By Bill Berkrot

U.S. sales of the cancer drug Avastin, widely considered the most important barometer of Genentech's fortunes, rose 21 percent to $731 million, falling short of analyst estimates of about $740 million.

Avastin, originally a colon cancer treatment, is now being used against breast and lung cancer as well. Sales could expand further should the company gain approvals in the United States and Europe for Avastin in brain cancer.

The world's second-largest biotechnology company posted a net profit of $931 million, or 87 cents per share, compared with a profit of $632 million, or 59 cents per share, a year ago.

Excluding items, the company earned 95 cents per share, missing analysts' average expectations by 1 cent, according to Reuters Estimates.

Genentech forecast 2009 earnings of $3.55 to $3.90 per share, excluding items. Analysts are looking for $3.92 per share for the year.

With its forecast, Genentech said there are a large number of business uncertainties that make it a difficult year to forecast.

"For 2009, the non-GAAP earnings is a big range, and it's not that attractive a range," said Cowen & Co analyst Eric Schmidt. But he noted, "with this company, there isn't a lot of quarter-to-quarter focus any more. It's more about what Roche might do."

Swiss drugmaker Roche Holding AG , which records sales of Genentech products outside the United States, is expected to soon make a sweetened offer for the 44 percent of Genentech it does not already own after the U.S. biotech giant rejected an initial $89 per share offer in July.

Revenue for the quarter rose to $3.71 billion from $2.97 billion a year ago, topping Wall Street estimates of $3.66 billion.

U.S. sales of Rituxan for non-Hodgkin's lymphoma and rheumatoid arthritis rose 14 percent to $677 million, in line with expectations. The drug recently showed promise as a leukemia treatment in a clinical trial, potentially paving the way for future expanded use.

U.S. sales of breast cancer treatment Herceptin edged up 3 percent to $336 million. Analysts were looking for $352 million, but the company had cautioned that third quarter results had been helped by increase in one wholesaler's inventory that was likely to hurt fourth-quarter sales.

Genentech shares fell 0.7 percent to $84.50 in after-hours trading from their New York Stock Exchange close at $85.08.

(Additional reporting by Lewis Krauskopf)

(Reporting by Bill Berkrot; Editing by Gary Hill)