Genentech Drug Faces Competition

Genentech Inc.’s lung cancer drug Tarceva stole the spotlight at a big medical meeting here over the weekend, but it might not bask there for long.

A company study showed that Tarceva, a once-daily pill, added two months to the lives of lung cancer patients who had failed to improve after trying at least one other medication -- an outcome no better than what’s seen with rival chemotherapy drugs.

Now, with Tarceva poised to reach the market as soon as this year, a huge sales competition awaits South San Francisco-based Genentech.

Tarceva’s main rival will be Aventis’ Taxotere, a $1-billion-plus product and the only drug approved as a second treatment for lung cancer. By the time Tarceva reaches the market, however, it will probably also face Eli Lilly & Co.’s Alimta, another chemotherapy drug.

In clinical trials, patients have lived about seven months after taking Tarceva, Taxotere and Alimta.

“It is not clear which treatment is better,” said analyst Jason Zhang of Independent Research Group.

The reaction at the American Society of Clinical Oncology’s annual conference to Tarceva stood in contrast to the reception given last year to another Genentech product, Avastin. That drug, the first to block tumor growth by cutting off blood vessels, was the toast of the event and triggered a huge run in Genentech’s shares.

Genentech and its partner, OSI Pharmaceuticals Inc. of New York, maintain that the relatively mild side effects of Tarceva -- it commonly causes a rash and diarrhea -- give the pill an advantage. Chemotherapy drugs such as Taxotere, by contrast, can deplete white blood cells and leave patients susceptible to infection.

“These patients are very sick and have been through an aggressive round of chemotherapy treatment,” OSI Chief Executive Colin Goddard said. “As a second-line treatment, Tarceva is the better option.”

Indeed, one prominent specialist, Bruce Johnson of the Dana Farber Cancer Center in Boston, said that he would use Tarceva instead of Taxotere largely because the side effects of the Genentech drug appeared milder.

Yet other cancer specialists said it was unclear where Tarceva would fit in.

Thomas Lynch of Massachusetts General Hospital, also in Boston, said he might choose Tarceva for elderly patients who can’t tolerate other chemotherapy drugs. But he did not see a reason to switch all patients to the drug.

Roy Herbst of the M.D. Anderson Cancer Center in Houston suggested that the whole matter could prove academic because the Tarceva trial might not be strong enough to persuade the federal Food and Drug Administration to approve the drug as a second treatment.

Herbst explained that some patients in the Tarceva trial were using the drug as a first-line treatment, while others were turning to Tarceva as a third option.

Were Tarceva to become a third-line treatment, it would go head to head with Iressa, a nearly identical drug from AstraZeneca that is already sold for lung cancer patients with no other options. Both drugs deactivate a protein called epidermal growth factor, which spurs the cancer to spread.

AstraZeneca has not yet shown that Iressa can extend the lives of patients, but many doctors nonetheless believe it is equivalent to Tarceva. Lynch, for one, said he saw no reason why Iressa would not eventually demonstrate that it too could extend patients’ lives.

“The whole thing is going to come down to a big marketing battle,” Lynch predicted.

Goddard of OSI was confident that Tarceva would be approved as a second-line drug and could compete against all rivals. He said he believed the pill could eventually become a $1-billion product, matching Wall Street forecasts made before the meeting.

Analyst Zhang, however, was more skeptical, putting peak sales of Tarceva at $325 million to $600 million. He predicted that OSI’s stock price would fall today.

The drug is not considered crucial to the overall financial health of Genentech, which boasts a strong lineup of cancer drugs and last year posted total revenue of $3.3 billion. Rituxan, an intravenous medicine for non-Hodgkin’s lymphoma, should enjoy sales of $2 billion this year. Many on Wall Street say the company’s colon cancer drug Avastin could also become a $2-billion-a-year product.

Tarceva is extremely important to OSI, which has no other products and will split U.S. profit on Tarceva with Genentech.

Although Tarceva left some doctors and analysts wanting, it was clear that Genentech had big plans for the pill.

The company presented data from two small but promising studies that combined the pill with Avastin in patients with lung or kidney cancer. Genentech is in the process of confirming the results of those studies in larger trials.

One of the studies, led by researchers at Vanderbilt-Ingram Cancer Center in Nashville, found that lung cancer patients who took both drugs lived an average of 12 months, compared with 6.7 months in the much-anticipated trial in which patients took only Tarceva.

The results of the combination trial were encouraging to Genentech, particularly because Avastin failed to help lung cancer patients in an earlier trial. Gwen Fyfe, Genentech’s vice president for oncology, said patients with a specific type of lung cancer who did poorly in the earlier trial were excluded from the test of the combination drugs.

In the second study, researchers at the Sarah Cannon Cancer Center in Nashville reported that half of the 58 kidney cancer patients who received the drugs were alive after one year and 12 patients saw their tumors shrink. That is an uncommon outcome in kidney cancer.

Fyfe said Genentech and the National Cancer Institute were collaborating on a second kidney cancer study, this one in a trial that combines Avastin with a pill from Pfizer Inc. The drug, developed at Pfizer’s labs in La Jolla, has shown early promise in the hard-to-treat disease.

Researchers from Memorial Sloan-Kettering Hospital in New York said at the conference that the Pfizer pill, SU11248, shrank tumors in 24% of patients on the drug, a high percentage. Robert Motzer, a kidney specialist who conducted the trial, said it was the best drug he had worked with.

“We love to test our own drugs,” Fyfe said. “But we also want to do what is best for patients.”