In addition to a flurry of investor lawsuits spawned by the FDA's slap-down of its marketing application for the kidney cancer drug tivozanib, Aveo Pharmaceuticals ($AVEO) now has an SEC inquiry on its hands. The biotech revealed on Thursday that it had received a subpoena from the SEC 8 days ago demanding "documents and information" on the drug.
According to an 8-K filed today, the subpoena outlined a request for "related communications with the FDA, investors and others. The Company intends to fully cooperate with the SEC regarding this non-public, fact-finding inquiry. The SEC has informed the Company that this inquiry should not be construed as an indication that any violations of law have occurred or that the SEC has any negative opinion of any person, entity or security. The Company does not intend to comment further on this matter unless and until this matter is closed or further action is taken by the SEC which, in the Company's judgment, merits further comment or public disclosure."
The news dented Aveo's shares once again, taking a 14% bite out of the stock's value in after hours trading. Aveo shares are down 66% over the past few months and show no signs of making a recovery soon.
Just the fact that Aveo waited more than a week to disclose the subpoena quickly drew some sarcastic comments and laughs on Twitter. Aveo was subjected to some scornful reviews after FDA oncology chief Richard Pazdur submitted Aveo to a regulatory pounding during an expert panel review, slamming the biotech for submitting a therapy that had failed to demonstrate improved overall survival when compared to Nexavar and questioning why there wasn't more data on Americans, unhappy with the heavy bias toward patients from Eastern Europe.
After finding out that the FDA had suggested a year ago that Aveo's late-stage work should be supplemented with a new trial, surprised analysts began to demand some answers of their own. Those questions grew more pointed as class action lawsuits began to pile up after the stock had been eviscerated in the subsequent rout.
Weeks after the review process, Aveo responded by laying off 140 staffers, 62% of its staff, including the commercial team that had been brought in after CEO Tuan Ha-Ngoc began to confidently assure investors that the company could explain the OS data and win approval. Days later, the agency handed out the expected CRL notice, rejecting the bid and demanding another trial to replace data that were "uninterpretable and inconclusive when making a risk-benefit assessment necessary for drug approval."
- here's the 8-K
Special Report: Tivozanib – Top 10 Late-Stage Cancer Drugs – 2012