Genentech Soars on Cancer Drug OK

The company says it will begin shipping Avastin within the next three days.
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Updated from 8:12 a.m. EST

The Food and Drug Administration Thursday approved for marketing a new drug from

Genentech

(DNA)

for the treatment of colorectal cancer, which the American Cancer Society says is the second-leading cause of cancer death in the United States.

Shares were up another $4.85, or 4.7%, to $107.95 in Friday trading, following a 7% gain Thursday. Approval of the drug, Avastin, had been expected, and many analysts had already incorporated estimated sales into their Genentech earnings models.

In addition to the financial prospects for Genentech, the FDA announcement was noteworthy because Avastin is the first FDA-approved drug to inhibit angiogenesis, a process that enables new blood vessels to develop, helping tumors grow and spread.

"The approval of Avastin is the result of many years of research and development, exploring a promising new approach to fighting cancer," said Dr. Mark B. McClellan, the FDA commissioner, in a prepared statement.

"Today marks an important shift in the treatment of metastatic

spreading colorectal cancer," said Arthur D. Levinson, Genentech's chairman and chief executive, in a prepared statement.

Genentech said it would begin shipping Avastin within three days.

Avastin has been approved by the FDA in conjunction with a standard form of chemotherapy as an initial treatment for people with metastatic cancer. The FDA said tests have shown that a combination of Avastin and standard chemotherapy drugs could extend patients' lives by five months.

Avastin is a genetically engineered version of a mouse antibody that combines both human and mouse components, the FDA explained. Antibodies are produced by the body's immune system to fight foreign substances.

The FDA said Avastin appears to work by targeting and thwarting the activity of a natural protein called vascular endothelial growth factor, or VEGF, that stimulates the growth of new blood vessels. When Avastin binds to VEGF, the drug in effect starves the tumors for blood, oxygen and other nutrients to help them grow.

VEGF was discovered by a Genentech scientist, Dr. Napoleone Ferrara, in 1989. He then created the mouse antibody for this protein, leading to the commencement of clinical studies in 1997 with a humanized version of the antibody.

Genentech also is conducting clinical trials for Avastin as a treatment for kidney, breast and certain lung cancers. The company also is examining Avastin as a potential therapy for prostate and ovarian cancer as well as for a lethal form of skin cancer.