Aveo Pharmaceuticals Inc. fell the most in three years after U.S. regulators said its lead product candidate, a kidney cancer drug, may need another clinical trial to assess the benefit.
Aveo fell 31 percent to $5.11 at 4 p.m. New York time, the biggest drop since March 2010 when the company began offering public shares.
While the medicine, called tivozanib, showed better results than Bayer AG and Onyx Pharmaceuticals Inc.’s Nexavar in delaying disease progression, concerns about survival trends led U.S. regulators to question whether Aveo should conduct further study. The Food and Drug Administration staff report was released today, prior to a May 2 advisory panel meeting.
“The therapeutic landscape has changed since the approval of other agents” and proving a benefit on progression-free survival may no longer be sufficient, Brian Klein, an analyst for Stifel Nicolaus & Co., wrote in a note to clients April 25.
If approved, the treatment may generate sales of $287 million in 2016 for Cambridge, Massachusetts-based Aveo, according to the average of three analyst estimates compiled by Bloomberg.
Nexavar, Pfizer Inc.’s Sutent and GlaxoSmithKline Plc’s Votrient, which are in the same class as tivozanib, were approved based on a single trial focused on improved survival time without the disease progressing rather than overall survival, William Slichenmyer, Aveo’s chief medical officer, said in an interview.
Stifel Nicolaus’s Klein predicted a negative FDA advisory panel outcome this week and recommends selling the shares. The FDA is scheduled to decide whether to clear tivozanib for sale by July 28.
Aveo sold $81 million of shares in an initial offering three years ago to help fund research on tivozanib, which is intended to treat advanced renal cell carcinoma.
Patients taking tivozanib lived a median 11.9 months without the disease worsening versus a median 9.1 months for those on Nexavar, Aveo and Astellas said in a statement last year. Patients on the pill lived a median 28.8 months compared to a median 29.3 months for patients on Nexavar.
Tivozanib didn’t have the desired outcome on overall survival because researchers let patients in the clinical trial on Nexavar whose cancer got worse switch to tivozanib, Slichenmyer said. The crossover resulted in the comparison of two sequential drugs versus only tivozanib.
Tivozanib is highly potent and selective causing fewer side effects such as diarrhea and a painful skin condition on the hands and feet caused by chemotherapy, Slichenmyer said. The most common reported side effect for patients on tivozanib was high blood pressure.
Aveo would lead marketing of tivozanib in North America and Tokyo-based partner Astellas Pharma Inc. would handle the effort in Europe.
There are about 59,000 new cases of renal cell carcinoma diagnosed in the U.S. each year and about 25 percent are advanced at the time of diagnosis, he said. About 12,000 patients with the disease die each year.