Terminally Ill Kids Get `Chance' of Cancer Cure From Wyeth Drug

June 26 (Bloomberg) -- Two children under age 10 with terminal cancer have been recruited into an experiment testing a novel way of treating the disease by targeting stem cells.

Researchers at the Hospital for Sick Children in Toronto are administering Rapamune, an organ transplant medicine from the drugmaker Wyeth, to two youngsters with a nervous system cancer called neuroblastoma. In test tube and mice studies, the drug killed stem cells that scientists say may be responsible for driving the cancer's growth.

Since 1997, researchers have found that certain stem cells fuel tumors in leukemia and in breast, lung and brain cancers. Scientists at universities and biotechnology companies led by Infinity Pharmaceuticals Inc. of Cambridge, Massachusetts, and Australia's ChemGenex Pharmaceuticals Ltd. are developing treatments to block the cells. The Toronto test is the first to use an existing medicine on the cells in neuroblastoma patients.

``If you can therapeutically target cancer stem cells -- the cells that are resistant to chemo and radiation -- you have a chance of curing cancer,'' said Judy Lieberman, a researcher with the Immune Disease Institute, a Boston-based affiliate of Harvard Medical School. ``It can revolutionize cancer therapy.''

In the U.S., 650 children are diagnosed each year with neuroblastomas and four out of five victims older than age 1 die within five years. The experiment in the two young patients is the latest in a handful of human tests by scientists to determine whether attacking stem cells can thwart cancer, researchers say. The study took an innovative approach by testing thousands of existing drugs against cells drawn from the patients' own tumors.

`Bullet-Proof Vests'

Stem cells are capable of copying themselves and turning into other cell types. The new treatment theory is based on the idea that in some cancers, stem cells get stuck in a pattern of endless self-renewal. Research has found that these stem cells may be immune to chemotherapy and radiation, making conventional cancer treatments fail.

``Standard chemo is like using a bomb to kill the cells,'' Lieberman said in a June 18 telephone interview. ``But the cancer stem cells are wearing bullet-proof vests.''

The strategy of finding and attacking these cells results from pioneering work by John Dick, a University of Toronto scientist who in 1997 showed that certain cells in leukemia propelled the growth of new cancer cells. Last year, he identified similar cells in colon cancer. His research indicates that some cells, for reasons not yet known, are more prone than others to propel the unchecked growth that typifies cancer.

From Lab to Clinic

``Our data show that there are some cells that are more potent at sustaining the growth of a cancer than others,'' Dick said in a June 18 telephone interview. ``These are the cells we called cancer stem cells.''

Researchers are trying different strategies to disable the cancer-initiating cells. The Hospital for Sick Children researchers tried the theory by testing thousands of approved drugs in lab dishes and animals to see whether any could inactivate the cells.

``We chose approved drugs so we could very quickly go from the lab to the clinic,'' said Kristen Smith, one of the Toronto researchers, in a June 13 interview in Philadelphia, where she presented her findings to a meeting of the International Society for Stem Cell Research.

After the researchers found that Rapamune, also known as rapamycin, showed activity against the cells, Canadian regulators said the drug could be tested in the children because no other treatment was likely to work for them. The researchers wouldn't identify the patients because clinical trials are confidential.

Killing Tumor Cells

The drug, which also is used to coat Johnson & Johnson's Cypher heart stent to keep cleared arteries from reclosing, may work by inhibiting a gene that affects cell growth, Smith said. The children were given the drug over the past few months, with treatment on the second child ending about a month ago, she said. She wouldn't provide details on their condition and cautioned that it's too early to consider the drug a proven treatment for neuroblastomas.

Smith and her colleagues found that rapamycin decreased the number of tumor-forming cells in laboratory dishes while leaving other cells within the tumors intact. When they injected cancer- starting cells from the children's tumors into mice, the rodents grew their own tumors. When they treated the mice with rapamycin, the tumors shrank.

``This suggests that we killed most of the tumor-initiating cells,'' she said.

The Toronto research was supported by the James Fund, an organization started by Sydney and Pam Birrell in honor of their son James, who died of a neuroblastoma in 2001 at age 8.

The foundation has provided seed grants for ``crazy ideas'' that might give kids a better shot at surviving, said Sydney Birrell in a June 16 telephone interview. He said he hopes doctors will be able to do for children with neuroblastomas what they've accomplished for kids with leukemia.

``Eighty-five percent of those kids used to die,'' he said. ``Now 85 percent of them survive.''

To contact the reporter on this story: Rob Waters in San Francisco at rwaters5@bloomberg.net.

Alzheimer's Drug Trial Helps Investors Forget Wyeth Troubles

With patent expiration wiping out its blockbusters, Wyeth has been desperate to find new drugs.

It may have one. The beaten-down pharmaceutical company released data Tuesday that brings hope that an Alzheimer's treatment has significant potential.


Wyeth and its Irish partner Elan said Tuesday that a Phase 2 clinical trial of Alzheimer's treatment Bapineuzumab had yielded "encouraging preliminary findings."

Analysts were encouraged as well. Leerink Swann analyst Seamus Fernandez upgraded Wyeth to "outperform" because he believes bapineuzumab has long-term potential. Fernandez expects sales of bapineuzumab to be $150.0 million in 2011 and $750.0 million in 2012.

Shares in Elan (nyse: ELN - news - people ) closed up 5.7%, to 18.18 euros ($28.19), in Dublin. Wyeth (nyse: WYE - news - people ) rose 4.8%, or $2.08, to $45.16.

The 18-month trial generated statistically significant and clinically meaningful benefits for patients not carrying a gene known as "ApoE4," which apparently accounts for 40% to 70% of Alzheimer's sufferers.

Doug Petkus, a spokesman for Wyeth told Forbes.com that the company was planning to release the complete data in July.

"The data in itself was better than our own expectations, especially in a subset of the patient population that doesn't carry this ApoE4 gene," said Jack Gorman, analyst with Davy Stockbrokers. He told Forbes.com that the drug was still at an early stage of testing, but that it showed signs of being able to change the progression of Alzheimer's rather than only tackling the symptoms.

According to Elan, for non-carriers of ApoE4, the study's preliminary results showed a smaller loss of brain volume among treated patients than for placebo patients. Loss of brain volume is associated with the onslaught of Alzheimer's, and any ability to fight this would be significant.

The results did show an increase in adverse side-effects for carriers of ApoE4, especially at higher doses; some patients who were given the drug experienced "vasogenic edema," or brain swelling, but this did not affect placebo patients. According to an Elan spokesman, this was as expected and did not reach clinically significant levels.

The Bapineuzumab treatment is an antibody designed to clear amyloid from the brain, which is seen as the most likely path to success for fighting Alzheimer's. Amyloids are protein deposits found in the brains of Alzheimer's victims, and the pharmaceutical industry seems confident that a major part of tackling the disease will involve defeating amyloids. (See "Attacking Alzheimer's")

"The preliminary analysis of the Phase 2 study are a continued validation of the amyloid approach to Alzheimer's disease, and an important milestone in our companies' ongoing commitment to bring new treatment options to patients," Elan Chief Executive Kelly Martin said in a press release Tuesday.

Last week, Elan resumed testing of another Alzheimer's treatment, this time a vaccine designed to stimulate the immune system. Testing had been suspended in April after a potentially serious side-effect suffered by one patient, involving skin lesions.

The company has been under pressure to find a new blockbuster now that Effexor, its antidepressant drug, faces patent expiration in 2010. The company also faced generic competition for its blockbuster heartburn drug Protonix at the end of last year.

Cancer Revolution, Or Me-Too Mess?

Over the next decade, drug companies could either start selling more cancer drugs than at any time in history or face the biggest string of clinical failures ever.

Four hundred medicines are being tested on human volunteers, aimed at common diseases like colon, breast and lung cancer and also rare ones like hereditary thyroid tumors or myelofibrosis. Driving this influx is a new understanding of the molecular mishaps that turn healthy cells into malignant killers, and a desperation among large drug companies that will soon lose more sales at once to blockbuster drugs going off-patent than at any time in the past. Six big drug firms are testing more than a dozen cancer medicines each.

How will this giant cancer battle play out? Some clues can be found in the current race to develop anti-cancer medicines that hit a cellular receptor known as insulin-like growth factor one (IGF-1).

"It is the second big pathway that seems to be important for growth in many cancer cells," says John Mendelsohn, president of M.D. Anderson Cancer Center and co-inventor of Erbitux, now sold by ImClone Systems (nasdaq: IMCL - news - people ). Erbitux hits the first big pathway important in cancer cells growth, the epidermal growth factor receptor (EGFR).

Almost a decade ago, ImClone, AstraZeneca (nyse: AZN - news - people ), Genentech (nyse: DNA - news - people ) and Pfizer (nyse: PFE - news - people ) were all involved in a race to develop EGFR drugs. Only Erbitux has passed the $1 billion sales mark, and AstraZeneca's Iressa wound up being withdrawn from the U.S. market because a big trial failed to prove it extended the lives of lung cancer patients.

Pfizer, Merck (nyse: MRK - news - people ), Amgen (nasdaq: AMGN - news - people ), ImClone , and Roche (other-otc: RHHBY.PK - news - people ) are all testing drugs against IGF-1 in human trials.

"It's a me-too world," says Stephen Friend, head of oncology at Merck. He notes that many companies went after IGF-1 just because of its similarity to EGFR. They were looking for the next molecular pathway that might stop tumors from growing. (Merck entered later.)

Right now Pfizer is ahead. Its IGF-1 antibody is in a big trial in lung cancer. Seventy-eight percent of patients with a particular type, squamous cell cancer, responded to the drug. Alison Ayres, head of the company's oncology marketing operations, says Pfizer's plan for dealing with the new me-too environment of cancer drugs is to work on important cancer targets wherever the company can manage a lead.

"If we're not among the front-runners, we don't see any point," says Ayres.

The reason is that once a particular type of drug is established in a particular type of cancer, it is tough for a competitor to dislodge. Amgen developed a copycat to Erbitux, called Vectibix, and priced it significantly lower. But Vectibix has had trouble getting traction, while Erbitux is a blockbuster, in part because Vectibix is not approved to be used in combination with chemotherapy like Erbitux. Another reason is that once a drug is approved, any new medicines must beat it in a big clinical trial. That can only happen if there is a big advantage for the new medicine.

To catch up with rivals in creating drugs that hit a target called hsp90 (heat shock protein 90), Pfizer bought an outfit called Serenex. The logic, Ayres says, was that it was too far behind rivals like Bristol-Myers Squibb (nyse: BMY - news - people ) and AstraZeneca in developing drugs to hit this molecule, which repairs dysfunctional proteins. Block it, and more cancer cells should die.

Merck is taking a different approach, betting that an especially deep understanding of a biological pathway will allow it to design better clinical trials. Friend says that he is cognizant of the fact that he's trailing Pfizer, and that he is investing in IGF-1 only because he thinks Merck can develop a market for the drug by having a better scientific understanding of how the drug works--and testing it in populations, and as part of drug combinations, where it will be most effective.

Unlike Pfizer, which is testing a wide array of cancer drugs, Friend is focusing on medicines that are related in a few, distinct biochemical pathways. The idea is that his researchers will be able to better understand the biology of patients who will be helped by the drug. The key question, Friend says, is, "Can I be the smartest at understanding how that would work?"

Merck has started randomized Phase 2 trials in 240 patients in colon cancer. The trial can be made bigger, so that it could be used for Food and Drug Administration approval, if the initial results due later this year are positive. To better understand which patients will benefit from the drug, Merck is testing it on tumor samples from the Moffitt Cancer Center in Florida. The idea is that it might be possible to predict which patients will respond.

"It is a pretty big race," says Merck Vice President Eric Rubin.

Right now, despite the influx of cancer drugs into human tests, the field of oncology is in a lull. For a while, it was as if a new breakthrough cancer drug hit every year: Gleevec, Erbitux, Avastin. The past two annual cancer meetings held by the American Society for Clinical Oncology have delivered few such surprises.

"We're hitting a lot of base hits that move the science but don't mean a lot to patients," says Otis Brawley, chief medical officer of the American Cancer Society. He's calling for more government funding of basic research to help new ideas take root.

If IGF-1 fails, it wouldn't be the first time a rush to develop copycat cancer drugs has led drug firms into a dead end. One notorious example came when just about every major drug company in the mid-1990s rushed to develop drugs to block a cancer-causing gene called ras. The companies pressed ahead into trials even as evidence emerged that cancer cells had bypass mechanisms that would allow the tumors to sidestep the drugs' effects.

One company, however, was smart enough to ignore the industry wide peer pressure and abandon its ras project in the mid-1990s. Instead, it focused on treating cancer with monoclonal antibodies, an approach that was highly unpopular at the time. Smart move. That company, Genentech, is now the biggest seller of targeted cancer treatments in the world.

`Good' Cholesterol May Not Benefit Heart, Study Says

By Shannon Pettypiece

June 3 (Bloomberg) -- `Good' cholesterol that scientists have thought helped unclog arteries had no effect on heart disease in a study, casting doubt on a theory drugmakers have spent more than $1 billion pursuing.

Researchers studied people who have a genetic condition that causes them to produce very low levels of HDL cholesterol, expecting they'd be about twice as likely to have heart disease. Instead, they had no greater risk, according to a study published today by the Journal of the American Medical Association.

Pfizer Inc., Merck & Co. and Roche Holdings AG have spent years developing drugs that increase production of HDL cholesterol based on the theory that raising the so-called good cholesterol helps ferry artery-clogging plaque from the body. The new research throws that strategy into question and shows HDL plays no role in preventing heart attacks, said Anne Tybjaerg- Hansen, a study author and clinical biochemistry researcher at Copenhagen University Hospital.

``There is really no evidence that this method is going to work,'' said Tybjaerg-Hansen in a telephone interview. ``This theory has been around for a long time, but this study just doesn't support it.''

The reason may be that other HDL cholesterol research examined patients with high levels of triglycerides, the chemical form of fat. Triglycerides, not patients' low HDL levels, may have caused their increased heart risk, Tybjaerg-Hansen said.

Why Pfizer Flopped

This may explain why the experimental drug torcetrapib, which New York-based Pfizer spent more than $1 billion developing, raised HDL levels without providing heart benefits, the study said. Analysts had expected torcetrapib would have more than $14 billion in annual sales. Pfizer quit developing it in 2006 because it increased deaths. Whitehouse Station, New Jersey- based Merck and Basel, Switzerland-based Roche also are developing HDL-raising drugs.

Yale Mitchel, Merck vice president of cardiovascular disease research, said the study, which was small and in a rare patient population, won't persuade the company to change its plans for an HDL-raising drug given the large body of data suggesting HDL provides a benefit.

Merck has spent five years developing a drug called anacetrapib, which raises HDL by blocking the cholesterol ester transfer protein. The drug is in the third and final stage of testing necessary to gain regulatory approval.

`Too Attractive'

``The hypothesis on whether CETP inhibition is a benefit or not hasn't been tested and it is too attractive a mechanism to disregard right now,'' said Mitchel. ``We have to be careful about not over interpreting it at this point. There is a large contextual database that suggests low HDL levels are associated with an increased risk.''

Pfizer has said the company's HDL-raising research is temporarily on hold. Roche said its drug is in the final stages of testing and it will file for U.S. regulatory approval after 2011.

``We haven't had an opportunity to evaluate this study yet, but epidemiological data does show there is a strong inverse relationship between HDL and cardiovascular risk,'' said Roche spokesman Terence Hurley.

The idea that HDL helps purge artery plaque is based mostly on animal studies, which Tybjaerg-Hansen said are sometimes difficult to understand and apply to humans.

The new study looked at data collected from almost 57,000 Danish patients between 1976 and 2007, of which 148 had a rare genetic condition called Tangier disease that caused them to produce very low levels of HDL cholesterol.

The study adjusted for age and other factors that could raise the risk of a heart attack.

To contact the reporter on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net

Novartis Steals The Show

Chicago -

Retired PepsiCo executive David Scherb was in bad shape 15 months ago. Kidney cancer had spread to his lungs and one tumor became so big it ate through his sternum and bulged right through the surface of his skin. It was so painful he couldn't wear a shirt.

But last April, he started on a clinical trial of a new experimental kidney cancer drug from Novartis (nyse: NVS - news - people ) called RAD001. The pain declined, and by summer of 2007 the tumor was no longer visible. A full year later, the tumor remains in check. "If it wasn't for this drug, I don't feel like I would be here," Scherb says.

Novartis is emerging as the surprise winner at this year's annual meeting of the American Society of Clinical Oncology, the year's biggest cancer conference. The company looks to have a sure-fire new drug for kidney cancer patients who have failed other options. Its bone drug Zometa was unexpectedly shown to reduce risk of breast cancer recurring by 35%. And perhaps most intriguing of all, the same kidney drug seems to have big potential for treating advanced breast cancer.

The most immediate sales impact could come from the surprise finding that the company's bone-boosting drug Zometa slashed the recurrence of breast cancer in pre-menopausal women by about 35% in an 1,800 person trial, when combined with standard treatment. That could yield new sales for a drug that now has been used merely as supportive care to prevent fractures in patients with cancer bone metastases. The new study shows it may actually prevent new metastases. The mechanisms aren't entirely clear, but may be because the drug inhibits blood vessel formation in the bone.

The current data is in only one small set of breast cancer patients. Novartis is conducting a big study to see whether the dug can also prevent relapse in the much bigger group of postmenopausal women with breast cancer. But with little downside to giving the drug, many doctors probably won't wait, predicts Julie Gralow of the University of Washington.

"There will be great uptake," says Gralow. "People will say, 'Why not?" I'm losing bone, my insurance will pay, there is hardly any toxicity and it may decrease recurrence.' " The drug is given as a twice-yearly infusion.

In another study at the meeting, researchers reported RAD001 delays progression of kidney cancer by about two months in tough cases that had failed with other treatments. While not a huge effect, the results are all but certain to lead to approval of the drug, doctors said. It could establish RAD firmly as the agent of choice for those who have failed Pfizer's (nyse: PFE - news - people ) Sutent, the drug mostly commonly used for initial kidney cancer therapy.

This could cut into sales for Onyx Pharmaceuticals (nasdaq: ONXX - news - people ) and Bayer's (nyse: BAY - news - people ) Nexavar drug for kidney cancer. Wyeth (nyse: WYE - news - people ) also sells a kidney cancer drug that is similar to RAD001.

"There are a lot of treatment options for patients now," says Memorial Sloan-Kettering Cancer Center's Robert Motzer, who led the study. Together, the various new kidney cancer drugs "have changed the prognosis."

But kidney cancer may be "the tip of the iceberg" for RAD001, says David Epstein, president of Novartis' cancer unit. The drug, which hits a key growth-promoting molecule inside cells, called mTOR, is also showing surprising preliminary promise in treating advanced breast cancer patients. It appears to restore the effectiveness of Genentech's (nyse: DNA - news - people ) Herceptin drug after that drug has failed.

In one small trial from doctors in France of 13 patients who had failed on Herceptin, tumors shrank dramatically in six when RAD001 was added to the mix; in three the tumors vanished entirely. In another study of RAD in breast cancer, three out of of 22 patients had big tumor shrinkage, while the disease stabilized in another 13 for prolonged periods.

"The percentage of responses is dramatic. We usually don't see that," says UCLA oncologist Dennis Slamon, who played a pivotal role in developing Herceptin. He says mTOR may be a key resistance mechanism that cells use to evade the effects of Herceptin.

The results are highly preliminary. But Novartis' Epstein is so excited by the data he is considering jumping right from these trials into a large final-stage tests. "I tell people I want to be involved in one more drug like Gleevec" before retiring, Epstein says, referring to Novartis' breakthrough leukemia pill. He hopes RAD001 is it.

Cancer Drug Winners And Losers

Chicago -

Every year, drug companies big and small make their way to the annual meeting of the American College of Clinical Oncology, a showplace for new cancer medicines.

The data presented at ASCO can have a huge impact both on the share prices of drug firms and on the long-term sales of their medicines. Here's a roundup of the most important drug studies from the meeting and a look at how they will affect the companies involved.

Winner: Novartis (nyse: NVS - news - people )

The pharmaceutical giant stole the show. Zometa, a drug already approved to treat weakening bones in cancer patients, slashed the recurrence of breast cancer in pre-menopausal women by about 35% in an 1,800-person trial, when combined with standard treatment. It's not clear why, but it may prevent tumors from spreading (see "Novartis Steals The Show").

Novartis' kidney cancer treatment RAD001 delayed tumor growth by two months in patients who had failed Pfizer's (nyse: PFE - news - people ) Sutent. The drug would compete with Nexavar, from Onyx Pharmaceuticals (nasdaq: ONXX - news - people ) and Bayer (nyse: BAY - news - people ), and Torisel, from Wyeth (nyse: WYE - news - people ), but could benefit from a clinical trial designed that tested it specifically as an option in Sutent failures. The other drugs are approved as first choices, and compete with Sutent, which has the lion's share. Novartis shares are up 2.3% to $53.50.

Novartis has 13 cancer drugs in development, more than any company but Pfizer, AstraZeneca (nyse: AZN - news - people ) and Genentech (nyse: DNA - news - people ). It expects to soon rank second in oncology sales after Genentech.

Loser: ImClone Systems (nasdaq: IMCL - news - people )

ImClone and its partners, Bristol-Myers Squibb (nyse: BMY - news - people ) and Merck (nyse: MRK - news - people ) KgAA disclosed last September that its Erbitux had extended survival in patients with non-small cell lung cancer in a clinical trial. But the final results--a five-week extension of life for the average patient--were barely statistically significant. That will allow ImClone and its partners to grab sales in the lung cancer market, especially in those patients who can't take Avastin.

But it may not make up another result: clear proof that a gene test can help predict whether Erbitux is going to help colon cancer patients. Patients with a mutant version of a gene called KRAS comprise 40% of the people getting Erbitux, and they've been getting no benefit at all. As Forbes reported two weeks ago, this could lead to a sales slump. ImClone shares dropped 6% in early morning trading to $40. (See: ImClone's Gene Test Battle.)

Winner: Genentech

Genentech's Avastin won't face as much competition as many feared from ImClone's Erbitux in non-small cell lung cancer, but new data also supported Avastin's use in breast cancer. Shares are up 3.4% to $73.

Winners: Infinity Pharmaceuticals (nasdaq: INFI - news - people ) and Exelixis (nasdaq: EXEL - news - people )

On Saturday, Infinity announced it was skipping mid-stage trials and going directly from early-stage safety and efficacy tests into a study designed to get its IPI-504 approved as a treatment for patients with stomach tumors who are no longer being helped by Novartis' Gleevec or Pfizer's Sutent. It's a small market, but it could result in a speedy approval.

Sunday Exelixis also said it is jumping directly into an approval trial, known as a Phase III study, from very early stage tests of its cancer drug XL184 in medullary thyroid cancer. It will be the first of Exelixis' drugs to enter phase III. Fifty-three percent of patients taking the drug saw their tumors shrink. Infinity shares jumped 11% to $8.13, and Exelixis shares slipped 2% to $6.20.

Winner: Avant Immunotherapeutics (nasdaq: AVAN - news - people )

Avant is developing an immunotherapy, or cancer vaccine, for brain tumors with Pfizer. The vaccine is targeted against a mutated protein that only occurs in brain cancer cells. In a phase II trial, the average patient with glioblastoma who received the therapy, known as CDX-110, lived 33 months, twice as long as expected. Avant shares are up 36% to $19.20.

"When we look at our patients they live at least twice as long" as would be expected, says Duke University neurosurgeon John Sampson, who invented the vaccine. "We have a number of patients three or four years out with no evidence of tumors."

Wall Street: Genentech to lead lung cancer market

NEW YORK -

Genentech Inc.'s drug Avastin will likely remain dominant in the lung cancer market over rival ImClone Systems Inc.'s Erbitux, several analysts said Monday following the release of clinical data at the American Society of Clinical Oncology's annual meeting in Chicago.

ImClone (nasdaq: IMCL - news - people ) said adding Erbitux to standard chemotherapy added about 5 weeks to a patient's life when compared with a chemotherapy regimen alone. The FLEX study results were positive, but Wall Street still expects Avastin prescriptions to lead Erbitux because the drug's survival benefit is nearly a month longer.

However, many patients can't take Avastin because of blood disorders or blood thinner regimens, and if approved for lung cancer, analysts think Erbitux will be the prescription of choice for that patient population - leaving ImClone and partner Bristol-Myers Squibb Co. (nyse: BMY - news - people ) with at least some portion of a lucrative market. Lung cancer is the leading cause of cancer death in the United States.

"Initial feedback from physicians confirms our theory that Avastin will still be considered the gold-standard front-line agent and Erbitux's use will be predominantly in Avastin-ineligible patients," said Piper Jaffray (nyse: PJC - news - people ) analyst Thomas Wei, in a note to investors.

Avastin, which is FDA-approved to treat colon, lung and breast cancer, is Genentech (nyse: DNA - news - people )'s key revenue driver and brought in just under $2.3 billion in 2007. Erbitux - ImClone's only product - is approved to treat colon and head and neck cancers and the company hopes it will be approved for lung cancer.

"FLEX (study data) is Erbitux's ticket into the lucrative lung cancer market," said Cowen and Co. analyst Eric Schmidt. He said that with 40 percent to 50 percent of lung cancer patients ineligible for Avastin treatment, ImClone and Bristol-Myers could see peak Erbitux sales in lung cancer of $700 million.

Dr. Edward Kim, an assistant professor of medicine at the University of Texas' M.D. Anderson Cancer Center, said the addtiional five weeks of survival time can be significant for many of the advanced lung cancer patients he sees each week. Those patients are often told they have less than a year to live, even with treatment.

"When I put my physician hat on and I'm seeing patients, I'm extremely happy that I have more options to offer patients," he said in an interview with The Associated Press.

Other lung cancer developments at ASCO included an M.D. Anderson Center study showing Pfizer Inc. (nyse: PFE - news - people )'s arthritis drug Celebrex could help prevent lung cancer in heavy smokers. The findings are still early, though, and Kim said additional work on identifying risk factors and assessing the drug's benefit need to be done.

"We'll be looking at tissue to try and define who is at highest risk for cancer and who may benefit the most from a drug like Celebrex," he said.

Meanwhile, Exelixis Inc. (nasdaq: EXEL - news - people ) said midstage study data showed its drug candidate XL-647 appeared to attack lung cancer tumors. The company hopes to start a late-stage study by the second half of 2009.

Shares of South San Francisco, Calif.-based Genentech rose $2.47, or 3.5 percent, to reach $73.33 in afternoon trading, while shares of New York-based ImClone fell $2.63, or 6 percent, to $40.95.

New York-based Pfizer saw shares fall 26 cents to $19.10, while shares of South San Francisco, Calif.-based Exelixis fell 20 cents, or 3.1 percent, to $6.12.

Novartis' Zometa Cuts Risk of Breast Cancer Returning

May 31 (Bloomberg) -- Novartis AG's bone-strengthening drug Zometa unexpectedly cut the risk that breast tumors would return in a study of young women getting the therapy, which protects bones from the ravages of cancer.

The trial, showing just two injections a year of Zometa slashes cancer recurrence by 35 percent, offers a novel way to fight cancer and expands the market for the medication. Novartis, Switzerland's second-largest drugmaker, currently sells Zometa to treat malignancies that spread to the bone. It also is used at a lower dose for osteoporosis.

Breast cancer, the most common tumor in women, will be diagnosed in more than 180,000 patients in 2008, according to the American Cancer Society. In the study of 1,803 patients, about 6 percent of women getting Zometa suffered a relapse within five years, compared with 9 percent who didn't receive the drug, according to the study presented at the American Society of Clinical Oncology meeting today in Chicago.

``We have shown we can keep the cancer away, and that is great news for patients,'' lead author Michael Gnant, professor of surgery at the Medical University of Vienna, said in an interview. ``Future research will focus on optimizing the administration schedule and the dose, and determining which patients will benefit the most from treatment.''

Novartis, based in Basel, Switzerland, sells Zometa in more than 80 countries and helped fund the study. It is the first to show the medication can slow cancer in addition to protecting bones. Women getting the drug had fewer problems with all types of recurrences, including local and distant disease, tumors in the opposite breast and in the bone, the study found.

Hormone-Fueled Cancer

While it is not clear how Zometa slows cancer, researchers think it is because it makes the cell environment hostile to malignant cells, Gnant said.

The study involved younger women who hadn't gone through menopause and had early stage breast cancer that was fueled by hormones. All patients were given treatment to suppress their ovaries. They also were given the generic drug tamoxifen or AstraZeneca Plc's Arimidex, with or without Zometa.

There were no differences in results between patients getting tamoxifen and Arimidex, the study found. AstraZeneca also funded part of the research.

Few women in the study received chemotherapy, once a standard treatment. The results show many women with early stage disease may fare well without chemotherapy, said Eric Winer, professor at Harvard Medical School and director of the breast oncology program at the Dana-Faber Cancer Institute in Boston.

Other Cancers

Zometa may also benefit post-menopausal women and patients with other types of cancer, Gnant said.

There were no cases in the study of osteonecrosis, which causes jaw-bone damage, or kidney harm, side effects linked to drugs like Zometa.

Zometa, which belongs to a group of drugs called bisphosphonates, is thought to reduce cells' ability to travel and stick to each other and the bone, to stimulate cancer fighting immune cells, choke the growth of blood vessels that feed cancer cells and cause cells to self destruct.

Zometa had first-quarter sales of $331 million. It's also sold as Aclasta and Reclast in the U.S. and in Europe as an infusion to treat osteoporosis.

A New Use

Zometa isn't widely used now for osteoporosis because the drug is given intravenously, and most general practitioners don't have the infusion capabilities needed to administer it, said Julie Gralow, chair of ASCO's communications committee and associate professor at the University of Washington. Cancer doctors do have the equipment, and the study findings are likely to dramatically boost use of the drug, she said in an interview.

``I think this will change practice,'' Gralow said. ``It will get great uptake in the U.S.,'' she said.

Though the study included only premenopausal patients with hormone-sensitive breast cancer, the drug is exceedingly safe and will likely be given to a wide range of breast cancer patients, she said.

Another, broader study including women before and after menopause getting a variety of cancer treatments is under way, Gralow said. The results of the study, using a more intensive dose of Zometa, will be available by the end of the year.

Until those results are available, it would be a mistake to prescribe the drug widely for all women with breast cancer, Winer said.

Between 20 percent and 25 percent of breast cancer patients are premenopausal, Winer said. Half of them have tumors that are fueled by hormones, or about 25,000 women a year, he said.

``In my humble view, it's entirely the wrong message that all women should be getting this drug starting tomorrow,'' he said in an interview. ``It's not a terribly toxic drug, but all drugs have toxicities. Within the narrowly defined group of women who got the drug, this study would give one strong impetus to use Zometa.''

To contact the reporters on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net;

Merck KGaA's Erbitux Drug May Get Edge on Avastin

May 29 (Bloomberg) -- A single gene may help Merck KGaA and ImClone Systems Inc. find which patients are best treated with their Erbitux cancer drug, helping gain an edge over Roche Holding AG and add 600 million euros ($938 million) in sales.

Merck may win European backing as soon as today to sell the medicine for deadly bowel tumors that have spread throughout the body. Results of a study to be released June 1 may show the drug is especially useful for the 60 percent of colorectal cancer patients who carry an intact version of a gene called kras.

Data that enable doctors to link the kras gene to successful treatment may change the way oncologists treat the cancer, increasing the use of Erbitux and allowing it to compete against Roche's Avastin, said Amit Roy, an analyst at Citigroup. Avastin, the first of a new generation of targeted drugs to win approval for treating malignant bowel cancer, generated $3.4 billion for Basel, Switzerland-based Roche last year.

``Erbitux is very impressive,'' Dirk Jaeger, an oncologist at the University of Heidelberg said. ``We can already say it is as good if not better than Avastin for patients that carry unmutated kras.''

Jaeger routinely employs a test that can cost about 120 euros to detect the version of kras a patient carries. The new research, to be presented at the American Society of Clinical Oncologists meeting in Chicago, may persuade other doctors to follow the same procedure.

Shares Gain

Darmstadt, Germany-based Merck rose 43 cents, or 0.5 percent, to close at 92.71 euros in Frankfurt trading today. The stock has gained more than 7 percent this year on optimism Erbitux may win wider use against colon cancer. Investors are also awaiting results of a clinical trial to be presented at the research meeting that may show that Erbitux may extend survival of lung cancer patients longer than the average eight weeks already shown in studies of Avastin.

The shares of Roche, which developed Avastin with South San Francisco, California-based Genentech Inc., have dropped about 8 percent in the period.

``Avastin works regardless of kras status - it is the only option for patients with mutated kras and the best option for patients with wild-type kras,'' Roche spokesman Alexander Klausner said in an e-mailed message.

Erbitux is approved to treat head and neck tumors as well as colon cancer that has progressed despite treatment with other drugs. Merck, which bought non-U.S. rights from New York-based ImClone in 1998, is conducting research in other tumor types and for wider use of the medicine to capture additional sales. The German drugmaker was the first to win approval for Erbitux when Swiss regulators cleared the treatment for sale in December 2003.

Crystal Trial

ImClone shares fell 30 cents to $42.82 in Nasdaq Stock Exchange trading.

Results last year of the so-called Crystal trial, which the German drugmaker used to support the European application to market Erbitux against colon cancer, showed the treatment slowed the disease's progression by 28 days compared to conventional drug therapy. Morgan Stanley analyst Andrew Baum said this advantage may still not be enough for European regulators to make Erbitux a first-choice treatment over Avastin.

To find those patients who may respond best to Erbitux, researchers examined tissue removed from people enrolled in the Crystal trial to test whether their tumors contain an intact or mutated version of the gene.

Speculation

Other smaller studies have suggested that the cancer may progress more slowly in patients with a normally functioning kras gene who are treated with Erbitux and Amgen Inc.'s Vectibix. That has prompted speculation the same effect may also be demonstrated in the Crystal trial.

``Kras is important, it helps us to tell in advance who will benefit,'' said Eric van Cutsem, an oncologist at the University of Leuven in Belgium, who led the Crystal study.

Kras signals the body to make a protein linked to the growth of cells. In some tumors, the so-called ras pathway goes haywire, telling cells to multiply non-stop. Erbitux can help halt the message if the kras protein is intact. The drug doesn't work when the kras is damaged, the Crystal study may show. Scientists don't know why the gene gets damaged in certain patients.

The ability of Erbitux to take on Avastin depends on how long the medicine can stall the disease. The benefit of one over the other is difficult to judge based on available data because each was paired with different chemotherapy treatments in clinical trials, Jaeger said.

Man-Made

Citibank's Roy said patients with normal kras should have an even better response than the 28-day benefit seen in the Crystal trial. Those patients could see their cancer stop growing for as long as 1.5 months, he said in a note to clients.

``It will take away sales slowly at first, but we do expect Avastin to suffer,'' Markus Mayer, an analyst at UniCredit SpA in Munich said. Mayer raised his Merck rating to ``buy'' from ``hold'' on May 19.

Erbitux is a man-made antibody, a substance naturally produced by the immune system in response to infection. The drug works by latching onto cancerous cells and blocking replication. The flaw in the kras gene, which holds the blueprint for part of a messaging system inside the cell, is thought to render Erbitux ineffective.

Data that prove Erbitux works in people with a normally functioning kras gene would allow doctors to find the most- suited patients and offer health-care payers a way to save costs, analysts say.

``This is good for patients, good for doctors and good for us,'' said Oliver Kisker, who leads the clinical development of a group of cancer drugs at Merck, in an interview. ``This really differentiates us from the competition.''

To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net.

Amgen says osteoporosis drug tops Merck's in trial

NEW YORK -

Biotechnology company Amgen Inc. said Wednesday that a head-to-head study showed its late-stage osteoporosis drug denosumab was more effective than a competing drug from Merck & Co.

Amgen said that in a study of 1,189 postmenopausal women, denosumab showed greater improvement in bone mineral density at various skeletal sites, including the hip and spine, compared to Merck's Fosamax. Results were presented at a medical conference in Barcelona, Spain.

The results mirrored those of a head-to-head trial released May 19 among women who were transitioned from Fosamax to denosumab.

Denosumab is given twice a year as a subcutaneous injection, while Fosamax is taken once a week as a pill.

Amgen also said it is awaiting results from a late-stage trial expected later this year examining anti-fracture efficacy that it will use to support a denosumab application with the Food and Drug Administration.

NEW YORK -

Biotechnology company Amgen Inc. said Wednesday that a head-to-head study showed its late-stage osteoporosis drug denosumab was more effective than a competing drug from Merck & Co.

Amgen said that in a study of 1,189 postmenopausal women, denosumab showed greater improvement in bone mineral density at various skeletal sites, including the hip and spine, compared to Merck's Fosamax. Results were presented at a medical conference in Barcelona, Spain.

The results mirrored those of a head-to-head trial released May 19 among women who were transitioned from Fosamax to denosumab.

Denosumab is given twice a year as a subcutaneous injection, while Fosamax is taken once a week as a pill.

Amgen also said it is awaiting results from a late-stage trial expected later this year examining anti-fracture efficacy that it will use to support a denosumab application with the Food and Drug Administration.

Merck drug reduces bone breakdown in cancer patients

CHICAGO -

Drug maker Merck & Co. on Tuesday said a mid-stage trial of an osteoporosis drug in women with breast cancer reduced the breakdown of bone.

Patients treated with the drug, odanacatib, showed a 77 percent reduction from baseline in bone breakdown compared to 73 percent of those treated with Novartis AG's Zometam, Merck said. Women with breast cancer are often susceptible to cancer spreading to bones, a condition known as bone metastases

Whitehouse Station, N.J.-based Merck said that results from the trial would be presented June 3 at the American Society of Clinical Oncology conference.

Merck added that it would conduct late-stage studies of odanacatib in both breast and prostate cancer based on the results.

Odanacatib is already in late-stage trials for the treatment of osteoporosis.

Shares of Merck rose 42 cents to $39.16 in morning trading.

Novartis Looks For Magic Pill

LONDON -

The Swiss drugmaker Novartis has been given the green light by the European Commission to sell Extavia, a multiple sclerosis drug. And although the firm has good reason to be happy, it shouldn’t be overjoyed as it faces tough competition.

Norvartis (nyse: NVS - news - people ), whose largest division of pharmaceuticals develops and manufactures prescription drugs to treat various diseases, said it will launch Extavia in the United States and Europe in the first half of next year.

But analysts warn the company will struggle to make ends meet in an already crowded market, prompting its shares to hardly move. Novartis shares rose 0.4%, or 2 cents, to $53.03 in morning trading in New York.

“It is difficult to know what market percentage Novartis is going to achieve with this new drug,” Tom Muller, an analyst with Theodoor Gilissen, told Forbes.com.

“They have to start from scratch. It will take them at least a couple of years to have a strong position in the market with solid competitors,” Muller said.

One of Novartis main rivals is German drugmaker Bayer (nyse: BAY - news - people ), which produces an already effective MS drug treatment of MS, Betaseron.

Novartis and Bayer settled a dispute over Betaseron in a deal that gave Bayer full control of the product while allowing Novartis to launch a version in 2009. Bayer's sales have been affected by copycat versions of its drugs in America and Europe.

Extavia is the first in a new portfolio of medicines from Novartis that is planned to include both established treatments and innovative therapies for patients with MS, the group said.

Multiple sclerosis, a progressive and debilitating disorder caused by the destruction of myelin, is the most common disorder of the central nervous system in young adults.

Genentech, Biogen's Rituxan fail late-stage lupus study

NEW YORK -

Biotechnology companies Genentech Inc. and Biogen Idec Inc. said Tuesday their drug Rituxan failed a late-stage study involving lupus patients.

The drug, which is already approved to treat non-Hodgkins lymphoma and rheumatoid arthritis, failed to prompt a response in patients when compared with placebo in the 52-week study.

The drug also failed to meet any of its six secondary goals.

"We are disappointed in the results of this Phase II/III study, but we understood from the outset the significant challenges in developing treatments for systemic lupus erythematosus," said Dr. Hal Barron, Genentech (nyse: DNA - news - people )'s senior vice president of development and chief medical officer, in a statement.

The company has another ongoing late-stage study on lupus nephritis patients and said that will continue. Lupus nephritis is an inflammation of the kidney caused by lupus, a chronic inflammatory disease. Results from that study are expected in the first quarter of 2009.

Shares of Cambridge, Mass.-based Biogen fell $2.75, or 4.3 percent, to $61.92 in morning trading Tuesday.

Shares of South San Francisco, Calif.-based Genentech fell $3.25, or 4.4 percent, to $69.91.

Study says FDA allowed risky tests of blood substitutes

CHICAGO -

Experimental blood substitutes raised the risk of heart attack and death, yet U.S. regulators allowed human testing to continue despite warning signs, says a scathing new report.

The U.S. Food and Drug Administration fell short, the report contends, even as red flags popped up during studies by five biotech companies. Rules barred the agency from releasing company trade secrets, and that kept some information hidden and may have led to unnecessary heart attacks and deaths, wrote the authors, who are government scientists and consumer advocates.

"There shouldn't be secret science," said the lead author of the report, Dr. Charles Natanson, of the National Institutes of Health Clinical Center. Safety data need "to be made public expeditiously so science can build on the mistakes" of previous research, he said.

The report, being published online Monday by the Journal of the American Medical Association, is the latest analysis of the risks of blood substitutes, which have been in testing for more than a decade.

It was written by scientists with the NIH Clinical Center and advocates with the watchdog group Public Citizen. The clinical center in Bethesda, Md., seeks to ensure the safe and ethical conduct of clinical research.

A safe replacement for blood would be a breakthrough for medicine and a big money-maker for companies that produce it. It could save lives on battlefields. Unlike ordinary blood, it could, theoretically, be stored for years without refrigeration. It also would work with any blood type and would not carry infections like hepatitis or the AIDS virus.

By the end of 2000, a dozen studies of blood substitutes had been completed. By then, FDA officials would have known enough about cumulative risks to put a halt on further experiments, the JAMA report contends.

But the FDA looked at each product and each use separately - in surgery, in trauma, in stroke patients - rather than pooling the results to get a fuller picture of the risk, Natanson said.

In 2006, after a lawsuit by Public Citizen protesting a closed-door hearing, the FDA halted a test by the Navy, which planned to use a blood substitute on civilian trauma victims. Such tests raised ethical concerns about giving trauma patients an experimental product without their consent.

Dr. Jay Epstein, director of FDA's office of blood research and review, defended the agency's decisions about human testing of the products despite risks. The agency has found enough differences among the individual products and their intended uses to allow some studies to proceed, Epstein said Friday in a conference call with reporters.

Currently, there are no approved blood substitutes or clinical studies of them in the United States. However, American companies are testing them on people in South Africa and seven European countries. South Africa has approved one of the products, Hemopure, made by Biopure Corp. (nasdaq: BPUR - news - people ), based in Cambridge, Mass., for use in anemic surgery patients.

"It is highly unlikely, I'd say impossible, that any of these countries are aware of the risk," said study co-author Dr. Sidney Wolfe of Public Citizen.

In the new report, researchers analyzed 16 randomized controlled studies of five different blood substitutes. More than 3,700 patients were involved. The studies included elective surgery, trauma and stroke patients.

Researchers found a 30 percent higher risk of death overall for patients who received transfusions using the blood substitutes; 164 of those patients died. Among those who received ordinary blood products or saline transfusions, 123 died.

The risk of heart attack was nearly tripled in the groups receiving blood substitutes. There were 59 heart attacks in that group compared with 16 heart attacks in the group that didn't get the new products.

Experts speculate that hemoglobin in the blood substitutes scavenges nitric oxide from the blood, causing blood vessels to constrict and sticky platelets to build up. That increases the risk of heart attacks.

The report comes as the besieged FDA reacts to numerous other troubles.

Contaminated blood thinner from China recently highlighted the agency's shortage of inspectors abroad. In September, an inspector general's report found the FDA does little to oversee human safety in clinical trials by drug companies.

Last year, new legislation was adopted to give the FDA more power to act when problems emerge with drugs already on the market - action prompted by the furor over the withdrawal of the risky painkiller Vioxx in 2004.

Even with the new law, the FDA needs more financial support, Natanson said.

"They're hardworking people. They're trying their best," he said. "If we really want them to be an agency that is going to protect us, we need to support them."

But companies may be withholding key information from the FDA, said one former biotech employee.

Dr. William Hoffman, former chief medical officer at Biopure, left the company in 2000 after management prevented him from telling the FDA that he believed one of the company's studies should be stopped. Hoffman said Biopure management has changed since then.

"The FDA knows more than anyone at any of the individual companies, but they may not know the whole story," Hoffman said. "There may be information withheld from the FDA."

Most developers of blood substitutes are one-product companies, and their existence depends on the fate of the product, said Hoffman, now director of cardiac-surgery critical care at Massachusetts General Hospital in Boston.

"Drug development is expensive. In order to get a drug to market you have to keep good news coming out so the value of the company remains high," Hoffman said.

Two companies whose products were included in the new report called the analysis flawed.

"There are vast differences among these products that make any pooling of data flawed, especially across different clinical experiences," Biopure vice president Dr. A.G. Greenburg wrote in an e-mail.

Dr. Steven Gould, CEO of Evanston, Ill.-based Northfield Laboratories Inc. (nasdaq: NFLD - news - people ), said in a statement that pooled analysis can be "a useful tool to raise questions" involving a class of drugs, but is "not designed to provide answers about specific products or to examine fully the risk-benefit ratio of any particular product."

Gould said Northfield would present a summary of research on its product, PolyHeme, at an FDA discussion of the safety issues this week.

In disclosures required by JAMA, Natanson reported that he is an unpaid consultant to the FDA on Hemopure and was once paid $10,000 to review a blood substitute study by Hemosol Corp. of Canada.

Why Glaxo Bought Sirtris

Tuesday night, drug giant GlaxoSmithKline announced it was buying Sirtris Pharmaceuticals of Cambridge, Mass., for $720 million in cash. Sirtris has generated a lot of hype because it is developing anti-aging drugs, some of which are based on resveratrol, a chemical in red wine.

The company's business plan was based on developing drugs based on enzymes called sirtuins, which are involved in aging. These medicines, it is hoped, could mimic the life-prolonging effects of a calorie-restricted diet. Sirtris Pharmaceuticals (nasdaq: SIRT - news - people )' (nasdaq: SIRT - news - people ) first drug is a treatment for diabetes.

The stock market hasn't been kind to Sirtris, which was trading at $12, down 45% from its 52-week high. But GlaxoSmithKline (nyse: GSK - news - people ) decided the market had it completely wrong, paying $22.50 a share in the buyout deal.

It's one of the bigger biotech deals this year, and, like Takeda's $9 billion acquisition of Millennium Pharmaceuticals (nasdaq: MLNM - news - people ), also of Cambridge, Mass., it's a purchase of a U.S. biotech by a foreign acquirer. Sixty percent of the $80 billion spent purchasing U.S. health care firms this year was spent by foreign buyers.

Forbes chatted with Patrick Vallance, head of drug discovery at GlaxoSmithKline, to find out why the drug maker decided to make such an expensive purchase of an essentially unproven medicine. Excerpts of the conversation are below.

Forbes.com: Why buy Sirtris?

Vallance: Great pathway, real opportunity for transformational medicines, the leading group in terms of their insight into those pathways, real progress in terms of the chemistry and small molecule of those enzymes. We're very keen to have deep expertise in areas we see as transformational. For us, Sirtris looked like a great place to invest, a great group of scientists who we think are going to deliver.

You've said you want to keep Sirtris basically intact. How do you keep researchers from jumping to other biotechs?

We'd like to retain the entire team. We're going to enable these people to make the medicine they really want to make. What we're going to do is enable them to turn that from where they are now to creating a medicine to treat disease. That is even more important than the various financial measures we've put in place to try and retain people.

How did the weak dollar play into this deal?

Not at all. It's nice it's a weak dollar, but that wasn't a starting position, we weren't weighing this up against something elsewhere in the world. We wanted to make sure we paid a fair price for it. Clearly the price is what it is, and [with] the exchange rate what it is, we think we paid the right price for what we bought.

Why didn't the stock market see the same value in Sirtris that you do?

It's high-risk. It's an area of science that's fascinating. Like a lot of areas of science, it's got its controversies, and like many biotechs in this stage, with a good pathway, this hasn't been proven yet. It has to be proven with a medicine. We're forever investing in high-risk things. That's what we do in the pharmaceutical industry. We're pretty clear that we see a big opportunity here.

Are you interested in the drugs Sirtris has already created, or in creating new medicines based on the company's knowledge of sirtuin biology?

I think the theme is Sirtris has done a great job in both biology and chemistry. They have a great team. Can we bring new things to the table? Of course. One area is expertise in pre-clinical research and in formulation. Another is a long experience in small-molecule drug discovery.

The whole idea is that we not swamp Sirtris. Now they can do things with a scale and know-how that's much more difficult if you're in a group of 60 people than if you're in a large organization that has done this for years.

Biogen Idec 1Q profit up 24 percent, helped by MS drug

BOSTON -

Sales of a new multiple sclerosis drug helped lift Biogen Idec Inc.'s first-quarter profit by 24 percent to beat Wall Street expectations, and the biotechnology firm raised its full-year earnings forecast.

The Cambridge, Mass.-based company said Wednesday it earned $163.1 million, or 54 cents per share in the three months ended March 31, compared with a profit of $131.5 million, or 38 cents per share, in last year's first quarter.

Excluding several one-time charges, Biogen Idec (nasdaq: BIIB - news - people )'s profit was $250 million, or 83 cents per share. On that basis, the profit beat expectations of analysts surveyed by Thomson Financial, who had forecast earnings of 79 cents per share, on average.

First-quarter revenue rose 32 percent to $942.2 million - soundly beating analysts' consensus forecast of $890.1 million - from $715.9 million a year ago.

Citing its first-quarter gains, Biogen Idec raised its financial forecast for the full year. The company now expects a 2008 profit of $3.25 to $3.45 per share, excluding one-time charges and gains, up from the company's previous guidance in February for $3.20 to $3.35.

Analysts' latest estimate was for a 2008 profit of $3.30 per share.

Its shares rose 15 cents to $64.77 in morning trading Wednesday.

Jim Mullen, Biogen Idec's chief executive, said "prospects for the company have never been better," based on the first-quarter momentum and upcoming releases of data from drug clinical trials.

The biggest driver of Biogen Idec's quarterly gains was a more than tripling in sales of Tysabri, an MS treatment that brought in $114.7 million in revenue for Biogen Idec. The medication, which Biogen Idec developed with Ireland-based partner Elan Corp. (nyse: ELN - news - people ), brought in $29.7 million in revenue for Biogen in last year's first quarter, shortly after the drug was reintroduced to the market with distribution restrictions to address safety concerns involving a rare brain disorder.

About 26,000 patients were taking Tysabri at the quarter's end, up from 21,000 at the end of last year.

Sales of Avonex, a 12-year-old MS treatment, rose 19 percent in the latest quarter to $536 million.

Biogen Idec's share of revenue for Rituxan, a treatment for non-Hodgkins lymphoma and rheumatoid arthritis, rose 19 percent to $247 million. Biogen Idec co-promotes Rituxan in the U.S. with Genentech Inc. (nyse: DNA - news - people )

Biogen Idec's earnings report came before an expected proxy battle at the company's annual meeting, which has not been scheduled.

Activist investor Carl Icahn, who became a major Biogen shareholder last year, has proposed a slate of three nominees to the company's board. Last week, the company rejected Icahn's nominees.

Icahn triggered a two-month effort by Biogen last fall to seek a buyer for the company. The search ended without any definitive bids, and Icahn accused the firm of rigging the search to fail. The company has said it expects to remain independent.

Biotech drug sales may disappoint in 1Q

NEW YORK -

While biotechnology companies are expected to meet or beat Wall Street's first-quarter profit projections, several analysts have voiced concern about slowing sales growth of key blockbuster drugs.

Having spoiled investors and Wall Street over the years with its double-digit growth and better-than-expected results, Genentech Inc. (nyse: DNA - news - people ) found the bar set very high when it kicked off the sector's earnings season last Thursday.

Analysts glossed over the South San Francisco, Calif.-based company's better-than-expected 12 percent jump in profit, and instead focused on slower-than-anticipated growth in sales of cancer drug Avastin.

Avastin is Genentech's key revenue driver, and Wall Street had hoped the Food and Drug Administration's additional approval for the drug's use in breast cancer would drive sales up more than 13 percent as reported.

The success of products including Avastin, Herceptin and Lucentis have fueled Genentech's growth year after year, but as the drugs saturate the market, sales growth is moderating.

Furthermore, Genentech's reliance on just a few drugs to drive revenue expansion has been a nagging issue for Wall Street. The company has multiple late-stage studies ongoing, but they are mostly for new uses of already approved drugs.

"These franchises, combined with more modest growth from existing products, have allowed Genentech to post industry leading growth over the last few years," said Cowen and Co. analyst Eric Schmidt, in a note to investors. "But looking forward, earnings are projected to decelerate significantly, reflecting higher baseline sales and the maturation of several markets."

Thousand Oaks Calif.-based Amgen Inc. (nasdaq: AMGN - news - people ) may also post weaker-than-expected revenue, though Wall Street is mixed on whether sales of its anemia drugs Aranesp and Epogen have leveled off. Sales of the drugs have fallen over the last several quarters because of safety concerns and stricter labeling.

The quarter was a busy one for Amgen. In addition to weathering safety issues, Amgen saw its shares fall to a year-low as Roche Holding (other-otc: RHHBY.PK - news - people ) AG came closer to getting its rival anemia drug Mircera to market. The companies are entangled in a patent dispute over the drug and a federal judge is expected to rule on a permanent injunction against Mircera in June or July.

Meanwhile, Amgen struck a $1.8 billion deal with Takeda Pharmaceuticals in February to sell its Japanese unit and development rights, and also released positive late-stage study data on its osteoporosis drug candidate denosumab.

Amgen is scheduled to release first-quarter results April 24.

When Cambridge, Mass.-based Biogen Idec Inc. (nasdaq: BIIB - news - people ) reports first-quarter earnings on April 23 Wall Street will be watching for a slowdown in sales of its multiple sclerosis drug Avonex, amid tougher competition.

Furthermore, Biogen's controversial MS drug Tysabri received a positive boost during the quarter from the FDA when it was also approved to treat Crohn's disease, but reports of higher rates of liver injury added more concern to a drug with a long safety-issue record.

While its peers are feeling the negative effects of relying on just a few products, Gilead Sciences Inc. (nasdaq: GILD - news - people ) is expected to post another strong quarter of growth from HIV treatments Atripla, a three-in-one drug, and Truvada. Sales could also be helped by a recent study showing a higher risk of heart attack associated with competing HIV treatment abacavir, or Ziagen, made by GlaxoSmithKline (nyse: GSK - news - people ) PLC.

Gilead is scheduled to report first-quarter earnings Wednesday.