January 21, 2009 / 2:35 PM / 10 years ago

UPDATE 3-Genentech says April Avastin trial data possible

(Adds new VP, discovery research; updates share price)

Toni Clarke

BOSTON, Jan 21 (Reuters) - Genentech Inc DNA.N said on Wednesday that results of a trial of its cancer drug Avastin in colon cancer patients who have undergone surgery could be known as early as mid-April.

The 2,710-patient study, known as NSABP C-08, is being conducted by the National Surgical Adjuvant Breast and Bowel Project and sponsored by the National Cancer Institute, and its results are considered important to Genentech’s future market value.

If the statistically required number of patients whose disease progress had not occurred by mid-April, then the NSABP would continue the study, Genentech said in a filing with the U.S. Securities and Exchange Commission. Under those circumstances the results would most likely be known later in the second quarter of 2009, the company said.

Its shares rose 0.7 percent to $82.71 in afternoon trading on the New York Stock Exchange.

Genentech, the world’s second-biggest biotechnology company after Amgen Inc (AMGN.O), is majority-owned by Swiss drugmaker Roche Holding AG ROG.VX. Roche is seeking to acquire the 44 percent portion of Genentech it does not already own.

So far, Genentech has not agreed to a deal; and one reason for the delay, according to Alexandra Hauber, an analyst at J.P. Morgan, could be that Genentech’s board is waiting for the results of the NSABP trial in the hope that positive results would force Roche to substantially increase its bid.

Genentech rejected a $43.7 billion, or $89-a-share, offer and the questions on investors’ minds are whether Roche will increase its offer, and by how much.

“Positive headline data should add an incremental $6 to the $89 offer,” said Hauber, noting that some investors see positive data as potentially adding $20 a share in value.

“We estimate a positive C-08 study would require Roche to increase their offer to the mid-nineties - a level that is probably already priced into the Roche share price,” Hauber said in a research note.

The late-stage, or Phase III study, is designed to test the effect of chemotherapy with or without Avastin on disease-free survival in patients with resected Stage II or III colon cancer.

Avastin is one of the most important drivers of future growth at Genentech. The drug is currently approved to treat metastatic and advanced colorectal cancer. The NSABP study is designed to show it can delay disease progression in an earlier setting after tumors have been removed by surgery.

Separately, Genentech named Jennifer A. Doudna to the position of vice president, discovery research. The company said she will oversee the departments of protein chemistry and structural biology.

Doudna joins Genentech from the University of California, Berkeley, where she has been a professor in the Department of Molecular and Cell Biology and the Department of Chemistry. (Reporting by Toni Clarke, editing by Gerald E. McCormick)

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