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Avastin gets off to a flying start

Published on 15/04/04 at 04:33pm

US biotech Genentech's first quarter results have surpassed estimates as the company posted profit growth of 17% to $176.6 million, or 33 cents a share.

The results boosted profit expectations for the year, mainly thanks to the successful launch of Avastin, the novel colorectal cancer drug which exceeded expectations with sales of over $38 million in its first five weeks.

"With the strong performance of a Avastin, we now feel that for 2004 an earning per share increase in the range of 20-25% year-over-year is possible, excluding special items," said Lou Lavigne, Genentech chief financial officer.      

Avastin is first in a class of drugs that inhibit the growth of blood vessels supplying tumours and has demonstrated exceptional life-saving qualities in a wide range of patients in trials.

This strong evidence, combined with gaining a licence for first line treatment at launch, has led analysts to predict Avastin will continue to grow well into the multi-billion dollar revenue range.

A recent survey by NOP World Health found that US oncologists now expect to use Avastin to treat 34% of patients, which would give the drug a remarkable market share after a matter of months.

The survey also asked the doctors their opinions of Erbitux, ImClone and Bristol Myers-Squibb's rival colorectal cancer drug, approved for second line treatment within weeks of Avastin.

"Avastin and Erbitux represent important new treatment options for the 150,000 patients diagnosed with colorectal cancer each year," says Andrea McDonough, senior director of market events for NOP World Health.  "Oncologists have more positive perceptions of Avastin with more than half saying it will significantly change the way they treat metastatic colorectal cancer and about a third saying patients or caregivers have already approached them about trying the new drug.

The poll concluded that uptake of both drugs will be limited by their high price tags, but this will also guarantee rapid revenue growth.

Meanwhile, Genentech's total product sales grew by 28% compared to the same period last year, reaching $763.7 million. In addition to Avastin, oncology products Rituxan and Herceptin were star performers, contributing to a 30% increase in operating revenue to $975.1 million.

Non-Hodgkin's lymphoma (NHL) treatment Rituxan potentially stands to benefit from a therapeutic effect - accidentally discovered by physicians in cancer trials -  on rheumatoid arthritis. The company is now investigating the drug's use for this indication which could boost sales further.

Genentech says it can maintain growth through products generated in-house, distancing itself from any suggestion of co-marketing deals or even a merger a - go-it-alone strategy backed up by a strong pipeline.

Two important new drugs are in late stage development: Lucentis for treating blindness arising from age-related macular degeneration (AMD), and Tarceva for non-small cell lung cancer (NSCLC) and pancreatic cancer. If approved, Tarceva would be the first Genentech product to be offered in pill form, rather than injected.

Clinical trial results are expected to be published over the next 12 months and some analysts predict Lucentis could achieve peak sales of between $500m to $1 billion.

 

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