Robert Steyer
Wall Street seemed to accept the companies' explanations. OSI Pharmaceuticals closed at $32.16, down 49 cents, or 1.5%, while Genentech closed at $79.72, down 42 cents, or 0.5%, hardly the typical response to a failed Phase III test.
Tarceva belongs to a new class of drugs called Epidermal Growth Factor Receptor tyrosine kinase inhibitors, mercifully abbreviated by the medical profession as EGFR. The drugs target a certain pathway called HER 1, which plays a major role in cell growth of many cancers. Tarceva is designed to block tumor cell growth. Goddard said OSI and its partners designed the lung cancer tests as a response to tests undertaken by AstraZeneca and its EGFR drug Iressa several years ago involving a similar group of patients (people with advanced nonsmall cell lung cancer) and a similar treatment protocol (Iressa plus standard chemotherapy as a first-line treatment). Goddard said this was a business decision based on the fact that EGFR drugs were so new and that OSI and its partners wanted to have a competing product in case the Iressa test was successful. But in August 2002, AstraZeneca reported that its test failed the goal of providing a statistically significant improvement in survival rates between patients taking the Iressa/chemotherapy regimen and patients receiving chemotherapy and a placebo. After the competitor's results were reported, Goddard said OSI began telling investors and analysts that Tarceva as front-line therapy for lung cancer was not being factored into the company's financial estimates. Still, an OSI announcement in August, 2002 held a small glimmer of hope for Tarceva when it said: "There are important differences between the agents and clinical programs including structure, formulation, pharmacokinetics and Phase III design and dosing. These may all play a role in the results of the Phase III trials."
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