Step 1: Identify the drug class. Erlotinib is a small molecule inhibitor of the tyrosine kinase domain of the epidermal growth factor receptor (EGFR), so option A is a true statement.
Step 2: Evaluate the food effect. Food does NOT delay erlotinib absorption; instead food markedly INCREASES its oral bioavailability (from about 60% to nearly 100%). For this reason erlotinib is advised to be taken on an empty stomach, at least 1 hour before or 2 hours after a meal, to avoid excessive plasma levels and toxicity. Therefore the statement that food delays its absorption is FALSE.
Step 3: Evaluate the side effects. The characteristic adverse effects of EGFR inhibitors are an acneiform (papulopustular) skin rash and diarrhea, so option C is true.
Step 4: Evaluate the indication. Erlotinib is approved for non-small cell lung cancer (NSCLC), classically in patients who have failed prior chemotherapy, so option D is true.
Step 5: The question asks for the statement that is NOT true. Since food increases (not delays) absorption, option B is the exception and is the correct answer.