Schering, Novartis Drug Data Fall Short
A potential rival to Genentech Inc.’s cancer drug Avastin stumbled in a clinical trial Monday, sending Genentech’s shares up nearly 10%.
Swiss drug maker Novartis and its German partner Schering have been testing a drug known as PTK-787 as a treatment for colon cancer. The companies said the drug did not extend the time it took cancer to worsen, so-called progression-free survival, when compared with standard chemotherapy drugs.
Schering’s U.S.-traded shares plunged 15%, and Novartis was down 2%.
Like Avastin, PTK-787 was designed to inhibit the growth of blood vessels that feed tumors, a process known as angiogenesis. PTK-787 was thought to have an advantage over Avastin because it was a pill, and therefore relatively easy for patients to take. Avastin is an intravenous drug.
Analysts said the setback for PTK-787 meant that Avastin would be the only cancer drug in a multibillion-dollar treatment niche for at least three years. “Avastin should maintain its monopoly,” Bear Stearns analyst Mark Schoenebaum wrote in a research note.
Avastin was approved last year for colon cancer patients, a market that some on Wall Street believe could be worth more than $1 billion.
At the same time, Genentech is poised to broaden its market for Avastin. Last week it was reported that the drug prolonged the lives of patients with advanced lung cancer in a federally sponsored clinical trial. Analysts said lung cancer treatment represented a $2-billion opportunity for Genentech.
The South San Francisco-based company has been testing Avastin in other cancers, including those of the breast and kidney. The drug, seen as the key to Genentech’s growth, had sales of $550 million in its first 10 months.
Jim Reddoch, an analyst with Friedman, Billings, Ramsey & Co., was bullish about Avastin’s future. “The drug could come to be perceived as a universal add-on to chemotherapy,” he wrote in a research note Monday.
In colon and lung cancer studies, Avastin was administered in conjunction with standard chemotherapy. Genentech has said that the drug is not very effective at fighting those diseases on its own.
Despite the setback for PTK-787, the drug isn’t dead. Novartis and Schering said they were continuing the clinical trial to see whether their drug would extend the overall survival of patients, but the results won’t be known until next year. Action by U.S. and European drug regulators would come after that.
Some analysts doubted that PTK-787 would reach the market as a colon cancer drug. “A survival benefit is highly unlikely,” Schoenebaum wrote.
Progress in the area of angiogenesis has been difficult. The drug class was hailed as a silver bullet in 1998, when researchers at Boston’s Children’s Hospital revealed that an angiogenesis inhibitor cured cancer in mice. But seven promising drugs failed in late-stage human tests before Genentech reported success with Avastin in mid-2003.
Genentech’s shares closed at $58, up $5.49, on the New York Stock Exchange. Schering closed at $66, down $11.75, and Novartis closed down 92 cents at $47.40, both also on the NYSE.
