Genentech shares drop on renewed Rituxan concerns

WASHINGTON (Reuters) - Shares of Genentech Inc DNA.N fell nearly 3 percent on Monday amid renewed concerns about the incidence of a potentially deadly brain disease in patients treated with its drug Rituxan, according to Wall Street analysts.

Last month, a rheumatoid arthritis patient being treated with Rituxan died after developing progressive multifocal leukoencephalopathy, a central nervous system disorder also known as PML, said a spokeswoman for Biogen Idec Inc (BIIB.O), which co-markets Rituxan in the United States with Genentech.

The drug's label already contains a warning about the risk of PML, but this may have been the first fatal case in an arthritis patient, according to Biogen's Naomi Aoki.

She also said the patient had a number of complicating conditions making it difficult to assess whether Rituxan played a role in the death.

Rituxan, originally developed as a treatment for non-Hodgkin's lymphoma, was also approved in 2006 for treating rheumatoid arthritis.

"There have been cases in lupus, lymphoma, and leukemia patients. It is no surprise that it happened with an RA patient," said Sanford Bernstein analyst Geoffrey Porges.

He said the risk was "well-known" and should be of little concern to investors at this stage.

Deutsche Bank analyst Mark Schoenebaum also described the market's reaction as overblown.

"PML is a KNOWN side effect of Rituxan and is already described in the FDA (Food and Drug Administration) label," he said in a research note on Monday.