UPDATED: Aveo shares sink on weak PhIII face-off with Nexavar

Aiming at a regulatory filing for the experimental kidney cancer drug tivozanib later this year, Aveo Pharmaceuticals ($AVEO) unveiled a slate of late-stage data this morning designed to help build its case for superiority compared to Onyx's ($ONXX) Nexavar. Investigators concluded that tivozanib held the progression of advanced kidney cancer at bay for a median of 11.9 months, compared to 9.1 months for Nexavar, in a Phase III study. But the data failed to impress analysts or investors, who forecast rough market seas ahead, triggering a stinging drop in the biotech's share price this morning. 

Aveo's decision to shoot for superior head-to-head data ahead of an FDA application was a gamble, but tivozanib--one of the most closely watched cancer drugs in late-stage development--faces some major league competition following any prospective approval by the FDA. The developer's decision to pull off a head-to-head study underscores the growing realization that an approval these days is no guarantee of success as payers apply a variety of restrictions on new and expensive cancer treatments. Aveo wants to make a clear case for the drug ahead of a launch.

Aveo--which is partnered with Astellas on the drug--noted that the data looked even better among treatment-naïve patients, with a median progression free survival of 12.7 months compared to 9.1 months for Nexavar. But the data failed to impress investors. The biotech's shares slid a stinging 13% in early trading as analysts speculated about tivozanib's ability to compete with Pfizer's Sutent, indicating that Aveo fell short of convincing investors of the drug's best-in-class market potential.

"We are very pleased by these results, especially the PFS benefit demonstrated in the treatment naive population, which represents the most significant market opportunity for tivozanib," said Tuan Ha-Ngoc, president and chief executive officer of Aveo. "In addition, we were delighted with the favorable safety profile observed in TIVO-1. We would like to acknowledge the investigators and patients who participated in TIVO-1 for their important contributions and commitment to the treatment of patients with RCC."

- here's the press release

Special Report: Tivozanib - 10 promising late-stage cancer drugs

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