Salomon Smith Barney downgraded Genentech (DNA) to in-line from outperform.
In a Phase III trial, the drug maker's Avastin failed to meet its objectives in progression-free survival in metastatic breast cance patients. Genentech is still awaiting Phase III results for Avastin in metastatic colorectal cancer patients, which is the drug's primary indication.
Analyst Elise Wang says this news indicates a negative development for the program, which may heighten concerns about the overall potential efficacy of Avastin in solid tumors. She notes that the next datapoint for program, the clinical results from the Phase III study of Avastin in metastatic colorectal cancer, is expected in 2003.
Wang says Avastin, in combination with chemotherapy, had demonstrated more promising efficacy results in Phase II in this indication. She notes Avastin sales are not in her models, but says the series of product disappointments leads to her downgrade and $28 target.