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$AVEO Due Diligence: Catalyst: Adcomm May 2nd

2 days ago, I issued a bullish chart alert for $Aveo. Some basic DD on Aveo:

First off, one of the best articles covering Aveo's tivozanib, which is designed as a front line treatment for metastatic renal cell carcinoma (RCC) can be found at;

http://seekingalpha.com/article/1289691-why-aveo-pharmaceuticals-tivozanib-will-be-approved-for-the-treatment-of-advanced-renal-cell-carcinoma?source=yahoo

The key part of my fellow Seeking Alpha contributor Robert Schwartz's article concerns the belief that many bears have on Aveo, that overall survival (OS) rates missed the mark in the Phase III trial. This is the basis for the bears believing that tivo will have a negative outcome on May 2nd, when an FDA ADCOMM panel meets to vote in favor or against recommending the drug for approval.

Robert Remarks:

The OS comparison between study arms was confounded by differential use of next-line cancer therapies. This was expected based on the study's one-way crossover to the experimental therapy after disease progression in the control arm. Significant enrollment in Central and Eastern Europe may have contributed to this result, as access to subsequent effective treatment options for RCC are limited in this region. In North America/Western Europe, a trend toward longer OS was observed with tivozanib compared to sorafenib (HR=0.503; P=0.195); median OS was not reached at the time of analysis in either arm. In the context of overall survival, it must be noted that of the pivotal trials with agents approved for the treatment of RCC since 2005, six of seven failed to show a survival benefit (Table).

Yet all 7 of those drugs were approved, so unless Tivo missed by a mile on OS, and it didnt (and there remains logical explanations why it did not meet or exceed sora) so what makes Tivo "special?" So what, it gets approved, is it better than the competition?

Dose reductions were needed in 11.6% of the tivozanib group versus 42.8% of the sorafenib group (P<.001); << Tolerability

here is paramount on why I believe that not only will Tivo be approved, but will be the front line drug of choice, potentially bringing AVEO tons of cash. Most people would agreed, that in the RCC segment, there really are not any drugs out there based on new tech that are ground breaking. Tivo really is not groundbreaking in the sense that it's something new or will somehow cure RCC. The point here is the revenue to be made from the drug.

Studies show it's better than existing therapies, and for the main reason of tolerability.

I will be covering this one a lot more coming up. I think if the drug is approved like many believe, the consensus analyst mean average price target of over $11 a share is a given, and may even be a 3 bagger from its current price level. Bare in mind, that holding a biotech's stock thru FDA decisions are very risky, but carry much higher rewards if ultimately the decision is a positive one.

 

I believe it will be for tivo. Therefor I believe smarter money will bet this one up to around the 9 dollar level soon, as we approach the Adcomm on May 2nd, which is a little over a month away.

Stay tuned, a lot more to come!

 

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