was previously mentioned, the timing of this analysis is event rate-driven and based on the positive one-year data, this does create a high bar for the two-year arm to compete with.

Now, turning to Pertuzumab, we anticipate initiating the Phase III trial with Herceptin, Docetaxel plus/minus Pertuzumab in first-line HER2 positive metastatic breast cancer in late 2007. We are awaiting results from Roche's Phase II study in platinum-sensitive ovarian cancer. We plan to further analyze the results from our study in platinum-resistant ovarian cancer along with the Roche study to determine next steps.

Regarding our Apoptosis development project, we issued initiated the Phase II cohorts of the Apo2L/TRAIL trial in combination with Rituxan for non-Hodgkin's lymphoma. We also initiated two Phase II studies with Apomab, one in sarcoma as a single agent and the other in combination with Avastin in chemo in non-small cell lung cancer.

Now, turning to our immunology programs starting with Rituxan, we anticipate data later this year or early 2008 in the Phase III RA studies SERENE and SUNRISE, evaluating Rituxan and Methotrexate and anti-TNF-inadequate responders respectively, and we're looking forward to the results of the Phase II/III OLYMPUS study in primary progressive MS in the first half of 2008 and results from the Phase II/III SLE study EXPLORER in mid-2008.

In the second generation humanized anti-CD20 program, we initiated two additional Phase III trials in rheumatoid arthritis, one in TNF-inadequate responders, and the other an X-ray study of patients not currently on Methotrexate. We now have three RA studies enrolling patients. Studies in lupus and ulcerative colitis are anticipated to initiate late this year or early 2008.

The Phase II HERMES data results with Rituxan in RRMS were presented at the American Academy of Neurology in May, and were well-received by physicians. We look forward to initiating two Phase III studies in RRMS in 2008 with a second-generation humanized anti-CD20.

Now, turning to Xolair, we have recently updated the Xolair label to include a box warning and medication guide providing updated information on the risk and management of anaphylaxis in patients. The updated label states Xolair should only be administered by healthcare providers, and patients should be observed following its administration. It is at the discretion of the physician to determine the appropriate duration of observation for individual patients. As part of the risk map, we will provide educational materials to physicians and patients, and will periodically survey healthcare providers and patients to evaluate how effective these educational materials are.

We are broadly communicating the label update to potential prescribers via Dear Healthcare Provider letters, and have committed to two Phase IV studies. One is to establish and validate an allergy skin test for use with Xolair, and the second is to establish an observational repository of cases of hypersensitivity reactions associated with Xolair administration and appropriate control cases.

Regarding HAY-1, our second-generation anti-IgE antibody, two patients with moderate to severe allergic asthma participating in the Phase II study experienced adverse events, one anaphylaxis and one allergic reaction, and we put the study on hold in late April. While the safety evaluation concluded that the relationship to HAY-1 could not be clearly established given the small number of events, we cannot rule out any relationship to HAY-1. Patient safety is our priority, and we have made the decision to discontinue this study in the HAY-1 program.

Turning to tissue growth and repair, two additional programs for Lucentis opened for enrollment during the quarter: diabetic macular edema and retinal vein occlusion. The DME Phase III studies RIDE and RISE will enroll approximately 360 patients each, and the primary endpoint is improvement in best corrected visual acuity at 24 months compared with baseline. We will be conducting two Phase III trials in retinal vein occlusion, one in branch RVO and the other in central RVO, with a planned enrollment of 390 patients for each of these trials. The primary objective is best corrected visual acuity at six months compared with baseline.

Also during the quarter, Novartis completed enrollment in the Phase II RESOLVE study for diabetic macular edema and we expect results by Q3 2008.

I'll close my comments by highlighting the anticipated news flow for the second half of the year and early 2008. Please refer to the slide deck for other milestones related to the initiation and completion of studies and FDA submissions.

We expect FDA action on the Herceptin sBLA submission based on the one-year HERA data on October 22. The results from the Phase II BRAIN study evaluating Avastin in glioblastoma multiforme are expected in Q4. For Lucentis, data from the first cohort of the Phase IIIb SAILOR study and the two-year pure data in wet AMD are also expected Q4 this year.

The initial safety results from the Phase II pilot study of Avastin in adjuvant HER2-negative breast cancer are likely to be presented at the San Antonio breast cancer symposium in December. Data results from Roche's Phase III AVITA study in pancreatic cancer are anticipated late 2007 or early 2008.

We are also looking forward to the results in two Rituxan RA studies late this year or early 2008: SERENE in Methotrexate-inadequate responders and SUNRISE, the controlled re-treatment study. Another important milestone for Rituxan is the PDUFA date for the supplemental BLA radiographic submission from REFLEX in January 2008.

Now, I'll turn the call over to David.

David Ebersman

Thank you, Sue and good afternoon, everyone. I will start off today with updates on manufacturing, Cabilly and Tanox.

In manufacturing, we're pleased to report that in Q2, we received FDA licensure of our Oceanside manufacturing facility to produce bulk Avastin. We also received approval for a new aseptic fill/finish line in south San Francisco, which further reduces the risk in our supply network.

Additionally, we broke ground on our E. coli production facility in Singapore and achieve mechanical completion for our CCP2 facility in Vacaville, where we continue to anticipate licensure in 2009.

We will continue working to configure our supply chain to balance our objectives, to mitigate supply risks while managing within our cost-of-sales targets, embracing as best we can the inherent uncertainties in predicting future supply and demand trends.

Turning to the Cabilly patent reexamination, as you may remember, on February 16th of this year, the U.S. Patent Office issued a final office action from its re-examination, rejecting all claims of our 415 Cabilly patent. We responded to the action on May 21, 2007 and requested continued re-examination. On May 31, 2007, the U.S. Patent Office responded favorably to our request and revised their February 16th action from a final office action to a non-final office action. As a result, we're still in the re-examination process with the U.S. Patent Office. As we have previously disclosed, all claims of the Cabilly patent remain valid and enforceable throughout the re-examination and appeals process.

Regarding our proposed acquisition of Tanox, we continue to anticipate closing this deal in the third quarter of this year, subject to customary closing conditions, expiration of the HartScottRodino waiting period and the absence of a material adverse event.

Turning now to the financials, unless otherwise noted, my comments are on a non-GAAP basis, which exclude the effects of recurring charges related to the 1999 Roche redemption, litigation-related special items and employee stock compensation expense.

I'll start with the revenue components of the income statement. Sales to collaborators were $294 million this quarter, a 213% increase over Q2 2006. Increases relative to last year were due to the more favorable pricing for Herceptin shipments to Roche, as well as higher volumes of Herceptin, Rituxan and Avastin. As you know, sales to collaborators vary from quarter to quarter based on the production and order plan, and we still expect the remaining quarters of 2007 to be lower than the second quarter, such that full year 2007 sales to collaborators will be approximately double the $471 million reported in 2006.

Royalty revenues were $484 million, a 53% increase over Q2 2006. Royalty revenue in Q2 benefited from a new collaboration completed this quarter, as part of which we recognized a one-time gain of approximately $65 million which reflects acceleration of expected future royalty revenue from the next three years. Please note that as part of this same new collaboration in Q2 we also had an offsetting license fee charged to R&D of a similar amount, so the net EPS impact of this deal for Q2 was essentially zero. We wanted you to be aware of this so you wouldn't include the $65 million in your thinking as you try to forecast future royalty revenues. For 2007, driven by this one-time acceleration, we now expect royalties to grow in excess of 30% over 2006.

Contract revenues were $77 million this quarter, a 5% increase over Q2 2006. We continue to expect contract revenues in 2007 to be flat relative to 2006. Total operating revenues were approximately $3 billion this quarter, a 37% increase over Q2 2006.

Turning now to the expense line items, non-GAAP cost of sales was $413 million or 17% of net product sales this quarter, an increase from 16% in Q2 2006, primarily due to higher sales volume to collaborators. For 2007, we continue to expect cost of sales to remain at approximately 16%, barring any unforeseen manufacturing or inventory issues.

Non-GAAP R&D expenses were $564 million this quarter, a 58% increase over Q2 2006, driven by increased development spending and higher business development deals. R&D was 19% of operating revenues this quarter, an increase from 16% in Q2 2006. For 2007, we now expect R&D expense to be approximately 20% of revenues.

Non-GAAP MG&A expenses were $485 million this quarter, a 13% increase over Q2 2006. MG&A as a percentage of operating revenues was 16% this quarter, a decrease from 20% in Q2 2006. We expect MG&A expenses to ramp up in the second half of the year, and in 2007 we continue to expect MG&A as a percent of revenues to be approximately 17% to 18%.

Collaboration and profit-sharing expenses were $277 million this quarter, an increase of 7% over Q2 2006. Non-GAAP pre-tax operating margin as a percentage of total revenues was 42% this quarter, an increase from 40% in Q2 2006. For 2007, we continue to expect an operating margin of about 40%.

Other income net was $58 million this quarter. In 2007, we continue to expect other income net to be approximately 80% of the 2006 figure, if interest rates remain stable.

On taxes, our non-GAAP tax rate was 37% this quarter, a decrease from 38% in Q2 2006. We continue to expect our tax rate for the full year 2007 to be about 37%.

Non-GAAP net income this quarter was $834 million or $0.78 a share, a 39% increase in net income and EPS over Q2 last year. For 2007, we are increasing our non-GAAP EPS guidance for the year to 28% to 32% growth relative to 2006. This translates to $2.85 to $2.95 per share.

Employee stock-based compensation expense was approximately $102 million on a pre-tax basis or $64 million after taxes or $0.06 a share this quarter, compared to $0.04 a share in the second quarter last year.

Now, turning to some cash metrics, cash from ongoing operations in the quarter was approximately $700 million, and cash yields for capital expenditures was approximately $250 million. Our free cash flow for Q2 was approximately $450 million, up from about $177 million in Q2 2006.

In 2007 we now estimate that capital expenditures should come in at approximately $1.1 billion.

In Q2 2007, we spent $274 million for gross share repurchases, with a net effect on our cash position of approximately negative $144 million, including the offsetting cash inflows from stock option exercises and the tax benefits related to those exercises. Our unrestricted cash and investments portfolio totaled approximately $5.1 billion at June 30, 2007, compared to $4 billion as of June 30, 2006.

Let me close now by saying that we're pleased with our second quarter and year-to-date results. We achieved significant profit growth while significantly increasing our investment in internal R&D and making new in-licensing investments totaling more than $180 million.

We remain committed to taking advantage of the business opportunities in front of us and to expanding our R&D pipeline, so that the company is well-positioned to continue to bring forward important new molecules that help patients and that drive our long-term growth.

Now, I will turn the call back over to Sue Morris.

Susan Morris

Thank you, David. Before we begin the Q&A session, I would like to remind you to please limit your questions to one so that as many of you as possible can get a question in. Operator, can you please queue up the Q&A?

Question-and-Answer Session

Operator

Your first question comes from Gene Mack - HSBC Securities.

Gene Mack - HSBC Securities

Thanks for taking my question. When might we get to see the final overall survival data from the ECOG 2100 trial?

Sue Hellmann

The trial as submitted to FDA includes the analyses that were presented most recently at San Antonio last year. I would expect that ECOG will continue to monitor the study so they will have periodic updates. I don't think they've told us exactly when the next one is.

The primary endpoint of the study is progression-free survival. As you know, patients go on to a variety of additional therapies, so it isn't our expectations that this is a trial that will mature to show survival. It could, but it isn't our expectation, given the differential treatment. We are very pleased that the trial met its primary endpoints; a very nice, robust approximate doubling of progression-free survival. We do have to document that carefully, which is why we are resubmitting the data. But we are not awaiting positive survival data.

Operator

Our next question comes from Eric Schmidt - Cowen & Co.

Eric Schmidt - Cowen & Co.

Good afternoon, thanks for taking my call. In terms of the Avastin adjuvant dataset in colorectal cancer, are the next interim analyses driven by events or by time in terms of six-month intervals?

Also, could you share with us what the stopping rules of the study are, or are they at the discretion of the DSMB?

Sue Hellmann

Two answers, the first interim analysis for safety and efficacy was driven by events, the first one. Subsequent analyses are time-driven, so subsequent analyses happen approximately every six months, regardless of the number of events.

We have not publicly disclosed the statistical analysis plan for the study, which would give you the stopping rules. But the stopping rules are really consistent with what you would expect from a long-term adjuvant therapy trial. They are based on the statistical concept here is that you really don't want to be wrong in stopping a study early. But we haven't disclosed the exact statistical analysis plan for the study.

The study's final results though, if it carries out as per the statistical analysis plan and is not stopped early, would be 2010.

Eric Schmidt - Cowen & Co.

As a quick follow-up, is there any chance that we could see a combined dataset with the NASB trial and the AVANT study? Or are those two protocols too different to have a Herceptin-like outcome here?

Sue Hellmann

It isn't our expectation currently that we will combine those two trials as was done with Herceptin. It's our expectation that they will be looked at separately.

Let me just make sure to remind you that while we were pretty excited about the joint analysis for Herceptin, each of those would have stood on its own alone, in retrospect.

Operator

Our next question comes from Chris Raymond – Robert W. Baird.

Chris Raymond – Robert W. Baird

Just a question on Lucentis. I'm curious if you could maybe educate us. What is the driver behind the endpoint being 24 months for the diabetic macular edema effort?

Also, if you could comment a little bit on, how big do you think this market is?

Sue Hellmann

I'll leave it to Ian to talk about the marketplace, but the DME studies as you know, there's a lot of history in studying various agents for diabetic macular edema. FDA has had very strongly-held views of, actually, three-year follow-ups for quite some time. There's been a lot of discussions in the field and obviously, a lot of enthusiasm around Lucentis and the degree, the magnitude of the difference we saw with Lucentis.

FDA has had some independent input, separate and aside from Lucentis, on how long patients should be followed in diabetic macular edema trials. So there's been a lot of public discussion about this, and the evolution to a 24-month endpoint in our Lucentis trials is on the basis of those two factors. One is FDA's input and analysis of input they have had from investigators and secondly, our own negotiations with FDA based on this being a potential second indication for Lucentis.

Ian Clark

In terms of the market size, it's probably fair to say it's not dissimilar to the AMD market. I think we covered this in New York. It's really quite a big market. Sadly, there's really somewhat epidemic proportions of growth in diabetics, and that's growing very fast. The patients are typically considerably younger than the AMD patients. So they might need a suitable therapy for a lot longer than possibly some of the AMD patients might as well.

Operator

Our next question comes from Jim Birchenough - Lehman Brothers.

Jim Birchenough - Lehman Brothers

Thanks for taking the question. Just trying to understand a bit better the assumptions underlying the guidance for the second half. There's been obviously strong EPS growth for several years, but the guidance would suggest a sequential decline. I am just trying to understand better the assumptions underlying the guidance that was provided today.

David Ebersman

A couple of things go into that. The first is that while US product sales are obviously the biggest part of our revenue line there are other elements that contribute to that, some of which were unusually high in the first half of the year. So sales to collaborators, for example, don't flow naturally with demand. They reflect just the production and the order plan. You can tell by the guidance on that line item that we are going to come down on that one in the second half of the year.

Similarly, on royalties, we had that $65 million payment. If you take that out, royalties are not going to grow at the same pace that we've seen.

Then the other big contributing factor is that our expenses ramp up in the second half of the year, as you've seen looking back over many years. So we have sort of an annual planning horizon. We, towards the end of a calendar year, figure out what activities we are going to fund in the following year. It often takes a while to get those activities ramped up.

So both on the marketing and selling side and, in particular, in R&D, where we have moved a lot of molecules into development, we are going to be gearing up to spend on those molecules as well as big Phase III programs that we have ongoing. You're going to see significant expense growth in the second half of the year versus the first.

Operator

Our next question comes from Joel Sendek - Lazard Capital Markets.

Joel Sendek - Lazard Capital Markets

I have a follow-up question on the C-08 study. I'm wondering if you can tell us at all about the type of patients in the study, whether they are a greater preponderance of stage two versus stage three, and what the dropout rate has been so far, and whether either of these things would have an impact on when the study might show a result in advance of the final analysis?

Sue Hellmann

As you know, this study is being done independently by NSABP, so I don't have the information to answer either of your two questions.

Operator

Our next question comes from Steve Harr - Morgan Stanley.

Steve Harr - Morgan Stanley

I was hoping you guys could just give us a little bit of an update on where you stand in the second-generation CD20 arbitration, or at the very least just give us an idea of when we might expect some type of resolution?

David Ebersman

Steve, as you know, we have been working together with Biogen Idec for many years and in 2006 we announced that we have an arbitration to resolve differences the companies are struggling with as it relates to how we interpret the agreement for decision-making rights for these products.

Biogen Idec requested a preliminary injunction to force us to cease development of the molecules, and a hearing was held in January of this year. In April, the arbitrators denied Biogen Idec's request for a preliminary injunction and for summary judgment.

So if the matter isn't otherwise resolved by the parties, we expect to have a decision by the panel by approximately the end of 2008.

Operator

Our next question comes from Eric Ende - Merrill Lynch.

Eric Ende - Merrill Lynch

Do you think the additional RA studies with the humanized anti-CD20 antibody are going to slow down your expected timing of eventual launch, or is that just to expand things?

Sue Hellmann

I apologize. I didn't get the question. Could you repeat it, please?

Eric Ende - Merrill Lynch

Sure. The additional RA studies that you're doing with the humanized anti-CD20 antibody, do you expect that to slow down your expected timing of an eventual launch?

Sue Hellmann

No. Our intention with the package of RA trials that we are doing, as you know, this is a very competitive marketplace, and our intention is to robustly study the humanized anti-CD20 and to launch with a good label. So we think this is really the price of entry into the market, in many ways, because it's so competitive and so important to generate that kind of robust data. So we certainly didn't add any bells and whistles that we don't think are absolutely necessary to prove in a robust way safety and efficacy. We have a real sense of urgency around the program and have put a big emphasis on enrollment rates for that.

Eric Ende - Merrill Lynch

So nothing has changed. This was always planned.

Sue Hellmann

This is our planned clinical development program.

Eric Ende - Merrill Lynch

So the FDA didn't ask for additional studies, it's just you guys. Okay, great.

Sue Hellmann

We decided that we needed to have a very robust set of studies in a patient group that still has a big unmet need but has a lot of biologics in the marketplace, as you know.

Operator

Our next question comes from May-Kin Ho - Goldman Sachs.

May-Kin Ho - Goldman Sachs

Can you explain why on this collaboration that involved $65 million in payment that you did it this way? What is the implication on the royalties for the following two years, in 2008 and 2009?

David Ebersman

I can do my best, May-Kin. It's actually not that complicated. We had an existing arrangement with a collaborator whereby they had taken a patent license from us and they were paying us royalties on a patent unrelated to Cabilly or just one of the other pieces, another piece of intellectual property we had.

Subsequently, we got into a discussion with this company about licensing some assets from them. What might normally be a licensing deal where would pay them an upfront payment in cash, they asked instead to be forgiven from paying us royalties associated with this patent for a period of time that will be at least three years. It could extend out further into the future, depending upon how that development collaboration goes. Just the economics, we felt, were sensible for us. We agreed to do the collaboration that way.

From an actual logistical standpoint, no money changed hands, and we licensed these other assets. From an accounting standpoint, that's treated as an exchange of assets. So what we had to do was to try and value what we had forgiven. So the present value of three years' worth of expected royalties and booked that as royalty revenue, and then similarly, though no cash had changed hands on the R&D side, value the appropriate payment or payments equivalent that we'd made to license the assets.

Indeed, as you are asking, that will reduce our royalties over the next three years relative to what they would have otherwise been, if we hadn't done this deal.

May-Kin Ho - Goldman Sachs

But it will just be about $20 million a year?

David Ebersman

It's the present-value number, but that doesn't change materially, what you said, yes.

Operator

Our next question comes from Jason Kantor - RBC Capital Markets.

Jason Kantor - RBC Capital Markets

Could you give us some idea of when we might see the survival data for AVAIL? You had a nice slide in there about the CD40 program. Can you go through how you are thinking about prioritizing the upcoming studies, and when you might be starting your next most advanced trials with the CD40 antibody?

Sue Hellmann

Was that one question? That was good.

Jason Kantor - RBC Capital Markets

It was.

Sue Hellmann

A really, really long question. But I think I remember the Part A of the three-part question was about AVAIL and the timing of the survival data. Our expectation currently is that Roche would be in a position to update survival by mid-2008, somewhere in there. So that's our expectation on survival for that trial.

Turning to anti-CD40, it is early in the program for us to prioritize the indications for anti-CD40. I would reemphasize that really the reason to do the deal was what we saw as really promising activity in non-Hodgkin's lymphoma. So, based on likelihood of success and what we've seen so far, we're excited about the non-Hodgkin's lymphoma trial. But I think given that most of this is Phase I and early Phase II, it would be very early for us to focus on one indication over another. Was there a third question?

Jason Kantor - RBC Capital Markets

Why not CLL?

Sue Hellmann

I just think it's really early to know how important CLL will be for this molecule. As you know, it has been very difficult to predict outcomes in CLL based on preclinical biology or even very early results. So as I said, the one where we feel good is where we've seen data in NHL. But no reason not to do CLL, but that would be a clinical data-driven decision.

Operator

Our next question comes from Geoff Meacham – JP Morgan.

Geoff Meacham – JP Morgan

A question for you on Avastin in hormone refractory prostate cancer. Can you give us an update as to where you are with enrollment with the CALGB study? I think it was initiated two years ago. Then, if you can, any interim analysis on the primary endpoint overall survival?

Sue Hellmann

Why don't we go to the next question and come back to that one, so I can look up the answer. I don't know the answer off the top of my head in terms of enrollment or the interims for that. So if we go to the next question, I'll come back and answer your question.

Operator

Our next question comes from Geoffrey Porges - Sanford Bernstein.

Geoffrey Porges - Sanford Bernstein

Sue, I'm going to keep you busy. Just related to Avastin in breast cancer, first, could you give us a sense of what your expectations for the FDA's review are for the data that you're submitting to them in August for the metastatic breast cancer trial? When do you think you might be in a position to initiate an adjuvant breast cancer study Phase III trial with Avastin? Thanks.

Sue Hellmann

The answer to your first question is we would request a six-month review, but we have not completed the discussions with FDA on this. Our next milestone really is to submit the data, and FDA will let us know the timelines post-submission of the data in August. So really, the key event is the submission of the data and having gone through the review. But based on August, we would expect an approval in the first half of next year. Whether it's a six or a 10-month review, we will clarify with the agency.

As I mentioned, we will be presenting the pilot study of Avastin in the HER2-negative adjuvant setting at the San Antonio breast cancer meeting. We expect that to happen, and we're on the brink of initiating trials with Avastin, the Phase III definitive trials in breast cancer. The first adjuvant study that was started up in last quarter was in lung, and soon to follow will be the breast in HER2-negative. There will subsequently be a HER2-positive study that's planned as well. But we're right at the brink of initiating both those trials.

Geoffrey Porges - Sanford Bernstein

So they could start in the next quarter or so?

Sue Hellmann

Yes. The next quarter would be the timeline in terms of the ECOG study; that's nearly 5,000 patients. That's HER2-negative breast cancer, and then there's a Roche ex-U.S. trial as well.

Geoffrey Porges - Sanford Bernstein

Thank you.

Sue Hellmann

You’re welcome. Let me come back to the CALGB study in prostate cancer. That's a trial that is CALGB 90401, and that's 1,020 patients. As of the first half of this year, enrollment is ongoing. We have not shared the statistical analysis plan for this study, but it would be my expectation that this study, which has an overall survival endpoint, would have a very similar post-enrollment kind of a curve for when people would expect to start event-driven interim analysis that CALGB would do for this trial. But the trial is not fully enrolled yet.

Operator

Our next question comes from Mark Schoenebaum - Bear Stearns.

Mark Schoenebaum - Bear Stearns

I appreciate it. I have a question that I'd really loved to hear Sue's opinion on from the clinical side. Then, if possible, I'd really appreciate hearing what Ian has to say from the commercial standpoint.

That is just your reaction, Sue and Ian, to the Erbitux data presented at ASCO, some of the sub-analyses from the CRYSTAL trial around resection. I know that created a lot of buzz with physicians. I'd love to hear Genentech's position on that data, and obviously how strong you think they are and if you think they will ever really impact the use of Avastin in first-line colon cancer? Thanks a lot. That’s thunder in New York behind me.

Sue Hellmann

Well, we couldn’t hear it. I will comment and let Ian weight in. You know, I always hesitate to comment on other people's data, because it's not our trial. So I'll give you a very superficial opinion, but you should consider it as such, since we didn't carry out the trial and I don't have the dataset.

In terms of the trial, and I'll give my answer as benchmarked by something like Avastin, where we have a really robust, beautiful survival data in first-line metastatic colorectal cancer, the trial of Erbitux was a one-year difference in median progression-free survival without a survival advantage, and in what I understand to be post hoc analysis in a subset of patients, the resection data was presented.

The question I would pose and again, I don't know the answer, because it's not our study, is this another way of looking at good prognostic patients doing better, because patients had to have the disease limited to the liver? So the question I would pose as an oncologist would be are we doing, like with PTK787 and LDH levels, just looking at a post hoc analysis of good prognosis patients and seeing good outcomes? If that's in fact truth, I would be not as excited about that. But I know that this got a lot of attention, and in terms of its clinical importance, frankly, my opinion would be that's limited. But my opinion is based on very small amounts of information that I heard at ASCO.

Ian Clark

You can imagine our thoughts commercially kind of follow that, that the data probably were not particularly overwhelming to anybody and therefore the likely impact of it on Avastin is going to be fairly limited.

It's quite possible some of the patients who might end up on Erbitux as a consequence would have been patients who may not have got Avastin for various reasons, anyway. So at this point, we don't see it likely to be a major threat to us, or even a minor threat to us.

Operator

Our next question comes from Douglas Chow - Caris & Co.

Douglas Chow - Caris & Co.

My question is related to Avastin pricing. If you were to see an increased usage towards the lower dosage of Avastin, do you think Genentech has room for the ability to raise the per-unit price? If you do or if not, what factors are out there in the market that would potentially prohibit you or allow you to do that?

Ian Clark

I think we're a long way away from the majority of the use being at the lower dose. We haven't seen much move in lung; we'll see what happens in AVADO. As Sue mentioned earlier on, we are in the beginning of doing trials at the higher dose in the adjuvant setting, which, if they are effective, could result in the longest duration of use as well. So that's a ways off.

We don't particularly or ever, I think, comment about future price increases, and I wouldn't want to do so here. I would say that, of course, we have not increased the price of the drug at all since launch, and increasingly other folks are increasing their prices, and it is starting to look like pretty good value compared to many other drugs.

Operator

Our next question comes from Adam Walsh - Jefferies.

Adam Walsh - Jefferies

My question is on Lucentis and the Phase III RIDE and RISE trials. Will there be interim looks there? Then, if you can give us an update on the NEI study, Avastin versus Lucentis, where that is, I'd appreciate it.

Sue Hellmann

So I don't know the answer to your question. Let's see if we can look up the study protocol. We have too many studies, and I can't keep them all in my head, I apologize.

So the RIDE and RISE are the DME studies, the diabetic macular edema studies. It's 366 patients. I am not aware that there is any interim analysis in these studies. It's really 24 months to make sure we are seeing sustained vision improvement. So as far as I know, there is not an interim analysis. Obviously, we would always have a study if there were an untoward safety event. But there would not be a stopping rule in this trial for efficacy. It would be very similar to the AMD studies we did.

In terms of the Lucentis/Avastin trial, I can't comment on that because that's not a Genentech trial. It's our understanding that the study is going to take place and initiated sometime in the second half of this year, but that's as much as I can tell you.

Operator

Our next question comes from Michael Aberman - Credit Suisse.

Michael Aberman - Credit Suisse

In terms of Avastin, you mentioned that sales were flat in both colorectal cancer and breast cancer. I wonder if you can give us some idea, is the majority of growth coming from lung, in what setting, and what impact might AVAIL have on the growth? What should we expect for Avastin growth going forward between now and potential approval in metastatic breast cancer?

Ian Clark

I think your initial statement was correct. We are not seeing much growth in colorectal or, for that matter, at least in the short-term in breast cancer. I'll come back to that in a minute.

In lung cancer, that's the label indication. We have 30% penetration. We've always said that we think the eligible population is in the order of 50% to 60%. So we're maybe halfway there, so there's a lot of headroom.

Clearly, if you have a parallel drop in dosage, then that could blunt the rate of growth in that particular tumor type. So we'll have to see how the change in dosage may impact it or not. But there's certainly plenty of room to grow within that tumor type.

As far as breast cancer is concerned, we have seen a fairly typical pattern. We saw some adoption as a consequence of the data. We've seen some further adoption as a consequence of the Compendia last year, and it looks as if, at least over a six-month period, it has flattened a little. There's little doubt, therefore, if that's the case, the next jump will come with the label, and we'll see when that is. But it should be sometime in the first half of next year, and I think there's a lot of headroom there.

I think this year you'll see growth coming from lung cancer, and there may even be some further lung cancer growth next year. Next year, if the label comes through as we'd expect, we see that to be the major driver of growth.

Operator

Our next question comes from Brian Rye - Janney Montgomery.

Brian Rye - Janney Montgomery

It looked like a nice quarter for Herceptin, especially in light of the current market environment, the competitive environment. I was wondering if you have any qualitative comments on what impact, if any, Tykerb is having on Herceptin?

Ian Clark

I think I tried to cover it a little bit in my prepared remarks. It's very early days. What we can see so far is that the use is pretty much in its label indication so that later lines, not even necessarily first-line, often two lines of Herceptin and on. There's certainly some suggestion that some of those patients are patients that might not have received Herceptin. There may have been concerns around cardiotox, there might have been very rapid progression. So in any of those instances, there wouldn't necessarily have been an impact on Herceptin. So far, limited impact. Our conclusion around the data from ASCO was that it didn't necessarily change that position for the time being.

Operator

Our final question comes from Shiv Kapoor - Montgomery & Co.

Shiv Kapoor - Montgomery & Co.

I just wanted to ask your opinion on collaboration. This year, we have seen five collaborations that you've signed, maybe a couple more. The last time we saw so many collaborations that I can remember was 1999.

I've got a couple of questions. One, are doing anything differently from what you've done in the past, strategically, in terms of choosing who and what to collaborate?

Second, could you give us the rationale for the two most recent collaborations, the one with Abbott and the other one with Tercica? It seems at first glance that these are highly competitive markets.

Sue Hellmann

Let me start, and maybe Art may want to add to my comments. What we've done within business development in the last three years is work in very close collaboration with the R&D groups, particularly in research for early stage but also with the clinicians.

What we start with is the science, so the deals are driven by what we think are scientifically important targets and a wish to be extremely competitive, either first in class or best in class. If we can do that internally with targets of interest, we go internally. If someone else has done great science that we think will contribute to targets of importance, particularly in oncology and immunology or in tissue growth and repair, then we do a collaboration.

So the deal flow comes and goes mainly based on the diligence and negotiations and the targets, but it all starts with science. The two recent deals, the Abbott deal and the Tercica deal, in the Abbott deal, as Art mentioned, was really driven by our deep knowledge in apoptosis and anti-angiogenesis, and we thought these were great targets and great molecules.

The Tercica deal really builds on our long-term knowledge, understanding and investment in the growth hormone/IGF-1 area.

So I think they are both strategic deals, driven by scientific interest in targets we want to go after. Art, I don't know if you have any additional comment?

Art Levinson

I think Sue covered it quite well. The only thing I would add is that we are constantly, on a regular basis, and actually once a year we take a day or two time out on a formal basis to evaluate the scientific opportunities, and what kind of deal structures are potentially out there, with a reconciliation with our own internal pipeline.

So, as you know, we made a decision several years ago, based on what we saw as huge promise with molecules such as Avastin, Herceptin, Rituxan in the immunological space, to invest extremely heavily in Phase III programs. By and large we're really very pleased with those types of decisions. It made very little sense for us, for example, to look at even what might be a very promising Phase III candidate out there that we would have to in-license. So we put the emphasis during those years on the Phase II/Phase I and research molecule.

So we're constantly adjusting, and we see where we are unusually strong versus maybe only kind of strong in terms of our own pipeline, and we reconcile the opportunities with that. We are continuing to see opportunities on the technical side, particularly in research and early development. So we are seeking those.

In the case of, for example, Abbott, just to go a little bit further in my comments. There's a molecule here that is an antagonist in the angiogenic pathway that looks like it might have a lot of potential. We did not start ourselves an internal small molecule program in the angiogenesis area ten years ago like many other companies did. We didn't want to miss that in the event that one of these molecules had some great potential, either as a standalone drug or potentially and I think maybe excitedly, as a possibility in combination with Avastin.

So we're opportunistic on that level as well, and actually we are very pleased with what we have come up with in terms of the deal flow in the last 12 months.

Susan Morris

With that, we would like to thank you all for joining us. If you have more questions, feel free to call myself or Diane Schrick. We will be back in the office shortly.

TRANSCRIPT SPONSOR

Wall Street Horizon Logo

Do you get frustrated during earnings season?

Have you had trades go south because of bad earnings dates?

We know what it's like. We’ve been there. We’re Wall Street Horizon and we work with some of the largest firms on Wall Street.

Founded by former Fidelity Investments executives, we understand the power of trading on good information and the pain and suffering of trading otherwise. We obsess about earnings and economic events calendars so you don’t have to. Accurate. On time. Guaranteed.

Let us help.

Get Smart

Get Wall Street Horizon.

View our Free 30-day trial for investment professionals

To sponsor a Seeking Alpha transcript click here.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Genentech Q2 2007 Earnings Call Transcript
This Transcript
All Transcripts