Genentech Stock Hit After Drug Study
Genentech Inc. shares fell 12% on Thursday after a study raised concerns about the safety of its experimental Avastin cancer drug and prospects for U.S. approval.
The study’s findings, which analysts said point to side effects such as bleeding and high blood pressure, were supposed to remain under wraps until the American Society for Clinical Oncology’s meeting next month. The society said it is investigating how some investors may have gained access to an abstract of the findings.
Avastin has the biggest sales potential among Genentech’s drugs in late-stage development, analysts said. The drug, the most advanced of a class of cancer medications designed to work by strangling a tumor’s blood supply, was being tested in breast, lung and colon cancer.
“As expected, there were some side effects that we were not overly concerned about,” said Merrill Lynch analyst Eric Hecht in a note to clients. “We would note that the more important efficacy data is not expected to be available until summer.”
Analysts at Friedman, Billings, Ramsey & Co. said that Genentech may need additional studies of Avastin in breast-cancer patients, which may delay a filing for U.S. regulatory approval.
Genentech shares Thursday fell $5.37 to $37.75 on the New York Stock Exchange.
It’s not uncommon for shares of companies to move when abstracts for a medical meeting become available, even though most medical organizations, including ASCO, try to limit discussion of the research before a meeting.
The Genentech data haven’t been released by ASCO in any form. All of the abstracts being presented at the meeting are slated for release to ASCO’s 18,000 members sometime next week and are being stored on a separate server from the one that runs the group’s Web site, ASCO officials said.
“I’m getting calls [from people] saying they have seen the abstracts but they won’t provide a copy or tell me where they came from,” said Michelle Kirkwood, a spokeswoman for ASCO. “We are going the other route now, checking our servers and making sure our security hasn’t been breached.”
Genentech said it has been contacted by several people who say they have seen the ASCO abstracts. The company hasn’t discussed or distributed any information about its presentation, according to Genentech spokesman Neil Cohen.
Cohen wouldn’t give any details about what the company would present, citing ASCO’s policy of removing an abstract from the program if a company discusses its contents before the meeting.
