Updated from 10:42 a.m. EDT

How big a cancer drug can Tarceva be?

That's the next question being asked by investors in the wake of a triumphant clinical announcement late Sunday night, which sent related shares soaring Monday. Results from a phase III study, sponsored by OSI Pharmaceuticals ( OSIP), showed the experimental drug Tarceva helped patients with advanced non-small cell lung cancer live longer than patients taking a placebo.

Tarceva is being co-developed by Genentech ( DNA) and Swiss drugmaker Roche. For Genentech, Tarceva's success is like hitting the cancer-drug lottery jackpot twice. Recall last year, right around this time, Genentech hit it big with positive results from its Avastin colon cancer study.

Shares of OSI Pharmaceuticals soared and were recently up $53.80, or 141%, to $92.11 in very heavy trading; clearly, few investors were heeding Merrill Lynch's downgrade to neutral from buy, based on valuation concerns. Meanwhile, shares of Genentech were recently up $13.94, or 11.8%, to $132.16.

Specific data from the study are not being disclosed at this time, but OSI says Tarceva achieved its primary endpoint, which was improving overall survival by a minimum of 30%. The study also hit its secondary endpoints, including time to symptomatic deterioration, progression-free survival and response rate, OSI said.

OSI said it will seek approval for Tarceva from the Food and Drug Administration during the summer. Data from the Tarceva study are expected to be presented at the annual meeting of the American Society of Clinical Oncology, or ASCO, which begins June 5. This is the same medical conference venue where the Avastin colon cancer data was presented last year.

If the FDA grants Tarceva a priority six-month review, the drug could be on the market in the first quarter of 2005.

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