The American Society of Clinical Oncology held its annual meeting over the past weekend (it actually ends tomorrow), and there was news about Genentech’s blockbuster cancer drug Avastin. According to a CNNMoney.com report,

Adding Genentech Inc.’s (DNA) Avastin cancer drug to a certain chemotherapy regimen produced a modest improvement in a measure of survival of people with an advanced form of lung cancer, a new study [reported at the ASCO conference] found. But the study could have negative financial implications for Genentech and its majority owner, Roche Holding AG (RHHBY), because it showed a lower dose of Avastin was just as good as a higher dose. If doctors begin to prescribe lower amounts of the drug, it could slow the blockbuster drug’s sales growth. * * * Genentech recorded $1.7 billion in U.S. Avastin sales in 2006, up 54% from the year before. The drug, which works by starving tumors of needed blood supply, is also approved to treat colorectal cancer. Data from a separate study showing Avastin was effective in kidney cancer patients also was released Saturday, and is among dozens of Avastin studies being presented here.

The Genentech stock analysts weighed in with their medical opinions:

Lazard Capital analyst Joel Sendek said in a note to clients that discussions with doctors have led him to conclude that they will prescribe the lower dosage, even though it uses a non-standard chemotherapy regimen. But he also forecast that the overall dosage decline “will be largely offset by increased duration in use as this dose is better tolerated.” Analyst Douglas Chow of Caris & Co., meanwhile, noted that since the study wasn’t designed to measure a statistically significant difference between the two dosages, “…we do not believe physicians have enough information to conclude that low-dose Avastin could provide the same benefit in overall survival as high-dose Avastin.” Prudential Equity analyst Jason Zhang agreed. He also called the progression- free survival differential between the two doses “relatively unimpressive,” triggering concern that neither of the patients groups taking Avastin in the study will experience a significant survival benefit over chemotherapy alone. ” If this is the case, Avastin expansion to treat non-small cell lung cancer in Europe could turn out to be a difficult process,” he said in a research note.

AP reports that “Genentech shares fell $1.55, or 2 percent [today], to close at $77.95.”