Biotech Values

[DewDiligence]

WSJ on Tarceva:

[David Hamilton’s article from Tuesday’s paper does a good job of highlighting just how minimal the clinical benefit of Tarceva is likely to be in the indicated setting. I find it hard to see how society can justify spending $25-30K per patient for a median increase in survival of one or two months. If there were biomarkers to indicate which patients would do much better than the median, the cost/benefit tradeoff would be vastly different, but such screens are not yet available.]

http://online.wsj.com/article/0,,SB108299022724293492,00.html?mod=yahoo_hs&ru=yahoo

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Experimental Drug Tarceva
Extends Lung-Cancer Survival

Not a Cure, But Treatment
Shows Promise in Test;
OSI, Genentech, Roche Rise

By DAVID P. HAMILTON
Staff Reporter of THE WALL STREET JOURNAL
April 27, 2004

The experimental drug Tarceva extended survival in lung-cancer patients, a potential boost for a new class of cancer drugs that take specific aim at tumor cells.

Although Tarceva isn't a cure for cancer, the drug potentially offers a new treatment option for terminally ill patients. Tarceva is also the first in a much-anticipated class of new drugs that block a protein called epidermal growth-factor receptor, or EGFR, to show it can prolong patient survival.

Such drugs hold the potential to attack cancer cells directly, avoiding toxic side effects such as nausea and hair loss associated with traditional chemotherapy.

The drug was discovered by OSI Pharmaceuticals Inc. and licensed by Genentech Inc. for the U.S. and Roche Holding AG for other markets. Roche owns a majority stake in Genentech.

At 4 p.m., Genentech was up $13.77, or 12% to $131.99 in New York Stock Exchange composite trading. OSI shares more than doubled in price to $91.10 on the Nasdaq Stock Market, rising $52.96.

The surprising news boosted the stocks of all three companies, especially OSI. For Genentech, it was the second unexpected success in the past year. The South San Francisco, Calif., company's stock had already more than tripled since last May, when Genentech reported another new-style cancer drug, Avastin, helped colon-cancer patients live longer.

Genentech didn't release full details of the Tarceva results, which it intends to present in June at the annual meeting of the American Society of Clinical Oncology. Some analysts urged caution interpreting the summarized trial results, noting that without more details, it is impossible to know whether Tarceva's survival improvement is clinically meaningful.

The Food and Drug Administration has approved two other EGFR inhibitors over the past year, AstraZeneca PLC's Iressa for lung cancer and ImClone Systems Inc.'s Erbitux for colon cancer. Neither drug has yet been proven to help cancer patients live longer, although both have shown some ability to shrink tumors.

The Tarceva trial, sponsored by OSI, involved 731 patients in the U.S., Canada, Germany and several other sites in Asia, Africa and South America. These patients were diagnosed with non-small-cell lung cancer, which accounts for roughly 80% of all lung-cancer cases. All had previously failed one or more traditional chemotherapy treatments, and on average would be expected to live for only four to six months, Genentech officials said. [In other words, the 33% improvement in median survival that was the primary endpoint of the Tarceva trial might be an increment of as little as 1.5-2 months, as explained below.]

Patients were randomly assigned to receive either Tarceva or a placebo. Patients in the Tarceva group not only lived longer on average, but also their symptoms deteriorated at a slower pace, they went longer without growth or spread of their cancer, and they were more likely to see their tumors shrink. Side effects among patients on Tarceva included skin rashes and diarrhea, which Genentech officials termed "mostly mild to moderate."

Genentech didn't say exactly how much longer the Tarceva patients lived. Officials did note that the trial was designed to detect a survival improvement of at least 33%, so the drug likely added at least five to eight weeks of life.

While early studies suggested EGFR inhibition could be an important weapon against cancer, the drugs have proven much trickier when tested in larger trials. Iressa, for instance, shrank tumors in about 10% of late-stage cancer patients, but failed to produce a survival advantage in patients newly diagnosed with the disease. Tarceva also failed an earlier large-scale test in newly diagnosed lung-cancer patients last October.

Some cancer specialists have speculated that EGFR inhibitors may fail to work well when combined with traditional chemotherapy, one reason OSI tested Tarceva as a single agent.

Genentech and OSI said they plan to file for FDA approval of Tarceva by the end of the summer.

Merrill Lynch analyst Eric Ende downgraded the shares of OSI, based in Melville, N.Y., to "hold" from "buy" after they rocketed on the Tarceva news. Mr. Ende said the trial doesn't prove that Tarceva works any better than Iressa or standard chemotherapy, and warned that the market for EGFR inhibitors might shrink dramatically if researchers can figure out which patients are most likely to benefit from treatment
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