Shares of OSI Pharmaceutical rose $5.25, or 15 percent, to $40.65 at 4 p.m. New York time in Nasdaq Stock Market composite trading after the SATURN study showed that Tarceva, a drug sold in partnership with Genentech Inc, extended the time patients with advanced non-small cell lung cancer lived without their cancer getting worse. The stock has traded between $32.10 and $53.71 over the last 52 weeks.

The SATURN study involved 889 patients who were given at least four cycles chemotherapy and were then treated with either once-daily Tarceva or a placebo if the disease did not progress during chemotherapy.

Tarceva, approved as a second line treatment for non-small cell lung cancer and pancreatic cancer, acts by interfering with the expansion of cancer cells and by slowing their growth and spreading in the body.

The companies hope to gain approval for the drug as part of a first line treatment. Genentech, Roche and OSI will discuss next steps in seeking U.S. approval for the potential new use for Tarceva as an early treatment.

Tarceva is one of a new generation of targeted drugs that attack only cancer cells and are tolerated better than traditional chemotherapy. Experts consider the drug a unique possible choice for lung cancer patients due to its oral administration and mild side effects.

OSI Pharmaceuticals is based in Melville, N.Y., and Genentech is based in San Francisco.

In October, the results of a late-stage clinical trial into the benefits of combining Genentech’s cancer drug Avastin (bevacizumab) to the drug Tarceva (erlotinib) did not show an improvement in overall survival with the Avastin-Tarceva combination compared with Tarceva alone. However, the combination treatment showed clear evidence of clinical activity, with improvements in progression-free survival (PFS) and response rate.

A second study (ATLAS) is evaluating the combination of Avastin and Tarceva as a potential first-line maintenance therapy for advanced non-small cell lung cancer patients whose disease has not progressed following initial treatment with Avastin in combination with chemotherapy. Results are expected in the first half of 2009.