Aveo On Target

Strong Bio profile picture
Strong Bio


  • Lead candidate FOTIVDA (tivozanib) receives CHMP EMA recommendation for approval for the treatment of renal cell carcinoma in Europe.
  • FOTIVDA is in phase 3 clinical trials in the U.S. for renal cell carcinoma.
  • The company's pipeline of unique HER3, GDF15, and Notch 3 targeting mechanisms and solid corporate partners have immense potential.

Aveo Pharmaceuticals (NASDAQ:AVEO) is a $575 million market cap company focused on advancing a broad portfolio of unmet need addressing therapeutics including candidates targeting oncology, cachexia, and pulmonary arterial hypertension. Lead candidate FOTIVDA (tivozanib) is in phase 3 clinical development in the U.S. for treatment of renal cell carcinoma (RCC), with key readout expected 1Q 2018. FOTIVDA was recommended for approval for patients with RCC by CHMP at EMA, and AVEO just recently won approval in Europe. Ficlatuzumab is in clinical trials for the treatment of squamous cell carcinoma of the head and neck (HNSCC) and acute myeloid leukemia (AML). High-promise oncology candidates in the pipeline include HER3 and GDF15-targeting antibodies as well. A Notch 3 candidate for the treatment of pulmonary arterial hypertension (PAH) is also in early stages of development. The company has a proprietary Human Response Platform that has been used to elucidate mechanisms of cancer, and is gaining the interest of some impressive collaborative partners, including Novartis (NVS).

FOTIVDA (tivozanib) is an orally administered, once-daily, vascular endothelial growth factor (VEGF) tyrosine kinase inhibitor. It is a potent, selective and long half-life inhibitor of all three VEGF receptors and is designed to optimize VEGF blockade while minimizing off-target toxicities, potentially resulting in improved efficacy and minimal dose modifications. 517 patients treated with tivozanib in a phase 3 clinical trial experienced superior PFS versus sorafenib for renal cell carcinoma. Tivozanib has been investigated in several tumors types, including renal cell, colorectal and breast cancers. The market for the treatment of renal cell carcinoma is set for change as PD-1 immune checkpoint inhibitors enter the indication and begin to displace tyrosine kinase inhibitors by 2023, according to GlobalData. But as targeted tyrosine kinase inhibitors co-evolve their own novel targets, it remains to be seen how the market space might develop for these and other related cancer indications. Overall the research bodes well for patients as combination therapies may achieve better results as physicians have more options for patients. The company advanced studies to phase 2 for tivozanib in combination with Opdivo in June 2017. Renal cell carcinoma is a competitive market space that is expected to reach up to $4 billion by 2020 according to research by RNCOS. The company's European partner is EUSA Pharma.

Ficlatuzumab (formerly known as AV-299) is a potent hepatocyte growth factor (HGF) inhibitory antibody that binds to the HGF ligand with high affinity and specificity to inhibit HGF/c-Met biological activities. Isoforms of HGF, also called scatter factor or SF, are being characterized and profiled in the scientific literature for roles in development, cancer, and tissue remodeling. AVEO is developing ficlatzumab in a partnership with Biodesix. It is being evaluated for treatment of HNSCC and AML. Phase 1 study data, though limited, were reported at ASCO in 2017, with encouraging results that suggest a clinically meaningful activity. The market for SCCHN is expected to quadruple to $1.5 billion by 2024, with a CAGR of nearly 15%. The market for AML is expected to reach $1.5 billion by 2026.

AV-203 is a clinical-stage ErbB3 (HER3) inhibitory antibody that showed no dose limiting toxicity in a phase 1 safety study. It is being developed for a biomarker-specific subset of patients via partnership with CANbrindge Life Sciences (worldwide markets excluding U.S., Canada, and Mexico). ErbB3 activation has been shown to lead to a variety of cancer treatment escape or resistance mechanisms in preclinical and clinical models. HER3 positive cancers are estimated to be present in about 30-50% of solid tumors, which equates to approximately 326,000 patients in the U.S. AV-203 has shown anti-tumor action in preclinical tumor models including breast, head and neck, lung, ovarian, and pancreatic cancer. AVEO's Human Response Platform has exemplified the importance of ErbB3 in promoting tumor growth. The market for solid tumors is expected to grow at a CAGR of 8.6% to up to 12.3% in Asia Pacific, which alone will account for up to $2.3 billion by 2019. Solid tumor markets in the U.S. are estimated in the $27 billion range by Luzitin. So clearly ErbB3 therapies are regarded by Strong Bio as a potential market-rocking impact candidates.

AV-380 targets growth differentiation factor 15 (GDF15). AVEO signed an impressive agreement with NVS for the development and commercialization of this first-in-class fully human antibody (and related/modified antibodies). Cachexia is a syndrome characterized by severe malnutrition, weight loss, and muscle wasting. Cachexia cannot be reversed by nutritional support. It is often associated with anemia, inflammation, and immune system suppression. GDF15 is a pro-inflammatory cytokine that shows elevated levels in cachectic cancer patient circulation (as well as animal models). AV-380 is being developed for investigating the role of a pro-inflammatory state that might play a major role in cachexia pathology. It is estimated that cachexia develops in approximately 40-50% of all cancer patients (and accounts for >20% of cancer deaths), with up to 80% incidence for pancreatic cancer. Preclinical data show that inhibition of GDF15 results in a switch from catabolism to anabolism, suggesting that GDF15 inhibition with AV-380 may reverse the effects of cachexia. It affects some five million individuals in the U.S. This mechanism is regarded by Strong Bio as a very hot prospect. The market for cancer drugs is expected to reach over $160 billion by 2021. With such a large incidence of cachexia, GDF15 targets should be considered for high reward speculative investments. The veterinary market would also be expected kick in an additional market for this class of treatment in coming years.

Candidate AV-353 is a potent, selective, high affinity inhibitory antibody specific to Notch 3 being evaluated in PAH. The company recently beefed up its patents for this candidate. The Notch 3 signaling pathway is important in cell-to-cell communication involving gene regulation mechanisms that regulate differentiation and cell migration. Scientific literature has implicated the Notch 3 receptor pathway in cancer and lung diseases. PAH is a rare and life-threatening disorder that is caused by enlargement of the arterial walls in small arteries between the heart and the lungs, resulting in restricted blood flow. Most treatments in PAH focus on symptoms of vascular constriction. In contrast, AVEO targets the underlying cause and AV-353 has demonstrated preclinical data which supports investigation of disease pathology reversal. It is estimated that nearly a quarter million people suffer from PAH, with a burgeoning market expected by 2024 of $4.75 billion. It is getting to be a more competitive indication as small biotech and big pharma eyes the COPD implications of these potentially related mechanisms of pathology.

AVEO net loss for Q2 2017 was $33.3 million, or a loss of $0.30 per basic and diluted share, compared with a net loss of $8.6 million, or a loss of $0.13 per basic and diluted share for Q2 2016. The company reported having $40.1 million in cash as of end 2Q 2017. AVEO raised about 15 million in capital in 2Q 2017, including a credit facility from Hercules Capital ($5 million) and sale of common stock ($9 million). It raised money in March of 2017 as well, in a $15 million offering. AVEO expects to have a cash runway into late 2018. This runway could be extended by additional potential payments of up to $16 million by EUSA Pharma related to milestones and double-digit royalty payments on net sales for tivozanib.

This is a definite watchlist and maybe even a flat out BUY for a speculative biotechnology investor at this time. There is risk, but the reward to risk ratio is about as good as one is going to find, in the opinion of Strong Bio. The market cap is above the Feuerstein Ratain threshold and with strong potential in the pipeline in some novel and demographically rich markets, the sky is the limit for AVEO.

Risks for the company include potential dilution if its tivozanib launch would be slow or delayed. Potential delays due to noncompliance with large scale manufacturing regulations are a common pitfall for some startup biotechnology companies. FDA approval for the U.S. market for tivozanib (and future candidates) is/are also a risk, but given success with EMA is somewhat lower than it could be at this stage for tivozanib. Long-term, the company has good partners that should help it shoulder the development cost load for its candidates, but as these candidates enter phase 3, the cost can be very high, which could limit profits generated by future product sales.

This article was written by

Strong Bio profile picture
Strong Bio is a growth-focused analyst seeking identification of unique investment opportunities in biotechnology that arise as high probability market niche innovation or expansion based on scientific peer-reviewed evidence supportive of novel mechanism(s) of action.  By diligently screening investment candidates in multiple biotechnology sectors, initial position recommendations and reinforcing position pricing profiles can be systematically evaluated citing fundamental trends for investors to exploit.  If you would like to request that Strong Bio publish an article on a company of interest, please request by private message.  Strong Bio reminds the reader that investment in biotechnology can be considered high risk, and diversification of assets is a necessity.  Strong Bio is a personal branding of F. Thomas Crump, Ph.D., in an attempt to communicate with a biotechnology stock club that got too large to communicate with by text.  Strong Bio mobile app under construction.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (19)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.