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By Sarah Rubenstein

That’s a question being asked as investors digest the results of a closely watched study of Avastin in colon cancer.

Roche said today that a study of the drug, which was originally developed by Genentech, failed to meet its main goal of preventing colon cancer from returning in patients in the early stages of the disease following surgical removal of the cancer.

Avastin is already approved for several late-stage cancers, including colon. A couple of years back, one investment house said the question of whether Avastin works in this early-stage context was “mother of all binary events.” Regulatory approval for an early role could mean billions more in sales.

The study’s result is a buzzkill in the wake of Roche’s success in finally winning its protracted takeover battle for Genentech. Roche at one point offered $86.50 a share, but by the end it had agreed to pay $95 a share, bringing the deal to $46.8 billion.

Roche’s shares fell some 10% in Swiss trading. Bill Burns, who heads Roche’s pharmaceutical business, said the results were disappointing, but Avastin remains a big seller and there’s still hope it could be used in early-stage colon cancer. The company said its “initial review of the data leads us to continue to believe Avastin may be active” in patients in the early stage of the disease.

The company didn’t provide data, saying it aims to do so at a conference of the American Society of Clinical Oncology that starts late next month.

“Right now, at face value, probably they could have gotten Genentech at a lower price,” Andrew Weiss, an analyst at Vontobel Group in Zurich, told the WSJ. “Five years down the line, we’ll have a far better understanding,” he added, saying Avastin may well end up working in early-stage cancer.

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