West Coast Editor

Observers must wait for an upcoming scientific meeting to find out how justified is ImClone Systems Inc.'s stock boost from positive, though sketchy, Phase III results with its EGFR-targeting Erbitux against non-small-cell lung cancer.

But some on Wall Street already seemed nervous about the drug's threat to Avastin, the VEGF inhibitor from Genentech Inc., and ImClone's stock (NASDAQ:IMCL) closed Tuesday at $44.90, up $6.97, more than 18.4 percent, with shares of Genentech (NYSE:DNA) ending at $78.30, nicked by 85 cents.

The pivotal, 1,100-patient study with Erbitux (cetuximab) done by New York-based ImClone's German partner, Merck KGaA, showed that the drug when combined with chemotherapy (vinorelbine plus cisplatin) met the primary endpoint of increasing overall survival in advanced NSCLC compared to chemo alone. The trial is known by the rough acronym FLEX, which stands for "First-Line Treatment for Patients with EGFR-Expressing Advanced NSCLC."

No specifics of the data were disclosed, however, and analyst Christopher Raymond with Robert W. Baird & Co. wrote in a research report on Genentech that "the devil is in the details" - or might be.

Brian Rye with Janney Montgomery Scott LLC pointed out that the market could accommodate more than one biologic agent to combine with chemo in first-line NSCLC. Avastin is taking about half the total market share - about two-thirds of the nonsquamous subset for which the compound is approved - leaving "ample room for Erbitux to garner meaningful sales without encroaching on Avastin," he told BioWorld Today.

Earlier this summer, a Phase III study with Erbitux in NSCLC by ImClone's U.S. partner, Bristol-Myers Squibb Co., also of New York, failed - but that trial used a different chemo combination, paclitaxel and carboplatin (which is more popular here) and switched protocol when the 600-patient study was half enrolled, which might have skewed the outcome. (See BioWorld Today, July 13, 2007.)

Erbitux is approved for colorectal cancers and head and neck tumors. Genentech's Avastin (bevacizumab), cleared for colorectal and lung cancers, has set the bar high in NSCLC, although patients with some subtypes of NSCLC can't use the drug, and those subtypes were among patients enrolled in the Merck's FLEX study.

Ultimately, Avastin and Erbitux might be used in combination with each other as well as chemo, though dual biologics fizzled in March when Thousand Oaks, Calif.-based Amgen Inc. tried its anti-EGFR monoclonal antibody Vectibix (panitumumab) with Avastin and chemo in first-line colorectal cancer. Vectibix was approved about a year ago as a third-line therapy. (See BioWorld Today, March 26, 2007.)

Analyst Jennifer Chao with Deutsche Bank noted that overall survival with Avastin was 12.5 months vs. 10.5 months with the control, chemo-only arm. "FLEX is likely to raise Erbitux visibility and use, but to what extent is unclear" without more information, she told BioWorld Today. Bear, Stearns, where analyst Mark Schoenebaum covers ImClone, upgraded the firm's rating Tuesday from "peer perform" to "outperform."

Raymond remained strong on Genentech, declaring that some investors are too worried about results from the AVAiL study, disclosed at the June meeting of the American Society of Clinical Oncology.

Data from that trial showed Avastin might work better given at a dose lower than the 15 mg/kg approved for metastatic disease. Sponsored by Avastin partner F. Hoffmann-La Roche Ltd., of Basel, Switzerland, the trial found that Avastin significantly increased progression-free survival in advanced NSCLC at both doses tested in combination with chemotherapy, but patients who got the lesser dose, 7.5 mg/kg, showed greater improvement (33 percent) than those receiving 15 mg/kg (22 percent) over the chemotherapy-only arm.

"Upside to Avastin revenues may be seen in Q307, providing investors some relief," Raymond wrote in his report.