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Roche (RHHBY - Analyst Report) recently announced that the US Food and Drug Administration (FDA) has approved Tarceva (erlotinib) tablets for the first line treatment of patients suffering from metastatic non-small cell lung cancer (NSCLC).

Tarceva can now be used to treat patients suffering from NSCLC with tumors that have certain epidermal growth factor receptor (EFGR) activating mutations as detected by an FDA-approved test.

The FDA approval for Tarceva was based on the phase III EURTAC study wherein the first-line use of Tarceva was evaluated vis-à-vis platinum-based chemotherapy in patients with EGFR-activating mutation-positive advanced NSCLC.

The study showed that 65% of patients treated with Tarceva experienced tumor shrinkage as compared to 16% of patients treated with chemotherapy. In addition, Roche got FDA approval for its cobas EFGR Mutation Test which was validated in the pivotal EURTAC study.

We note that Tarceva is already approved in the US for the treatment of advanced-stage NSCLC in patients whose cancer has not spread or grown after initial treatment with certain types of chemotherapy (maintenance treatment).

The drug is also approved for treating patients suffering from advanced-stage NSCLC whose cancer has spread or grown even after being treated with at least one chemotherapy regimen.

The approval for the new indication should boost the sales potential of the drug.

Tarceva was approved in Europe in 2012 for the first-line treatment of NSCLC with EGFR activating mutations where it primarily faces competition from AstraZeneca’s (AZN - Analyst Report) Iressa.

Roche has a global development and marketing alliance with Astellas Pharma Inc. (ALPMY) for Tarceva. 

Roche currently carries a Zacks Rank #3 (Hold). Right now, Salix Pharmaceuticals (SLXP - Analyst Report) looks attractive with a Zacks Rank #1 (Strong Buy).

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