FDA panel rejects Avastin for breast cancer

NEW YORK (CNNMoney.com) -- A panel of FDA advisors did not support the use of Genentech's Avastin as a breast cancer drug.

Genentech's (Charts) stock dropped about 9 percent on the news before trading was halted.

Experts for the Food and Drug Administration voted 5-4 against approving Avastin as a treatment for prolonging the life of breast cancer patients in conjunction with chemotherapy. This is a non-binding vote that will be taken into consideration by regulators on Feb. 23, when they decide whether to approve Avastin for this use.

Avastin is already FDA-approved as a treatment for colorectal and lung cancer. Sales for the drug, which has been on the market since 2004, jumped by one-third during the first nine months of 2007 to about $1.7 billion.

Genentech spokesman Ed Lang said the vote was close, and that panelists felt there was not sufficient data to prove that the benefit of Avastin as a breast cancer drug outweighed the risk.

"We'll continue to talk to [the FDA] about it," said Lang. He said that his company is already running two additional late-stage studies on Avastin's use as a breast cancer drug. Genentech is also studying Avastin as a brain cancer treatment.

"This is a pipeline opportunity that's lost," said Shiv Kapoor, analyst for Ferris, Baker, Watts. But he added that Genentech will be able to ride it out, even though the biotech could be losing a potential $1 billion in sales.

Kapoor said that Genentech will complete its two other breast cancer Avastin studies next year.

"If [the study results] are positive, the FDA would be compelled to look at those again," said Kapoor. "So this is not the end of Avastin and breast cancer."

Genentech, based in South San Francisco, Calif., is the largest biotech in terms of market capitalization. It is the second-largest in terms of annual sales, behind Amgen (Charts, Fortune 500) of Thousand Oaks, Calif.

Kapoor does not own stock in Genentech and his firm does not conduct business with them.