Genentech says cancer drug study is 'positive'

NEW YORK (CNNMoney.com) -- Genentech announced "encouraging results" from a study involving an experimental ovarian cancer drug.

But at least one analyst who follows the biotech feels that, while the early-stage study's were positive, it failed to meet its critical goal.

Genentech (down $0.31 to $83.72, Charts), based in South San Francisco, Calif., said in a Jan. 4 press release that the experimental ovarian cancer drug pertuzumab had shown "encouraging" and "positive" results in a phase 2 study involving 130 patients.

In this relatively small, early-stage study, Genentech compared patients who took pertuzumab combined with the cancer drug gemcitabine, to those who only took gemcitabine. The company did not release details of the study. Genentech spokeswoman Krysta Pellegrino said the company would release data at a medical meeting at a later date.

But Jason Kantor, analyst for RBC Capital Markets, said in a published note that the Genentech study failed to meet its goal, but that the results were encouraging enough for pertuzumab to possibly move on to more advanced experiments.

"The trial did not meet its primary endpoint, but the results may be good enough to move forward with the program pending results from a similar Roche-sponsored trial," wrote Kantor, in his Jan. 5 note.

Genentech is co-developing pertuzumab with the Swiss drug giant Roche (down $0.08 to $91.24, Charts) and the Japanese company Chugai Pharmaceutical.

Endpoints are the goals by which a clinical trial either succeeds or fails, and the trials of course determine whether a drug will enter the market. Kantor told CNNMoney.com that he hadn't seen the data, and had made his determination based on a conversation with a Genentech employee, and from what he was able to glean from the press release.

"I believe that they did not hit their primary endpoint," said Kantor to CNNMoney.com. "I asked the company that, and they confirmed that with me."

But Pellegrino of Genentech insisted to CNNMoney.com that the pertuzumab study had made its endpoint. She also said she hadn't discussed the matter with Kantor and had not seen his note.

"The endpoint of the study was to estimate what the improvement in progression-free survival would be," said Pellegrino. "I don't think it's accurate to say it missed its endpoint. We met the endpoint of estimating progression-free survival."

Shiv Kapoor, analyst for Montgomery & Co., said that a Genentech representative told him the company had "met their objective," but didn't specifically discuss the endpoint.

"If they're saying they met their objective, then they met their objective," said Kapoor.

Despite Kantor's insistence that the study had missed the endpoint, his impression of the early-stage trial was positive overall, especially considering that pertuzumab studies done in 2005 had shown weak results.

"There is a significant unmet medical need for an effective antibody therapy for ovarian cancer, and positive data for pertuzumab could make it an unexpected blockbuster," Kantor wrote in his note, which included the headline, "Phoenix rising - maybe."

Kantor expects Genentech to release the data for this study at the American Society of Clinical Oncology's annual conference, to be held in Chicago in June.

Genentech is the oldest biotech in the world and is the second-biggest in terms of sales, behind Amgen (up $0.18 to $71.51, Charts), based in Thousand Oaks, Calif.

The analysts quoted in this story do not own shares of Genentech stock. RBC has provided Genentech with non-investment banking securities-related services in the last 12 months. Montgomery does not make a market in the company.

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