NEW YORK (CNN/Money) -
Genentech could get another lift in sales for a drug-chemo combination already projected as a blockbuster, and women at risk for heart disease could have a safer option for treating breast cancer.
Genentech, Inc. (up $0.62 to $90.25, Research) unveiled data from its fourth test combining Herceptin, its profitable breast cancer drug, with chemotherapy, which showed a reduced risk in causing heart failure compared to its previous studies. Announced on Tuesday, this latest study involves a new mix of chemotherapies, including Taxotere from Sanofi-Aventis (down $0.09 to $40.32, Research), which would be used to halt the spread of early-stage breast cancer after tumors are removed.
When the biotech released its first set of Herceptin-chemo data in April, some analysts projected that the drug's sales would double from its 2004 tally of nearly $500 million, putting Herceptin into blockbuster territory. This latest set of data could give sales another, albeit milder, boost.
"The new data adds $100 million to $150 million on top of that projection [that sales would double] because even though there's less efficacy, it's less toxic to heart patients," said Matthew Geller, analyst for CIBC World Markets Corp.
Other analysts acknowledged that sales could increase, but were reluctant to ramp up their estimates.
"I think the news was positive," said Howard Liang, analyst for A.G. Edwards & Sons, Inc. "It reinforces previously known data that was already very impressive. I have not changed my sales projections."
"The biggest problem with Herceptin is that a small population of people gets heart disease as a result of this treatment, which is a bad outcome," said Jason Kantor, analyst for RBC Capital Markets. "In all fairness, [the new study] didn't seem as effective as the regimen that had heart toxicity, but it's safer. It doesn't change my numbers, but it changes the market opportunity for Herceptin."
Genentech's new data shows less efficacy than other Herceptin-chemo treatments, meaning that it's less effective in halting the spread of early-stage breast cancer. However, the risk of heart attack is also reduced.
"You're in your 40s and you've got breast cancer, but everybody in your family has died of a heart attack," said Kantor, describing the type of person who would most benefit from the Herceptin- Taxotere therapy. "It's clear that for the appropriate people this is going to be the appropriate treatment."
The Herceptin-chemo data announced by Genentech in recent months is phase 3, which is the latest stage in clinical trials. Genentech plans to file an application to the Food and Drug Administration in the first quarter of 2006 for the use of Herceptin with Taxotere chemotherapy. However, analysts said that some doctors will prescribe Herceptin with chemo prior to FDA approval, since the drug itself was approved back in 1998 and the combination-therapy saves lives.
Herceptin is used by women with HER2-positive breast cancer, which includes about one-fourth of women with breast cancer. The drug is generally used to slow the spread of late-stage metastatic breast cancer, prolonging the lives of patients.
Based in South San Francisco, Genentech is one of the world's largest biotechs, with $3.7 billion in 2004 sales. The company is considered a safe haven among biotechs, though some analysts believe its stock is overpriced. Genentech's top-selling product is Rituxan, a treatment for non-Hodgkin's lymphoma with $1.7 billion in 2004 sales.
The analysts interviewed for this story and their firms do not own Genentech stock.
To read the good news about Genentech's drug Tarceva, click here. To read the bad news about its drug TNKase, click here.