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Event – Roche facing risky Avastin appeal

Date June 24, 2011

Roche’s landmark appeal against the FDA’s ruling in December to rescind Avastin’s conditional approval in breast cancer will be heard next week and the chances of further negative press for its flagship product seem high.

Roche is the first company to refuse to voluntarily withdraw use of a product at the FDA's request, so all participants at the public hearing will be in uncharted waters (Roche fighting Avastin's corner as support officially withdrawn in breast cancer, December 17, 2010). The last six months have seen some intense lobbying and heated exchanges between Roche and the regulator, so sparks could fly at what is likely to an emotionally charged meeting, although the regimented agenda suggests the FDA is keen to keep a tight lid on proceedings. The odds appear stacked against  Roche gaining much from the hearing, although with use of  Avastin in breast cancer already written off by most analysts, the Swiss group also has little to lose.

Product  Avastin 
Company  Roche 
Market cap  $133bn 
Total product NPV  $30.2bn 
Total NPV % of market cap  23% 
Event specific NPV (breast cancer)  $1.8bn 
Event specific NPV % of market cap  1% 
Event type  FDA appeal hearing on Avastin breast cancer withdrawal 
Date  28-29 June 2011 

Intense

In July last year the Oncologic Drugs Advisory Committee (ODAC) voted overwhelmingly, 12-1, to withdraw the license for Avastin to be used in patients with metastatic breast cancer. Use of  Avastin in this setting was only ever granted conditional approval, in early 2008, a controversial decision in itself given a previous negative advisory committee vote on the drug’s benefit to breast cancer patients.

The FDA's decision was based on the weight of evidence from four clinical studies showing no overall survival benefit and limited effect in slowing disease progression, as well as significant side effects, including severe and fatal cardiovascular events.

Roche’s appeal is mainly being made on the grounds the FDA’s decision is not in the public interest, given continuing support for the drug from many oncologists and patient groups. Roche is proposing a new phase IV trial to try and answer the FDA’s concerns over  Avastin’s efficacy and safety in breast cancer, which importantly will include a biomarker component – plasma concentration of VEGF-A – which many have been calling for. So far the FDA’s response appears to be that talk is cheap, stating: “a plan to conduct a study is simply an expression of a future intention that may or may not be fulfilled.”

One of the biggest rows so far has been Roche’s attempt to remove ODAC from the appeal process completely, or at least seek new committee members, given what Roche claims is inevitable bias – the same committee members that rejected the drug last July will also be asked to make recommendations at the end of the appeal hearing and the chances of them changing their minds appear to be slim.

The current ODAC roster has six voting members, five of which voted against Avastin last time around. The only vote in favour of  Avastin was from a patient representative but that person cannot attend the hearing and has been replaced by a temporary patient representative.

Dr Karen Midthun, Director of the FDA’s Center for Biologics Evaluation and Research (CBER), will preside over the proceedings but the ultimate decision rests with the FDA’s Commissioner, Dr Margaret Hamburg. A final ruling is expected by September.

Reduced expectations

Despite a number of clinical and regulatory setbacks in the last 18 months, Avastin remains a hugely important revenue driver for  Roche and its second most valuable product worth $30.2bn, according to EvaluatePharma’s NPV Analyzer.

Use of the drug in breast cancer was once predicted to reach $2bn by 2016, but the FDA’s decision and heavy restrictions in Europe have significantly dented these expectations – latest data from EvaluatePharma put sales in breast cancer at around $500m by 2016, or just 6% of Avastin’s total sales of $7.96bn.

This currently values Avastin’s potential use in breast cancer at just 1% of Roche’s market capitalisation, so in theory the damage has been done and the company has little to lose from chancing its arm. 

The danger here of course is that another negative recommendation from the appeal hearing could lead to more damaging headlines about Avastin, which continues the wider erosion of confidence and sentiment towards such a key drug.

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