Feb. 26 (Bloomberg) -- A study of Genentech Inc.’s Avastin cancer drug is attracting critics who say it may force doctors to use the drug for a year without knowing if six months would work at half the cost.

The 2,710-patient trial, whose results are expected in April, may show that 12 months of Avastin added to six months of chemotherapy can reduce the risk of colon cancer recurring. The test is part of a $1 billion campaign by the South San Francisco- based company to expand the uses of Avastin, already approved for advanced colon, lung and breast cancer

The drug, among the most expensive cancer medicines at a yearly wholesale cost of $52,800 a year, generated $4.8 billion in 2008 sales. Revenue may rise by $2 billion annually should the drug gain use against newly diagnosed colon cancer, said Jason Zhang, an analyst for BMO Capital Markets in New York. A positive result may increase Genentech’s value as the company fends off a hostile tender offer from Roche Holding AG.

“I was furious” about the study design, said Leonard Saltz, a research oncologist at Memorial Sloan-Kettering in New York who consults for Genentech, in a telephone interview. Saltz said in an interview that testing a drug for six months has been “standard practice for such a study for the last dozen years.

“It is a significant expense issue, and it is a convenience and psychology issue,” said Saltz, noting that the drug should first have been tested for half a year before testing it for a year. “I was very disappointed.”

‘Fair Question’

Saltz and Alan Venook, a researcher at the University of California, San Francisco, both said they don’t believe the study was designed just with profit in mind. Saltz praised the trial’s lead scientist, Carmen Allegra, the division chief of hematology and oncology at the University of Florida Shands Cancer Center in Gainesville. Still, Venook said, “It’s a fair question to ask.”

“While I believe they want to help patients, they also have a fiduciary responsibility to their shareholders to get the best returns they can within the context of legal and ethical practices,” Saltz said. “If I worked for Genentech, it would be my job to develop studies that would help them sell as much drug as possible.”

The study, called C-08, has emerged as a key point of contention between Genentech and Basel, Switzerland-based Roche Holding AG, now pressing a hostile tender offer.

Genentech rose $1.06, or 1.2 percent, to $87.48 at 4 p.m. in New York Stock Exchange composite trading.

Roche, which already owns 56 percent of Genentech shares, said its $86.50-a-share bid is based in part on a financial model giving the study 55 percent odds of success, compared with Genentech’s 61 percent estimate. A Genentech board committee has said the company should be priced at $112-a-share. The Roche offer expires March 12, before the trial results are reported.

Swiss Army Knife

A positive finding is also critical to Genentech’s long-term push to aim Avastin at a wide variety of early-stage tumors, making the drug a virtual Swiss army knife drug for cancer. Avastin is Genentech’s “single most important value-driver over the next year,” said Mark Schoenebaum, a Deutsche Bank analyst in New York, in a telephone interview.

Cancer-fighting medicines generated $41.4 billion in global sales in 2007, making them the top-selling drug group, according to research firm IMS Health Inc. Avastin’s cost puts the medicine at the center of a controversy over the growing cost of treating cancer.

Monthly Price

The median monthly price of cancer treatment in the U.S. surged six-fold to $5,988 from $1,052 in the early 1990’s, according to Peter Bach, a researcher at Memorial Sloan-Kettering Cancer Center in New York and former senior policy adviser at the federal Medicare program. Advances in treatment have not improved at the same pace as their costs, he wrote in a report in the Feb. 5 New England Journal of Medicine.

“With each advance in treatment, the magnitude of the increase in the cost of treatment exceeded the magnitude of improvement in efficacy,” wrote Bach, who consults for Genentech and other companies. He urged lawmakers to consider strategies for containing costs of cancer drugs such as having Medicare compare effectiveness of the medicines it pays for.

Cancer doctors buy Avastin and are allowed to charge the manufacturer’s price for the drug plus 6 percent. For advanced colon cancer patients who meet certain financial criteria, Genentech capped Avastin’s cost at $55,000.

The company hasn’t announced what it would charge for Avastin as an adjuvant, or early-cancer, treatment.

Both Saltz and Venook say it’s also unknown whether longer use of Avastin, which fights cancer by crimping blood-vessel growth, may produce delayed side effects 15 years later if such patients are cured of their cancer.

Long-Term Effects

“We do not know what the long-term effects of exposure to Avastin might be, because no human being has been alive for 15 or 20 years after such treatment,” Saltz said in an email.

Genentech officials wouldn’t respond to repeated requests for interviews about the trial.

Allegra, the study leader, said the trial’s design sought to provide enough time on Avastin to detect whether the approach worked against early disease.

“We wanted to optimize the chance that if there is a positive effect, we would see it,” Allegra said in an interview. “We would all like to see less expensive medication. First we have to figure out if it works.”

The National Cancer Institute, the Food and Drug Administration, Genentech and the National Surgical Adjuvant Breast and Bowel Project all participated in designing the study. Allegra said.

149,000 Diagnosed

About 149,000 people were diagnosed with colon cancer last year, according to the American Cancer Society. Allegra said that about 45 percent with the disease, or 67,000 people, have newly- diagnosed stage 2 and stage 3 cancers -- like the study population -- and would be eligible for the drug.

Avastin is one of the new-generation of targeted treatments that fight cancer by interfering with basic biological pathways involved in cancer. Approved in 2004 for advanced colon cancer, and later for advanced lung and breast tumors, Avastin was the first drug of its kind designed to block the growth of blood vessels that fuel tumor growth, a process called angiogenesis.

There is no guarantee Avastin, proven to be a powerful aid for advanced patients, will work in early stages of the disease, Allegra said. As far as safety is concerned, Avastin caused hypertension and musculoskeletal pain in some study participants, but didn’t cause bleeding, another known side effect of the drug.

Another serious complication associated with Avastin, perforation of the intestine in patients, didn’t appear in CO-8 volunteers, Allegra said.

Advocacy Group

Nancy Roach, board chair of C3: Colorectal Cancer Coalition, an Alexandria, Virginia-based advocacy group that receives unrestricted funding from companies, including Genentech, is also critical of the colon cancer study’s design.

“This is a publicly supported trial, and it skipped the fundamental question of how much Avastin is enough,” Roach said in a telephone interview.

Genentech declined to break out the public and private outlays for this study. The National Cancer Institute supports a network of clinical trial cooperative groups, including the National Surgical Adjuvant Breast and Bowel Project, which is conducting the Avastin C-08 study.

If Avastin makes a difference in patient outcomes, “We’ll pay for it,” said UCSF’s Venook. “If benefits are marginal, we’ll have to take a microscope to how much we pay for this.”

To contact the reporter on this story: Marilyn Chase in San Francisco at mchase6@bloomberg.net

Last Updated: February 26, 2009 16:13 EST