OSI, Genentech Are Unfazed by Cancer-Drug Trials

Crucial tests of an experimental lung-cancer drug, Tarceva, failed to meet their goals, but the drug's developer said Wednesday that the results were not a surprise and were "not an omen" for the drug's prospects in treating other cancers.

The drug is developed by OSI Pharmaceuticals(OSIP Quote - Cramer on OSIP - Stock Picks). OSI, a Melville, N.Y.-based biotechnology company, has joined with Genentech(DNA Quote - Cramer on DNA - Stock Picks) and Hoffmann-La Roche, the U.S. drug subsidiary of the Swiss pharmaceutical giant, to test and -- if successful -- market the anticancer compound.

On Wednesday, the companies reported that Tarceva failed to meet the goals of a Genentech-sponsored test involving 1,050 patients and a 1,200-patient Hoffmann-LaRoche test in people with an advanced form of lung cancer.

The goal was to see if a combination of Tarceva and standard chemotherapy given to some patients could demonstrate better survival rates vs. other patients given a placebo along with chemotherapy. The goal was to show a 25% improvement in survival. The drugs were administered as the first treatment for these patients.

The tests failed to show a statistically significant improvement in patients who suffered from nonsmall cell lung cancer, which, the companies say, account for nearly 80% of all U.S. lung cancers.

"We are not surprised," said Colin Goddard, chairman and chief executive of OSI Pharmaceuticals, in a telephone conference call with analysts and investors Wednesday. Goddard noted that OSI had alerted investors previously about the "high risk" nature of these Phase III tests, which represent the last step in clinical trials before companies submit applications for product approvals to the Food and Drug Administration.

Goddard said clinical trials represented "one step on the learning curve" of how to use Tarceva and "not an omen" for Tarceva's possible treatments of other cancers.

Tarceva is being tested -- either as a single agent or in combination with other drugs -- in three other lung cancer trials as well as in clinical trials for treating brain cancer and pancreatic cancer.