Genentech Drug Gets Monopoly Rights
Biotech behemoth Genentech Inc. continued its run of good news Friday by announcing that federal regulators granted it special monopoly rights for its experimental cancer drug Tarceva if it is approved to treat brain cancer.
The Food and Drug Administration gave Tarceva “orphan drug status” as part of a federal program to encourage the development of drugs to treat relatively rare diseases, the South San Francisco company said.
Under the Orphan Drug Act of 1983, a company can sell an approved drug with the orphan designation exclusively for seven years; no other similar drug is allowed on the market. The manufacturer also gets tax and fee breaks and access to federal grants.
The FDA hasn’t yet approved Tarceva. Genentech, the world’s second-largest biotechnology company, said it had begun a second phase of human testing of the drug for treatment of malignant glioma, or brain cancer. Tarceva is being tested on patients with lung and pancreatic cancers in separate trials.
The drug is being developed by a partnership that includes OSI Pharmaceuticals Inc. of Melville, N.Y., and Swiss drug maker Roche Holding, which is majority owner of Genentech.
“This is clearly positive,” said Jason Kantor of WR Hambrecht & Co. The orphan designation gives a company “exclusivity in that market from other drugs that are essentially equivalent to yours,” Kantor said. “Since this is a competitive area -- AstraZeneca has a similar drug -- it could be beneficial.”
Genentech’s stock fell 41 cents Friday to $75.39 on the New York Stock Exchange.
The stock has more than doubled this year because of strong sales and in anticipation of approval for a promising colon cancer treatment called Avastin, which analysts believe could hit $1 billion in annual sales. Genentech’s market capitalization is now $39 billion, behind rival Amgen Inc., with a market capitalization of $86 billion. The pair are well ahead of all other biotech companies.
Analysts consider Tarceva to be another potentially important drug for Genentech.
The FDA grants orphan status to drugs intended to treat conditions affecting fewer than 200,000 people a year in the United States; Glioma is the most common form of brain cancer, afflicting about 7,000 people a year.
“There are not a lot of treatment options out there for people with this particular kind of brain cancer,” Genentech spokeswoman Colleen Sweeney said. Orphan drug status helps speed development because “when a drug is applicable to only a very small population, the FDA understands that a pharmaceutical company might have trouble recouping its costs,” she said.
Tarceva is part of a class of experimental drugs designed to block tumor cell growth by disrupting molecular switches called epidermal growth factor receptors, or EGF receptors.
