Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Cancer Drug Developer Aveo Shares Sink as Study Data Falls Short of Investor Hopes


Some analysts think the shares are worth picking up as the biotech appears to have a potentially approvable drug for advanced kidney cancer. A showdown with Pfizer looms.

In the drug development business, sometimes being good isn't good enough. Aveo Pharmaceuticals (AVEO) said Tuesday that its experimental kidney cancer treatment worked better than an already approved drug. But some investors had much higher hopes for the study results.

Shares of Aveo fell more than 14% to $14.76 in midday trading Tuesday. The stock has dropped 23% in the past six months.

The company and development partner Astellas Pharma said their drug tivozanib helped patients with advanced kidney cancer in a late-stage study survive almost 12 months on average without the disease progressing. That was better than the 9-month average for patients on Nexavar, an approved drug sold by Onyx Pharmaceuticals (ONXX) and Bayer. Onyx shares fell 3% to $42.67. The stock is up 21% in the past six months.

Some investors were hoping tivozanib would beat Nexavar more handily, says RBC Capital Markets analyst Jason Kantor.

Though tivozanib "may have slightly missed the high efficacy hurdle set by the Street," Kantor says he still believes the drug has a good shot at being approved and being a commercial success. He recommends buying the stock.

Aveo plans to submit applications this year to sell the drug in the US and Europe. But Nexavar isn't the only drug tivozanib will have to go up against -- it also will compete with Pfizer's (PFE) Sutent, which is the best-selling medicine for advanced kidney cancer. (The Pfizer drug had $870 million in sales through the first nine months of last year.)

Earlier company research from Aveo suggested its drug was more effective and caused fewer side effects than Sutent, but Pfizer looms large for the company in another respect. The big pharmaceutical maker recently won backing of a US Food and Drug Administration panel of experts who recommended that Pfizer's drug Inlyta, or axitinib, be approved for sale.

Pfizer's drug is being considered for approval as a secondary treatment for kidney cancer but Canaccord Genuity analyst George Farmer says he believes the drug may also be used by doctors as a first-line treatment, creating even more competition.

"We see a challenging marketing battle ahead with axitinib," Farmer says. He says he expects the Pfizer drug will be approved in the US by a late April deadline set by the FDA.

Still, he recommends buying Aveo's stock.

The release of information from Aveo Tuesday was limited. Full results will be disclosed at a major cancer conference in June.

Twitter: @brettchase

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos