UPDATE 3-Abraxis cancer drug meets late-stage trial goal

* Drug improved response rate in lung cancer patients

* Co plans to file for approval in lung cancer in 2011

* Shares rise as much as 36 pct (Adds analyst comments; updates stock movement)

BANGALORE, March 17 (Reuters) - Abraxis BioScience Inc ABII.O said a late-stage study testing its cancer drug Abraxane in non-small cell lung cancer met the main trial goal, sending its shares up as much as 36 percent.

The trial, which was comparing the drug with Taxol injection, showed Abraxane significantly improved overall response rate in first-line treatment of advanced non-small cell lung cancer patients. Both the drugs were administered in combination with chemotherapy drug carboplatin.

Abraxane is a chemotherapy treatment that is already approved for use in metastatic breast cancer. Taxol -- sold by Bristol-Myers Squibb Co BMY.N -- is also known as paclitaxel and is generically marketed by various other drugmakers.

“The issue is that Taxol is generic, so a drug that beats Taxol on response rate doesn’t really help a lot if it can’t have some other kind of benefit,” Merriman Curhan Ford analyst Michael King said.

“So I believe, Abraxane will have to show a benefit either in progression-free survival or overall survival ... something better than just response rate in order to have a commercially attractive opportunity,” he said.

Abraxis expects to file for an approval of the drug as a treatment for non-small cell lung cancer during 2011.

Abraxane uses albumin, a human protein, to deliver the chemotherapy, as opposed to other chemotherapy drugs that use chemical solvents.

This eliminates the need for premedication with steroids or antihistamines for hypersensitivity reactions that are caused by chemical solvents.

The trial with 1,052 patients was done according to a special protocol assessment with the U.S. health regulator, the company said in a statement.

The special protocol assessment (SPA) provides a company with a written agreement that the design and analysis of the trial are adequate to support a marketing application submission with the U.S. health regulator.

“The likelihood of approval is high as the study was done according to an SPA ... but without a progression-free survival the clinical utility is limited given a premium cost,” Merriman’s King said.

“So in a cost-conscious environment, if you have a generic Taxol, which works well and is very cheap, there is no real incentive to use a drug that costs much more than Taxol,” he said.

Lung tumours are the most common form of cancer worldwide and non-small cell lung cancer is the most common form of lung tumours.

“The shares are up as it is a significant commercial opportunity, it could be half a billion dollars or more,” King said. “But the question is, does the reality meet the potential and without the survival data we don’t know.”

Data from the late-stage trial will be submitted for consideration as a late breaking presentation at the upcoming American Society of Clinical Oncology meeting, the company said.

Abraxis shares were up 30 percent to $51.79 in midday trade on Nasdaq. They touched a high of $54.03 earlier. (Reporting by Esha Dey in Bangalore; Editing by Ratul Ray Chaudhuri)