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Genentech (DNA) reported data from a Phase II trial of pertuzumab, a HER dimerization inhibitor, calling the results “encouraging” while withholding specific data for release at the ASCO conference, in June. But Jason Kantor, an analyst at RBC Capital Markets, said Genentech officials in an interview confirmed the drug did not meet its goal of producing a statistically significant improvement in progression-free survival.

The drug, formerly known as Omnitarg, is thought to inhibit the ability of HER2 to pair with other HER family receptors. Like Herceptin, pertuzumab binds to the HER2 receptor, but to a different area. In the trial, pertuzumab was given as an adjunct to Gemzar from Lilly (NYSE:LLY) and compared to Gemzar alone in patients with platinum-resistant ovarian cancer. Earlier in its development, pertuzumab was expected to be effective against a wide range of different types of cancer. However, in results announced in 2005, the drug did not provide a benefit as a single agent against ovarian, breast or prostate cancer. Genentech dropped 35 cents lower to $83.68.

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OSI Pharma (OSIP) out-licensed its diabetes program to Eli Lilly (LLY). In return for $25 million upfront, Lilly will have exclusive rights to the Glucokinase Activator (GKA) program, including the lead compound PSN010. The GKA drugs are designed to increase glucose uptake in the liver and also increase the secretion of insulin from the pancreas, a dual mechanism of action. PSN010 began a Phase I trial in February 2006 after proving effective in pre-clinical work. Besides the upfront payment, the deal includes up to $360 million in development and sales milestones, plus royalties. OSI was off by 6 cents at $33.85.

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BioMarin (NASDAQ:BMRN) began treating patients with symptomatic peripheral arterial disease in a Phase II trial of 6R-BH4. Data are expected in the first half of 2008. The enzyme cofactor 6R-BH4, also known as tetrahydrobiopterin, is involved in the production of nitric oxide, which plays a key role in the cardiovascular system. The test will be conducted in patients suffering from intermittent claudication (IC) and the goal will be to increase their peak walking time. BioMarin slid 4 cents to $16.51.

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Enzon Pharma (NASDAQ:ENZN) filed an Investigational New Drug application for a cancer drug candidate, an HIF-1 alpha (hypoxia-inducible factor 1alpha) antagonist. The target is evident in many cancer types, including solid tumors. HIF-1alpha protein reaches high intracellular concentrations in a variety of cancers, indicating a poor prognosis and resistance to therapy. Enzon licensed the drug from Santaris Pharma A/S in July 2006, along with seven other antagonist candidates. Enzon gained 1 cents to end at $8.42.

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AtheroGenics (AGIX) rose sharply on expectations that news on a heart drug was imminent. AstraZeneca (NYSE:AZN) is responsible for AGI-1067, while partner AtheroGenics would also profit if the drug is successful. The deadline for submission to the American College of Cardiology meeting to be held in New Orleans in March was January 4, and AtheroGenics wants to present results from a Phase III trial of the drug at the meeting. There was widespread speculation that some sort of announcement would be made before the meeting. AtheroGenics climbed 24% higher, rising $2.34 to $12.06.

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Biotech gave back a small piece of Thursday's explosive gains in Friday's session. The Centient Biotech 200™ slipped 3 points lower to 3989, a loss of .08%. That small drop was still a relative outperformance to the broad market as the S&P 500 was down .61% and Nasdaq was off by .78%.

Disclosure: Centient management holds a position in Genentech shares and does consulting work for Genentech.

Source: Biotech Stocks Day-in-Review: Controversy For Genentech Cancer Drug