In a brief interview late last week, Roche ceo Severin Schwan complained that his best-selling Avastin cancer treatment is not viewed appropriately by investors. "People talk as if Avastin is a problem, but it is a product with over six billion Swiss francs (in sales) and it still has growth potential," he toldDow Jones. "Other companies would long for a problem like this."
Well, sort of. It is certainly true that Avastin rings registers; worldwide sales last year totaled about $6.8 billion and rose 9 percent, which meant this one drug accounted for 14 percent of total Roche sales. But you may recall the FDA recently decided it wants to rescind the breast cancer indication for the drug, which is approved to treat bowel, lung, brain and kidney cancers. This means that insurers are unlikely to cover the cost of breast cancer treatment (back story here).
Roche and its Genentech unit are appealing the FDA move. But increasingly, Avastin is losing support to the point where Roche cut its sales forecast by 20 percent. "The harsh reality is that oncologists in the US are very insecure about what action the FDA will take," Schwan concedes. Last week, the influential Susan G. Komen for the Cure one of the largest breast-cancer patient-advocacy groups, announced it will not promote Avastin for women who have not previously taken the med.
And now a survey by Sermo, which is an online site visited by numerous docs, confirms his worries with a survey that found 58 percent support the FDA restriction, even though 50 percent also believe Avastin has increased the quality of life for breast cancer patients. As one oncologist remarked: "This is a shame, but we are going to do what the payers let us do." In other words, Avastin sales are certain to continue declining.
Of course, Schwan is not helped by a study published last week in the Journal of the American Medical Association that linked Avastin to an increased risk of causing a fatal reaction when combined with chemotherapy. And an accompanying editoral was rather harsh, arguing the jury is still out on whether Avastin is a boon or bust (see this).
In a sobering assessment, Sanford Bernstein analyst Tim Anderson noted the editorial, in particular, "recountsIt recounts the data with Avastin in different tumor settings, both good and bad, and goes on to raise a cost-effectiveness argument, questioning whether use of Avastin in certain situations is justified given an all-in cost that can reach $100k/yr when considering both direct and indirect costs," he wrote in an investor note. "The timing of this new analysis and the accompanying editorial is not good because already Avastin is perceived by investors as being under attack."