U.S. drug approval boosts Roche
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ZURICH, Switzerland (Reuters) -- News that breakthrough cancer drug Avastin had won U.S. approval for broad use in treating colon cancer sent Roche Holding stock more than three percent higher on Friday.
Analysts said the drug -- developed by Roche's majority-owned U.S. biotech arm Genentech -- was poised to become a multibillion-dollar product, given its broad prescription authorization and its $4,400 per patient per month price.
"Look at the label and look at the price,'' said Denise Anderson, an analyst at Kepler Securities in Zurich, adding that Avastin will be used in combination with a wider-than-expected range of therapies that broadens its market by around half.
"The price is double what a lot of people had thought. Combine those two (factors) and -- boom! -- huge upside'' for the stock, she said.
Roche certificates, its most widely traded form of equity, rose as much as 3.9 percent in early trade to 132.75 Swiss francs before coming off the peaks to 131.25 by 0930 GMT.
The certificates have outperformed the DJ Stoxx European healthcare index by more than a fifth over the past 12 months as Roche, the world's biggest maker of cancer drugs, rolls out a range of successful new medicines.
Rum ours circulating last week, that Avastin would not be approved on schedule, had weighed on Roche stock.
It marked the first approval for a drug that works via the tumor-starving mechanism known as anti-angiogenesis. It will be used in combination with chemotherapy as a first-line treatment for colon cancer that has spread to other parts of the body.
Genentech officials said on Thursday they had already begun shipping Avastin and patients could get it as early as next week.
Analysts estimate global sales of Avastin to reach between $1.6 billion and $1.8 billion a year by 2008.
Roche Chairman and CEO Franz Humer said earlier this month it was "reasonable'' to expect peak Avastin sales of around $2 billion a year in colorectal cancer alone.
Bank Vontobel gave what it called a cautious estimate that the drug would have 2004 sales of 200 million Swiss francs ($158.1 million) and peak annual sales of one billion francs.
Avastin is also being tested for potential use in many other types of cancer that strike the kidney, pancreas, breast, lymph system, bladder, lung and prostate.
The drug's approval has been eagerly anticipated since an 800-patient trial showed previously untreated patients given the drug and chemotherapy lived an average of 20.3 months versus 15.6 months for patients on chemotherapy alone.
Shares of Genentech closed up $7.02, or 7.3 percent, at $103.10 on the New York Stock Exchange after news of the FDA approval -- their highest since a stock split in October 2000.
Shares in German drugmaker Schering, which is developing a drug in the same class as Avastin, rose two percent in early trading.
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