Genentech stock plummets after drug fails key test.(Abstract)

2002 OCT 10 - (NewsRx.com & NewsRx.net) -- Shares of Genentech, Inc. plummeted after an announcement that a once-promising experimental breast cancer drug had failed a clinical trial.

The South San Francisco-based company announced September 9, 2002, that Avastin, a new class of drug designed to choke the blood supply to tumors, did not improve the prognosis of women with late-stage breast cancer.

Avastin did help shrink tumors, but it still didn't help patients live longer - a key goal of the phase III trial. Drug companies usually apply for U.S. Food and Drug Administration approvals after successful phase III trial results.

Genentech stock fell $3.11, or 9.7%, to close the next day at $28.89 a share on the New York Stock Exchange.

Genentech chief medical officer Susan Hellmann said the company was disappointed with the breast cancer results, but remained hopeful that Avastin will improve the lives of other cancer patients.

The company is now conducting a phase III trial with 900 colon cancer patients. A previous trial with fewer colon cancer volunteers produced promising results, Hellmann said. Genentech is also testing Avastin on lung and kidney patients.

"Those areas hold more promise," said Patrick Mooney, an analyst with Thomas Weisel Partners. Mooney said the fact that breast cancer tumors did shrink in some patients shows the drug still has promise.