UPDATE 1-Glaxo cancer drug rejected for UK state funding

* NICE says Tyverb not cost-effective, has limited benefit

* Move follows earlier preliminary rebuffs for drug
* Glaxo considering appeal against decision

* Company says up to 2,000 women will be denied treatment

(Adds interview with company executive, price details)

By Ben Hirschler

LONDON, June 9 (BestGrowthStock) – GlaxoSmithKline’s (GSK.L: ) breast
cancer pill Tyverb has been rejected once again by Britain’s
cost watchdog NICE, highlighting what the company said were
fundamental problems in the evaluation system.

The National Institute for Health and Clinical Excellence
(NICE) said on Wednesday the drug’s limited benefit and high
price meant it was not suitable for reimbursement on the state
health service.

The agency’s final draft guidance follows preliminary
rebuffs for the Glaxo product, which is designed for use in
combination with Roche’s (ROG.VX: ) pill Xeloda to treat an
aggressive form of advanced breast cancer.

Despite those earlier setbacks, the British-based drugmaker
had hoped to win over sceptics at the agency and Glaxo UK
general manager Simon Jose said he was “very disappointed” by
the latest decision.

“We’ve done an awful lot on price but we still can’t get
there,” he said in an interview.

Glaxo sells Tyverb for around 1,600 pounds ($2,310) a month
in Britain — 20 percent less than the average European price —
and also offers a “patient access programme” making the drug
free to NHS patients for the first three months.

NICE Chief Executive Andrew Dillon, however, said it only
extended life by around 10 weeks and cost thousands of pounds
more than using Xeloda on its own.

Glaxo said the NICE move would result in up to 2,000 British
women a year being denied access to the drug on the National
Health Service (NHS). But it hopes some NHS Trusts will still
use Tyverb under its access scheme, despite the NICE ruling.

Jose said Glaxo was not considering any further price deals
and would now weigh an appeal against NICE’s final appraisal
decision. Parties have until June 24 to lodge an appeal.

Although Britain is only a minor market for Glaxo, the
rebuff from the cost-effectiveness agency in its home market is
a blow, since Glaxo aims to make Tyverb — also known as Tykerb
or lapatinib — a key part of its expanding business in cancer.

Decisions from NICE, which has a track record of rejecting a
number of other pricey new medicines, are closely followed by
governments and healthcare insurers worldwide.

Tyverb is the first once-daily pill for breast cancer
patients who over-express a protein called HER2. It is an
alternative to Roche’s Herceptin, which is given by injection.

Jose argued that Tyverb would actually save the NHS money,
since many patients would otherwise receive Herceptin, which
costs about the same as Tyverb but without the offer of three
months free supply.

Stock Market Money

($1=.6926 Pound)
(Editing by Kate Kelland and Simon Jessop)

UPDATE 1-Glaxo cancer drug rejected for UK state funding