Editor

Genentech Inc., called the "premier" biotechnology firm by Elise Wang, analyst with Salomon Smith Barney - and Wang is hardly alone in her opinion - stands as one of the more closely watched companies in the biotechnology sector (maybe even the most watched of all), and a spate of news early this month focused even more attention on the firm.

Specifically, eyes were on its pipeline. In an era when investors are pounding the table ever more insistently for products, the Phase III failure of Avastin (bevacizumab) for breast cancer in September raised some eyebrows. Another shoe fell earlier this month when an analyst's report predicted a similar fizzle for the drug in an ongoing Phase III study testing it against colorectal cancer, data from which are expected around the middle of the year.

Mark Augustine, with Credit Suisse First Boston in New York, downgraded Genentech from "neutral" to "underperform," based on data, review of literature and "conversations with key clinicians and researchers," he said in a research report that compared Avastin to "Mighty Casey" - and predicted "a big strikeout" in 2003.

Analyst Winton Gibbons, with William Blair & Co. in Chicago, followed Augustine's note with a research report that noted the stock's weakness, apparently as a result of Augustine's downgrade. Gibbons recommended Genentech as a buy, rating it "outperform." Genentech's stock dipped, then recovered.

The brief dent in the company's share value (about a 6 percent drop to around $33), although it didn't last, is "worth talking about," Gibbons told BioWorld Financial Watch - and so are Avastin and the rest of Genentech's arsenal. Gibbons said he hadn't read Augustine's report but agreed with his ideas about Avastin, though Gibbons has higher hopes for the antibody directed at vascular endothelial growth factor in renal cancer. A Phase III trial is under way in that indication, too.

Avastin's fate, Gibbons said, is "not the point" for Genentech. "If both Avastin and Tarceva fail, I'm not going to say, Who cares?' because that's too flip, but they've still got 12 [more potential products]."

Tarceva (erlotinib HCl, also known as OSI-774), a small-molecule EGFR drug for non-small-cell lung cancer, is the subject of a three-way deal with OSI Pharmaceuticals Inc. and Roche Holdings Inc. The compound suffered along with others in the class when Iressa, London-based AstraZeneca plc's EGFR inhibitor for cancer, failed last year; it's in a 700-patient Phase III trial, among others, as monotherapy to treat second-line or third-line patients with incurable stage IIIB/IV non-small-cell lung cancer for whom standard chemotherapy has failed.

Awaiting FDA approval are Genentech's Xolair (omalizumab), for asthma, and Raptiva (efalizumab), for psoriasis.

It's Avastin, though - and its allegedly low chances in the remaining indications - that has captured the spotlight lately, and this despite Genentech's recent earnings forecast, which included a prediction the company would beat analysts' estimates and repeated the January guidance calling for at least 20 percent earnings-per-share growth in 2003 and 2004.

Gibbons said experts in angiogenesis have led him to believe Avastin works, but works better in early stage disease than later stage, which presents a problem for designers of oncology studies.

Periodic Informed-Consent Debate In An Up' Cycle

"In most cancer trials, it's hard to get informed consent for early stage because you're not the standard of care," he said. An early stage patient whose disease might be attacked by existing, approved drugs would be less likely to try something experimental; it's the later-stage patients with options dwindling who are likely to join the study, Gibbons said.

Steven Joffe, a physician and ethicist with the Dana-Farber Cancer Institute, put it: "Who would sign up for that, or want to sign their patients up for that?"

The informed-consent issue is a tricky one. Although it's hardly the hottest buzz up front at biotechnology forums, it's often debated by legislators, the Biotechnology Industry Organization and the American Medical Association - the latter of which has guidelines that seem simple enough, but might be challenging in practice. And this means more potential difficulty for biotechnology firms with compounds that are expected to show efficacy in the sector patients least likely to sign up for trials, especially in the case of drugs aimed at such a fatal disease as cancer.

"Frankly, the reason [researchers] are doing a trial is not so that patients can get better care than they would otherwise," Joffe said. "We don't know that until the study is over. We're doing it because there's a clinical or scientific question we believe is important."

Issues surrounding informed consent made mainstream media headlines earlier this year when the Fred Hutchinson Cancer Research Center in Seattle settled out of court with the family of a breast cancer patient who died during a clinical trial. Terms were kept secret.

The Seattle Times in March 2001 published a series of articles titled "Uninformed Consent: What patients at The Hutch' weren't told about the experiments in which they died," reporting that more than 20 people died prematurely in two failed studies.

Hutchinson officials said possible problems cited by the Times had been investigated much earlier by the Office of Protection from Research Risks in the National Institutes of Health. The OPRR found that there were no material failures to comply with their policies for protecting patients.

Alvin Lorman, an attorney with Foley & Lardner's Washington, D.C., office, said that "almost invariably, when a clinical trial goes bad, someone claims it's [because of] an inadequacy of informed consent" - although the claim can hardly be proved in court in every instance.

How to handle the informed-consent matter, especially in testing drugs that might work for early stage, serious diseases, is "a complicated, fascinating issue" that crops up every few years, Lorman told BioWorld Financial Watch.

"We're clearly in an up' phase," he added, partly due to the Seattle case and to the case of Jesse Gelsinger, a gene therapy patient who died in 1999 while participating in a University of Pennsylvania study using an adenoviral vector.

"It's not clear to me that [the increased interest] is in response to a sudden discovery that people were being abused right and left," Lorman said. "Especially in cancer, people beat the doors down to get into clinical trials."

One question regarding the hurdles of informed consent involves whether it's vitally important to find drugs for certain early stage conditions - not just because other early stage treatments might be available, but because in some cases the disease itself moves slowly and is not debilitating.

"A great example is prostate cancer," Lorman said. "Most men end up having prostate cancer and die of something [else]." He added quickly that "I don't think there can be any generalization, [since] cancer even at an early stage has an appalling prognosis."

Still, those who question "whether we're overlooking something, simply because of the way the system is set up," have "a perfectly valid point," Lorman said. "It's not inappropriate."

Joffe deals with such questions for Dana-Farber on a regular basis - which doesn't make them any simpler for him or others, he said. Informed consent "doesn't need to be as complicated as people make it out to be," he added, noting that it's a factor when prescribing any treatment, but "the bar is higher [when a clinical trial is involved], and certainly the regulatory obligations to lay out all the details are higher."

At the same time, the detailed disclosure forms are "even painful for me to read, and I'm a physician," Joffe said. "I think to myself, How is the patient going to see the forest for the trees, with four pages of risks?'"

Two Options: Extra Trials, Overseas Research

Difficulties of trial design brought on by informed consent cut both ways; scientists may have trouble finding patients who qualify, and some who want desperately to be included are not. Joffe cited the case of a man whose daughter died of colon cancer, and then his wife was diagnosed with the same disease. Having seen what traditional chemotherapy did to the first victim, they rejected it and sought to enroll the wife in a clinical trial.

"Everywhere they went, they were told they couldn't go into the clinical trials until they had failed the standard [treatments]," Joffe said. "They couldn't find a trial where they were eligible. The system, as it's designed, wouldn't let them." The wife died with no therapy beyond "comfort" treatment.

Joffe said one way companies might get around the challenges of testing a seemingly less-toxic and just as effective (or even more effective) drug that could work in early stage disease such as cancer is to run a trial not for approval purposes in a population made up of any patients who want to take part and might benefit.

"But [researchers] take a risk when they do that, because they have to gather the adverse-event data," Joffe noted. The ironic pitfall: Trying to help more people could lead to the denial of marketing approval based on those extra, adverse reactions - thus ultimately helping fewer of the afflicted.

"Some companies have said we can deal with this more easily by doing the research in places where people don't have access to standard treatments," Joffe said, such as developing countries - an approach that reeks of exploitation.

"It's one strategy, though not one I'd recommend," he told BioWorld Financial Watch.

Lorman, the attorney, advises companies on informed consent and helps them prepare the documents, so he frequently has his hands in the complexities.

"It may well be that something that works in an early stage never gets to clinical trials," he said. "That's not inconceivable. The issue is whether the greater social good is served by the protections we have. How do you decide?"

Such a decision is made no easier by considerations of health care costs. If the development path for drugs to treat earlier-stage disease is blocked, what is the national cost for waiting to treat later-stage conditions?

"That's a perfectly good question to which there's equally no answer," Lorman said.