Entering text into the input field will update the search result below

AVEO Pharmaceuticals Gets Sideswiped

Feb. 05, 2019 10:30 AM ETAVEO Pharmaceuticals, Inc. (AVEO)30 Comments


  • The stock of AVEO Pharmaceuticals was crushed last week due to a setback with the FDA.
  • A key marketing application will now have to wait until further study results come out late in the summer.
  • We discuss the company's situation and one possible way shareholders should trade this scenario in the paragraphs below.
  • Looking for a community to discuss ideas with? The Biotech Forum features a chat room of like-minded investors sharing investing ideas and strategies. Get started today »

The saddest life is that of a political aspirant under democracy. His failure is ignominious and his success is disgraceful." - H.L. Mencken

AVEO Pharmaceuticals (NASDAQ:AVEO) was crushed in trading late last week. This is a name I have had several profitable Buy-Write positions expire over the past 18 months and currently, have a small Buy-Write holding in as well. I know several other members of the Seeking Alpha community that follow these columns are in a similar situation. Therefore, some quick thoughts on AVEO and what to do now.

Company Overview

AVEO Pharmaceutical is a Cambridge, Massachusetts-based biopharmaceutical company that is developing treatments for oncology and other areas of unmet medical need. With last week's stock implosion of nearly 60%, the shares currently sport a market capitalization of approximately $75 million and trade right around 60 cents apiece.

The Trigger:

Image result for trigger pic

The trigger for the collapse of the shares in trading towards the end of last week was an FDA decision. The company stated Thursday that the governmental agency 'recommended not to file the NDA because preliminary OS results "did not allay its concerns" about the potential negative effect on OS that was cited in the June 2013 complete response letter'

This means the company will not file a U.S. marketing application seeking approval for FOTIVDA also known as tivozanib for the treatment of adult patients with advanced renal cell carcinoma in the first quarter of this year as planned.

Source: Company Website

Instead, the company will have to wait for more mature overall survival (OS) data from its Phase 3 study called TIVO-3 to come out. Those results should be out around August of this year. Basically, a delay in filing the NDA for tivozanib has cost over 60% of AVEO's market value in trading since this delay was announced.

The biotech sector has gotten off to a solid start in 2019 after deep losses in the fourth quarter. M&A has picked up as two major acquisitions have happened early this year. We just provided our 2019 Outlook to Biotech Forum members. It contains what we expect in this high beta sector for the rest of the year as well as a couple of possible logical takeout candidates. To get it, access to our model portfolio and our investment analysis archives, sign up for your free 14 day trial into The Biotech Forum by clicking here. Hope to see you on Live Chat soon!

This article was written by

Bret Jensen profile picture
Finding tomorrow's big winners in the lucrative biotech sector

Finding tomorrow's big winners in the lucrative biotech sector, The Biotech Forum focuses on proprietary, breaking research on promising biotech and biopharma stocks with significant potential for outsized alpha. It is the fourth most subscribed to investment service offered through the Marketplace on SeekingAlpha.com. Our service offers a model-20 stock portfolio as well as the most active Live Chat on the Marketplace. This is where scores of seasoned biotech investors trade news and investment ideas back and forth throughout the trading day.

• • •

Specializing in profiling high beta sectors, Bret Jensen founded and also manages The Biotech Forum, The Insiders Forum, and the Busted IPO Forum model portfolios. Finding “gems” in the biotech and small-cap stock sectors, these highly volatile spaces proven hugely successful have empowered Bret Jensen's own investing portfolio.

• • •

Learn more about Bret Jensen's Marketplace Offerings:

The Insiders Forum | The Biotech Forum | Busted IPO Forum

Analyst’s Disclosure: I am/we are long AVEO. 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

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.