Corante

About this Author
DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: derekb.lowe@gmail.com Twitter: Dereklowe

Chemistry and Drug Data: Drugbank
Emolecules
ChemSpider
Chempedia Lab
Synthetic Pages
Organic Chemistry Portal
PubChem
Not Voodoo
DailyMed
Druglib
Clinicaltrials.gov

Chemistry and Pharma Blogs:
Org Prep Daily
The Haystack
Kilomentor
A New Merck, Reviewed
Liberal Arts Chemistry
Electron Pusher
All Things Metathesis
C&E News Blogs
Chemiotics II
Chemical Space
Noel O'Blog
In Vivo Blog
Terra Sigilatta
BBSRC/Douglas Kell
ChemBark
Realizations in Biostatistics
Chemjobber
Pharmalot
ChemSpider Blog
Pharmagossip
Med-Chemist
Organic Chem - Education & Industry
Pharma Strategy Blog
No Name No Slogan
Practical Fragments
SimBioSys
The Curious Wavefunction
Natural Product Man
Fragment Literature
Chemistry World Blog
Synthetic Nature
Chemistry Blog
Synthesizing Ideas
Business|Bytes|Genes|Molecules
Eye on FDA
Chemical Forums
Depth-First
Symyx Blog
Sceptical Chymist
Lamentations on Chemistry
Computational Organic Chemistry
Mining Drugs
Henry Rzepa


Science Blogs and News:
Bad Science
The Loom
Uncertain Principles
Fierce Biotech
Blogs for Industry
Omics! Omics!
Young Female Scientist
Notional Slurry
Nobel Intent
SciTech Daily
Science Blog
FuturePundit
Aetiology
Gene Expression (I)
Gene Expression (II)
Sciencebase
Pharyngula
Adventures in Ethics and Science
Transterrestrial Musings
Slashdot Science
Cosmic Variance
Biology News Net


Medical Blogs
DB's Medical Rants
Science-Based Medicine
GruntDoc
Respectful Insolence
Diabetes Mine


Economics and Business
Marginal Revolution
The Volokh Conspiracy
Knowledge Problem


Politics / Current Events
Virginia Postrel
Instapundit
Belmont Club
Mickey Kaus


Belles Lettres
Uncouth Reflections
Arts and Letters Daily
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

In the Pipeline

« Beg to Differ | Main | Alex Tabarrok on Me-Too Drugs »

December 6, 2004

Tarceva Targets

Email This Entry

Posted by Derek

From Forbes, I find that CSFB has lowered its target price for OSI Pharmaceuticals, co-owner (with Genentech) of the new cancer therapy Tarceva. This is a HER1/HER2 compound (more the former than the latter), which makes it rather similar to AstraZeneca's Iressa.

Tarceva has lived in Iressa's shadow throughout its development, and OSI's stock has moved in response to market perceptions about how much better (or worse) their drug is in comparison. Here's a chart for the last year - take a look at that mighty jump in late April. That's when clinical results were announced that made Tarceva look like it would perform better than Iressa when it hit the market. As you see, people got a bit enthusiastic.

But check out that recent dip, which is a reponse to Genentech's attempt to inject some reality into the expectations of shareholders since the drug was launched last month. Their estimate for the number of Tarceva patients wasn't what the stock's cheerleaders wanted to hear, and it's not quite what OSI's been putting out, either. It's not often you see two companies disagreeing so publicly over their shared drug's profit potential.

There's pressure on the other end of the expectations game, too. The conclusions from a large Iressa clinical study, ISEL, will be released soon - AstraZeneca has said by the end of the year. It's widely thought that this one will make Iressa look a bit better than it does at present - that is to say, pretty much like Tarceva looks now. Quoth CSFB:

"We expect ISEL (Iressa Survival Evaluation in Lung Cancer) to meet its primary endpoint of survival," the research firm said. "A statistically significant result will reinforce existing physician impressions of the two drugs as clinically comparable--despite likely Wall Street squabbling over percentage differences in survival and inevitable differences in subset groups."

But, as mentioned in that last link, Morgan Stanley is sticking with the rosier view:

"The company made an effort to clarify what it considers a market misunderstanding. . .Management's comments were more in line with our thinking and contrary to what we believe were highly conservative comments by development partner, Genentech. . .We expect Tarceva's broad label will allow OSI and Genentech to market Tarceva to a broad patient population. . .we believe that the Street is underestimating the profitability of this drug to OSI."

Well, I'm not being paid to render an opinion - at least, not as much as those folks on the Street, anyway. But for what it's worth, I'm with CSFB on this one. (Some readers may recall that when OSI jumped back in April that I said that if I owned it "I'd have been knocking things over on my desk to get to my phone to sell. . .") In the end, I'm not sure how different these two drugs are going to be. It's a case of near-simultaneous development, the kind I was talking about the other day, and those don't always work out too well. And there's a longer-term problem which is going to affect the whole oncology market: I think that the days of being able to market all kinds of cancer therapies to everyone are beginning to disappear.

But whether Tarceva turns out to be different from Iressa or not, it's still probably not good news for Imclone, whose Erbitux targets the same pathways - just much more expensively, and perhaps not to much more benefit, if any. I took a pile of abuse back in April in that same post where I talked about selling OSI, advising IMCL shareholders to get out at $70. They should have. Hey, there's still time!

Comments (2) + TrackBacks (0) | Category: Cancer


COMMENTS

1. jim on December 7, 2004 7:10 AM writes...

Care to expand on "I think that the days of being able to market all kinds of cancer therapies to everyone are beginning to disappear." The days of Little Japan are going going gone, so docs are no longer motivated to infuse everything under the sun. Patient and family expectations remain, however.

Permalink to Comment

2. Derek Lowe on December 7, 2004 8:59 AM writes...

I've spoken a little about this in the past, but the category archives on the right are hosed at the moment. It's worth another post, definitely.

Permalink to Comment


EMAIL THIS ENTRY TO A FRIEND

Email this entry to:

Your email address:

Message (optional):




RELATED ENTRIES
Scripps Update
What If Drug Patents Were Written Like Software Patents?
Stem Cells: The Center of "Right to Try"
Speaking of Polyphenols. . .
Dark Biology And Small Molecules
How Polyphenols Work, Perhaps?
More On Automated Medicinal Chemistry
Scripps Merging With USC?