Genentech Inc. (DNA), coming off a run of recent successes in drug trials, on Monday reported quarterly profit rose 73 percent on surging sales of its cancer treatments.

The world's second-largest biotechnology company said it now expects 2005 earnings growth, excluding items, of at least 35 percent over 2004 — up from its previous forecast of at least 30 percent. Genentech shares, up 55 percent year-to-date, rose 1.6 percent to $84.85 in after-hours trading.

The company is "in an unusually exciting stage of transformation and growth," Chief Executive Arthur Levinson (search) said during a conference call.

Between mid-March and early May, Genentech announced positive data from five pivotal-stage clinical trials, including studies of cancer drugs Avastin (search) and Herceptin (search).

"The focus will now be on their ability to execute and deliver on sales," said Jennifer Chao, an analyst at Deutsche Bank (search).

Genentech posted a second-quarter profit of $296.2 million, or 27 cents per share, compared with a profit of $170.8 million, or 16 cents, a year ago.

Revenue rose 35 percent to $1.53 billion.

Excluding items, Genentech earned 30 cents a share, exceeding expectations of analysts, who on average were looking for 26 cents per share, according to Reuters Estimates.

The company's stock trades at 74 times projected 2005 profit, compared with No. 1 biotech company Amgen Inc.'s price-to-earnings ratio of 24.

Genentech, which last month said it was boosting production capacity to meet rising demand for its cancer drugs, said U.S. sales of colon cancer drug Avastin surged 85 percent from a year ago to $245.7 million for the quarter — a 21 percent increase over the first quarter.

Avastin — the first approved drug that works by cutting off blood supply to tumors — has been shown to fight lung and breast cancer and is being tested for other cancers as well.

Sanford Bernstein analyst Geoff Porges called the results "very strong" with the 21 percent quarter-over-quarter Avastin growth reflecting an increase in off-label use by doctors.

He said sales of Avastin will continue to accelerate, especially since trials in breast and lung cancer used twice the dose of Avastin that is used to treat colon cancer.

He expects sales of Avastin to double this year and again in 2006.

Ian Clark, general manager of Genentech's oncology program, estimated that off-label usage of Avastin accounted for about 10 percent of second-quarter sales, compared with an historical rate of 5 percent.

"We still had solid growth in the colorectal market," he said. "Further usage will depend on label expansion and reimbursement. We are at the front end of that process."

Genentech's second quarter sales of breast cancer drug Herceptin rose 29 percent to $152.4 million.

Herceptin has also seen recent clinical success with the drug demonstrating an impressive reduction in breast cancer recurrence when used at an earlier stage of the disease than it is currently approved for in combination with chemotherapy.

Porges expects Herceptin sales, which rose 8 percent last year, to rise 43 percent this year and another 40 percent next year.

The South San Francisco, California-based company said it expects to seek additional U.S. Food and Drug Administration approval for the earlier stage use of Herceptin in the first quarter of 2006.

In the meantime, the company is also discussing with the FDA issuing a letter to health care providers about the cardiac risks associated with Herceptin, said Susan Hellmann, Genentech's president of product development.

Hellmann said the company has plans to file in the fourth quarter of this year for FDA approval of Avastin for second- line colon cancer, followed by applications next year for breast cancer and lung cancer.

The company also said it expects to begin by the end of 2005 to seek regulatory approval for Lucentis, which has been shown to improve vision in patients with age-related macular degeneration, the leading cause of blindness in older adults.

Genentech's second quarter U.S. sales of Rituxan for non-Hodgkin's lymphoma rose 15 percent to $450.3 million, while new lung cancer treatment, Tarceva, had sales of $70.2 million, a 47 percent increase over the first quarter.

The FDA is expected to decide by Nov. 2 on whether Tarceva can be sold to treat pancreatic cancer.

Genentech, which is majority owned by Swiss drugmaker Roche Holding AG, said total sales for the quarter rose 39 percent to $1.27 billion.