Genentech says Tarceva doesn’t aid Avastin effect

CHICAGO (Reuters) – Genentech Inc. said on Tuesday early
results from a mid-stage trial show that combining lung cancer
drug Tarceva with Avastin works no better than Avastin alone in
patients with advanced kidney cancer, sending shares of Tarceva
partner OSI Pharmaceuticals Inc. down 7 percent.

As a result, the world’s No. 2 biotechnology company said
it will not pursue further studies of the Avastin/Tarceva
combination in kidney cancer but will continue to analyze the
results of the study.

The companies continue to enroll patients in a Phase 3
trial designed to test the combination of the two drugs in lung
cancer patients, Genentech spokeswoman Colleen Wilson said.

Genentech had hoped that Avastin, which works by cutting
off blood supply to tumors, when combined with Tarceva would
add to the progression-free survival of patients and improved
response rate of Avastin alone.

Preliminary analysis of data from the 104-patient study
found that receiving Avastin plus a placebo resulted in
progression-free survival and response rates similar to those
achieved with the drug combination, Genentech said.

“We consider today’s announcement to be the death of the
prospects for widespread use of Avastin plus Tarceva in renal
cell carcinoma,” Rodman & Renshaw analyst Michael King said in
a report.

He had previously expected Tarceva sales for the
combination therapy to reach $9.1 million in 2010.

Genentech said it was encouraged by the duration of
progression-free survival seen in patients treated with Avastin
in this and previous studies in kidney cancer.

Avastin is currently approved only to treat colon cancer.
But the company has reported encouraging results against
several other tumor types and oncologists are already using
Avastin to treat some forms of lung and breast cancer on an
off-label basis.

OSI’s fortunes are far more dependent on Tarceva’s
performance than is Genentech.

Tarceva sales growth has been disappointing, but OSI
earlier this month expressed confidence in the drug’s long-term
prospects for its flagship drug.

The company is awaiting a decision by U.S. regulators on
its application to sell Tarceva to treat pancreatic cancer.

Lazard Capital Markets on Tuesday cut its price target for
OSI shares to $40 from $45, but maintained its “buy” rating on
the stock.

OSI shares closed down $2.04, or 7.9 percent, at $23.65 on
Nasdaq, while Genentech shares were up 63 cents at $84.83 on
the New York Stock Exchange.

(Additional reporting by Bill Berkrot in New York and Deena
Beasley in Los Angeles)