Feb. 3 (Bloomberg) -- OSI Pharmaceuticals Inc. said a clinical trial of the drug Tarceva in lung cancer patients was halted early because the treatment significantly extended the time patients lived without their disease worsening. The report sent OSI shares 16 percent higher, the biggest single-day gain in more than four years.

Tarceva, marketed in the U.S. with Genentech Inc., was used with Avastin after patients with non-small cell lung cancer were initially treated with Avastin and chemotherapy, OSI and Genentech said yesterday in a statement. A data safety panel recommended the study, called Atlas, end early after an interim analysis showed the drug combination kept the disease from progressing significantly longer than Avastin and a placebo.

The results marked the second study showing Tarceva’s benefits for lung cancer patients. The drug, already used to treat pancreatic cancer, generated $264 million for Melville, New York-based OSI in 2007. Non-small cell lung cancer is the most common kind of lung cancer, which is the single biggest cause of cancer deaths among U.S. men and women, according to the American Cancer Society.

“While the final results are still forthcoming, we believe the Atlas trial reinforces our optimistic view of Tarceva’s role as a leader in the non-small cell lung cancer arena, as well as its revenue-generating potential,” Lauren Migliore, an analyst at Morningstar Investment Services Inc. in Chicago, wrote yesterday in an investment note.

Shares Jump

OSI gained $5.85, or 16 percent, to 42.24 at 4 p.m. New York time in Nasdaq Stock Market composite trading, the largest one- day jump since Dec. 17, 2004, when a Tarceva competitor failed in a study. Genentech rose 87 cents, or 1.1 percent, to $82.97 in New York Stock Exchange composite trading.

Tarceva, a once-a-day pill, works by blocking a protein called epidermal growth factor that helps cancer cells spread. Genentech, of South San Francisco, California, reported Tarceva sales of $457 million in 2008. Swiss-based Roche Holding AG markets the treatment outside the U.S.

An earlier study, known as Saturn, found that Tarceva, when given as a single drug to patients immediately after chemotherapy, delayed progression of lung cancer when compared with those given chemotherapy plus a placebo, the companies said in a statement. The Atlas trial found that Avastin and Tarceva, when used together, were about as safe as when the two drugs are used alone, Genentech and OSI said.

Different Approaches

“Tumors use different pathways to grow and these results showed that combining medicines targeting two of these pathways instead of one delayed disease progression,” Hal Barron, Genentech’s senior vice president of development, said in the statement.

Genentech will discuss the data from the two studies with the U.S. Food and Drug Administration “to determine next steps,” Barron said.

Results of the two studies, both of which were the final of three stages of clinical trials required for marketing approval by U.S. regulators, will be presented at a future scientific meeting, said Charlotte Arnold, a spokeswoman for Genentech, in a telephone interview.

Tarceva now is approved for patients when at least one prior chemotherapy treatment has failed, OSI has said.

All forms of lung cancer resulted in about 162,000 deaths in the U.S. in 2008, according to the cancer society. The majority of people with advanced lung cancer survive less than one year.

To contact the reporter on this story: David Olmos in San Francisco at dolmos@bloomberg.net

Last Updated: February 3, 2009 16:11 EST