Roche to Market Avastin by Genentech
Swiss drug maker Roche Holding said Tuesday that it acquired rights to sell Genentech Inc.’s promising experimental colon cancer drug Avastin outside the U.S.
Roche owns 59.8% of Genentech, a biotechnology company based in South San Francisco. The Swiss firm has first refusal on international rights to Genentech products, and it already sells Genentech cancer drugs Herceptin and Rituxan abroad.
Avastin could receive U.S. regulatory approval this year. The medication would be the first to treat cancer by pruning the blood vessels that feed tumors.
Analysts believe annual worldwide sales of the injectable drug will exceed $1 billion.
Roche will reimburse Genentech for 50% of the Avastin development costs Genentech already has incurred and will pay 75% of future development costs on the drug.
Genentech is testing Avastin on other cancers.
Roche also will pay Genentech a royalty on foreign sales of Avastin. Financial terms of the deal weren’t disclosed.
Roche’s tab is high because the company did not exercise its option early in the development of Avastin. Roche in 2000 paid Genentech $10 million to extend its option on Avastin. At that time, many in the investment community expected Avastin to fail in late-stage human tests.
The drug did not improve the survival of breast cancer patients. But in May, Genentech announced that Avastin added five months to the lives of colon cancer patients in a large test. Genentech’s shares have nearly doubled in value since then.
Roche spokesman Richard Simpson said the firm would seek regulatory approval to market Avastin in Europe. The company did not yet know whether European authorities would accept results of Genentech’s U.S. clinical trials, Simpson said. Genentech tested Avastin against a chemotherapy cocktail not typically used in European patients, he said.
“We are very excited about this agreement,” Franz B. Humer, Roche chairman and chief executive, said in a statement.
The deal “confirms the strengths of our decade-long network strategy with Genentech,” he said.
Genentech’s shares touched a 52-week high of $78.19 before closing Tuesday at $76.49, up 94 cents, on the New York Stock Exchange.
