Roche may clinch Genentech before key Avastin data

By Deena Beasley - Analysis

LOS ANGELES (Reuters) - Roche AG (ROG.VX) may be seeking to seal its bid for the 44 percent of Genentech Inc DNA.N it doesn't now own before clinical trial results dramatically boost the sales potential of Genentech's jewel, the cancer treatment Avastin.

However, the extent of new uses for Avastin that will stem from the clinical results is still an open question -- leaving uncertain Genentech's ultimate worth to Roche before the study is released.

Annual sales of Avastin already have soared to $2.3 billion in the U.S. alone, but some analysts say they could more than double if the drug showed it could help prevent recurrence of the disease in early-stage cancer patients.

Final results of Genentech's first study looking at such uses are due next year. Most analysts expect the deal to be finished before then, even though Roche is still widely expected to need to raise its $43.7 billion bid.

Avastin is designed to cut off the blood supply to tumors by starving them of oxygen and is already approved, along with chemotherapy, for patients with advanced cancer of the colon, lung and breast. A month of Avastin treatment costs about

$4,400.

The clinical trial is seeking to show its ability to prevent colon cancer recurrence by wiping out microscopic cancer cells that may remain in the body after tumors have been removed by surgery, known as use in the "adjuvant setting."

"In the adjuvant setting, any regimen needs to accomplish a higher cure rate," said Dr. Roman Perez-Soler, chairman of oncology at the Montefiore-Einstein Cancer Center in New York.

He and others said even a small increase would be significant.

The 2,700-patient trial, funded by the National Institutes of Health, is designed to show whether use of Avastin plus chemotherapy, followed by six months of Avastin alone, results in more patients being cancer free after three years compared with just treating them with chemotherapy.

The next interim review of the study, which is designed to show that Avastin reduces the likelihood of cancer recurrence or death by 20 percent to 25 percent, is slated for November, although such reviews rarely trigger a public release of data.

Approval in the adjuvant setting for colon, breast and lung cancer could add more than $4 billion to annual U.S. sales by 2015, according to Sanford Bernstein analyst Geoffrey Porges.

For that to happen, Avastin would need to show a clear benefit.

Reuters Insight, which tracks industry trends for institutional investors, found earlier this year that 60 percent of polled oncologists would prescribe adjuvant Avastin if the drug were shown to reduce the rate of tumor recurrence by 25 percent.

But another 30 percent said they would hold out for a reduction of at least 50 percent in the recurrence rate.