Avastin and Lucentis: Roche's Quandry

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The results of an eagerly anticipated clinical trial are leaking out and early indications are that the Avastin cancer med is about as effective as Lucentis in treating a form of age-related macular degeneration, The New York Times writes. And while there are some caveats - full results will not be disclosed until Sunday - the message is that execs at Roche (OTCQX:RHHBY) and its Genentech unit may find themselves in a quandary.

Why? Avastin is an older med approved to treat various cancers, but not the eye afflication that is common among the elderly. However, many docs have successfully used the drug on an off-label basis, especially since the price tag is low - up to $50 for injection. By comparison, Lucentis is approved to treat AMD, but costs $2,000 for an injection. And Genentech sells both drugs. Which one do you think Genentech wants to promote?

The pricing disparity has plagued Genentech. Three years ago, the biotech yanked Avastin from compounding pharmacies, which were repackaging and selling the drug to opthalmologists. After outcries, Genentech eventually struck a deal with opthalmologists to loosen the restrictions. The episode, which Genentech blamed on an FDA inspection, prompted a probe by the U.S. Special Senate Committee On Aging into Medicare expenditures for Avastin.

Medicare costs are an issue, of course. And a study publicized last year found that, in 2008, Medicare paid for 480,000 Avastin injections and 337,000 Lucentis injections, but paid only $20 million for Avastin and $537 million for Lucentis. Another nugget: Avastin which is used in 65 percent of Medicare patients but only 40 percent are treated with Lucentis (back story). And so, the National Institutes of Health began a head-to-head clinical trial.

Now, that study of 1,200 patients by the National Eye Institute is about to be released and sources tell the Times that injections of Lucentis and Avastin every four weeks resulted in vision changes after one year that were essentially the same. However, one source tells the paper that Avastin was less effective than Lucentis in decreasing the thickness of the retina. The inference is that Avastin may not be as effective in preserving vision beyond one year. And with 1,200 patients, the trial may not be viewed as sufficiently robust to determine significant safety differences or issues.

This provides an opening for Roche, as does a study the drugmaker funded that examined records of some 78,000 Medicare recipients with AMD and found that those who received Avastin had an 11 percent higher risk of dying and a 57 percent higher risk of hemorrhagic stroke than those getting Lucentis. Here is the abstract, which will be presented at a conference this weekend.

Of course, Roche will seize on any contrasts in safety and effectiveness that emerge as the meds are used to treat wet AMD, and has done so before. Three years ago, in fact, the Genentech unit posted a letter on its web site to describe 36 reports of off-label use in Canada that resulted in adverse events, 32 of which were serious (back story). Given the difference in pricing, though, Roche may have to work extra hard to convince third-party payers that Lucentis is worth the cost.

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