Shares of Genentech Inc. dipped late last week after the company and partner F. Hoffmann-La Roche Ltd. announced that the 7.5 mg/kg and 15 mg/kg doses of Avastin (bevacizumab) produced a similar treatment effect in a Phase III trial in non-small-cell lung cancer (NSCLC).

Investors pressured the stocks amid worries that the data might drive physicians to choose the lower dose, potentially cutting Avastin's price from approximately $8,800 to $4,400 per month, even though the drug is approved only at the 15 mg/kg dose for NSCLC in the United States. Yet analysts did not seem overly concerned about the future of the drug, which brought Genentech $1.7 billion in revenues last year.

To begin with, the Phase III trial was not powered to show a statistically significant difference between the two Avastin doses. It was designed to establish a difference between chemotherapy alone and chemotherapy in combination with either dose of Avastin. And it did. Both Avastin doses significantly prolonged progression-free survival. But there is a "very real possibility that a trial comparing the two doses directly could show a benefit to the larger dose," Christopher Raymond, analyst with Robert Baird & Co. in New York, said in a report.

Additionally, Avastin is approved in the U.S. in combination with a carboplatin-paclitaxel chemotherapy regimen for the treatment of NSCLC. The current Phase III trial utilized a gemcitabine-cisplatin chemotherapy regimen, which is more commonly used in Europe. Raymond added that he "cannot envision U.S. doctors extrapolating these data to the preferred U.S. regimen."

Genentech's manager of product communications, Edward Lang Jr., said partner Roche conducted the trial "for labeling purposes in Europe," where Avastin is not yet approved in NSCLC. He also pointed out that previous trials conducted with the U.S. chemotherapy regimen had examined multiple doses to determine the optimum dose. Since no Phase II trials were conducted previously with the European chemotherapy regimen, examining multiple doses made sense.

Having two different doses of a drug approved with two different chemotherapy regimens is not uncommon. In the U.S., Avastin is recommended at 5 mg/kg with bolus-IFL (Irinotecan, 5-Fluorouracil and Leucovorin) chemotherapy and at 10 mg/kg with FOLFOX4 (Oxaliplatin, Folinic Acid and 5-Fluorouracil) chemotherapy.

Steven Harr, analyst with Morgan Stanley & Co. Inc. in New York, said in a report that fallout from the new Phase III data "should be limited" and noted that Genentech already capped the price of Avastin at $55,000 per year for eligible patients. Although dosing depends on weight, an average estimated cost of $4,400 per month for the 7.5 mg/kg dose comes to $52,800 annually.

Michael King, analyst with Rodman & Renshaw LLC in New York, said in a report that "any decrease in price is likely to be offset by increased utilization as well as increased demand."

On Friday, Roche received a positive opinion from the European Committee for Medicinal Products for Human Use regarding Avastin's potential in front-line metastatic breast cancer.

Lang said a decision regarding European approval in breast cancer is expected around April, and Genentech plans to re-submit the drug to the FDA in breast cancer around the middle of the year. An FDA meeting also is planned for this quarter to discuss the submission requirements for an sBLA for Avastin in renal cell carcinoma, and additional Avastin indications are being explored in clinical trials.

Lang said full data from Roche's Phase III NSCLC trial will be submitted for presentation at the American Society of Clinical Oncology's 43rd annual meeting, June 1-5, in Chicago.

Genentech (NYSE:DNA) traded down $2.23 to close at $85.51 on Thursday, and continued to dip 2 cents on Friday to close at $85.49.