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Genentech Inc.'s stock was nicked more than 6 percent Friday by news of a "dear doctor" letter regarding the colorectal cancer drug Avastin, but on Monday showed signs of rebounding from concern that William Tanner, analyst with Leerink Swann & Co. in New York, called "overblown."

The physician letter likely was "prompted by events that have occurred in the commercial setting and have been reported in the [FDA's] MedWatch system" since Avastin's February launch, Tanner wrote in a research note.

South San Francisco-based Genentech's shares (NYSE:DNA) ended Friday at $44.23. The stock regained some lost ground Monday, closing at $45, up 77 cents, possibly as a result of investors buying into the widely respected stock at the lowered price.

"That could be an element of it, but the [biotechnology] group in general looks like it's doing very well," Tanner told BioWorld Today Monday.

The FDA posted on its website Friday the letter sent Aug. 4 by Hal Barron, Genentech's chief medical officer, cautioning about "evidence of an increased risk of serious arterial thromboembolic events including cerebrovascular accidents (stroke), myocardial infarctions, transient ischemic attacks and angina," as well as the risk of "fatal arterial thrombotic events" related to Avastin.

In studies with colorectal cancer patients, the risk of a serious blood clot was "approximately twofold higher in patients receiving infusional 5-FU-based chemotherapy plus Avastin, with an estimated overall rate of up to 5 percent," according to the letter.

The arterial clots occurred at a higher rate in patients more than 65 years of age and who had a history of arterial thromboembolism, noted the letter, which made more specific the rumblings heard from the company in its second-quarter conference call in early July.

"They didn't have the data then," Tanner said. "I don't think this would be unexpected, given the way it works. People understood there are likely to be cardiovascular implications in using the drug." Genentech did not issue a separate statement or news release on the physician letter, which also promised a revision of the Avastin package insert.

"A dear doctor' letter is usually not a good thing, just the headline," Tanner conceded. "But people have to take into account what it's actually going to mean in terms of usage." Avastin patients are "on the verge of dying," and will expire from colorectal cancer, or "there's a small chance they're going to have a thromboembolic event," he said.

"Maybe people forget how toxic chemotherapy [itself] is," Tanner added, pointing to the risk-reward profile of Avastin, even with the new information. "It's much more favorable to the reward side," he said.

Avastin (bevacizumab), a monoclonal antibody, is the first anti-angiogenesis product to hit the market. It chokes off the blood supply to tumors by blocking vascular endothelial growth factor (VEGF), which stimulates new vessel formation. (See BioWorld Today, Feb. 24, 2004.)

The drug sold $133 million in the second quarter, its first full quarter of sales, and Tanner estimated $166 million in the third quarter and $520 million in the fourth. Consultants with MEDACorp, a division of Leerink, predicted the physician letter will have no immediate impact, though doctors likely are to be more selective about which patients are prescribed the drug.

Does the warning signal more trouble ahead for Avastin?

"We've not spoken to anybody who thinks this is the tip of the iceberg," Tanner said, though it's "conceivable" that other VEGF drugs in development might have similar side effects.

He pointed to SU-011248, the oral tyrosine kinase inhibitor from Sugen Inc., a unit of Pharmacia Corp. (now part of New York-based Pfizer Inc.), which is being studied in Phase II trials for colorectal cancer in patients who have failed the standard of care including Avastin. Patients in whom neither oxaliplatin nor irinotecan worked will be given SU-011248 plus or minus Avastin.

Tanner also mentioned PTK787 - from Novartis AG, of Basel, Switzerland, and Schering AG, of Berlin - being tested in Phase III trials against colorectal cancer in combination with first- and second-line chemotherapy. Like the Sugen candidate, PTK787 is an oral VEGF inhibitor that hits more than one target.

The problem with Genentech's drug "doesn't appear to be because it's an antibody," Tanner said. "Avastin is working via a different mechanism [from the other two compounds], but I guess theoretically it's possible you could see" the side effect with those drugs down the line.

Avastin's news was even serious enough to put a small dent in shares of big-pharma partner F. Hoffmann-La Roche Ltd., of Basel, Switzerland, which dipped about 3 percent Friday on the Swiss Stock Exchange. Analysts pointed out the wonder drug is regarded as an important growth driver for Roche.

"I guess things like this are bound to crop up, but I don't think it blindsided anybody," Tanner said.

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