Sector Wrap: Celgene, Genentech in ASCO spotlight

PiperJaffray's Thomas Wei also is encouraged by the initial safety profile and believes risks with Avastin treatment will be considered acceptable if the trial shows the the drug works well.

PiperJaffray's Caroline Y. Stewart noted that Avastin does appear safe in lung cancer patients with brain tumors, a population for which the drug currently isn't prescribed. But Stewart still thinks that even with this data, only one-third of patients will be eligible to receive Avastin and believes Erbitux has significant opportunity to gain market share among other Avastin-ineligible patients.

Genentech shares rose $1.36, or 2 percent, to finish Friday's session at $70.19.

Separately, Eli Lilly & Co. said giving advanced lung cancer patients its Alimta drug after chemotherapy increased patients' survival without tumor recurrence or progression.

Lazard's Sendek said Alimta improves patients' ability to maintain progression-free survival, but doesn't improve survival when used as a first-line lung cancer treatment and adds toxicity. While he thinks Genentech's Tarceva could rival Alimta in this setting if year-end trial data shows equal effectiveness, Sendek does think Alimta has the opportunity to serve a substantial number of patients eligible for maintenance therapy, given that nothing is currently approved.

Lilly shares ended up 24 cents at $48.91.

Oppenheimer & Co. analyst Brian Abrahams said Genzyme's data on Clolar from its CLASSIC-II trial confirm the drug's potential use in elderly acute myeloid leukemia patients unfit for standard chemotherapy.

"While we do not expect major movement for GENZ shares on this data, we believe that clofarabine will be a meaningful revenue line in the out-years," Abrahams said in a note to clients. "With nearly 24,000 older patients worldwide with AML, we believe that sales in this setting could approach $170 million by 2011."

The company's shares fell 55 cents to close at $69.08.

Citi Investment Research analyst Yaron Werber anticipates positive data at ASCO showing that Imclone Systems Inc.'s Erbitux is highly active in tumors with the KRAS wild type gene, which could drive usage in 2nd-line colon cancer over time, a larger and more lucrative market than use as a third-line treatment.