Markets

With Avastin Effectiveness Questioned, Roche's Acquisition of Genentech Looks Hasty

By Jim Edwards

Updated on: June 3, 2009 / 3:28 PM EDT / MoneyWatch

The news for Roche on Avastin gets worse: Forbes' Matt Herper just published a lengthy piece which suggests, in layman's terms, that the $4.8 billion cancer drug kinda doesn't work very well. Here's the nut:

... on average, Avastin only increases patients' life spans by a couple months. The big sales are partly a result of the high cost -- up to $55,000 per patient

In breast cancer, the drug hasn't extended patients' lives at all in several studies.

... some researchers are wondering if after Avastin is stopped, cancer cells spread more aggressively than before, dulling the drug's effect. Such a "rebound effect" could explain why Avastin therapy is not resulting in bigger survival gains even as the drug makes pictures on imaging scans look better.

You'll remember that Avastin was one of the driving forces behind Roche's acquisition of Genentech. Roche closed that deal for $95 a share -- before the results of a big Avastin trial came out. When those results were unveiled, on April 21, Genentech's (refreshingly straightforward) headline was:

Study of Avastin in Early-Stage Colon Cancer Did Not Meet Primary Endpoint

The study was specifically about whether Avastin is any good at stopping cancers returning -- the same point addressed in the Forbes piece.

Almost immediately after the study failure, questions were being asked about whether Roche overpaid for Genentech. (And why didn't it wait for the results before making the deal? Sure, Genentech would have become more expensive if the results were good, but BNET noted as early as August 2008 that many scientists just didn't believe Avastin was going to make the grade, suggesting that Genentech's price was about to drop.)

Roche has spent the last few days at ASCO, where it is presenting a staggering 12 percent of the conference's entire docket -- 500 abstracts! Quantity isn't quality, of course. The stock is sinking as every day of the meeting goes by.