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AVEO Pharmaceuticals Inc. (AVEO - Snapshot Report) and partner Astellas Pharma, Inc. (ALPMY) recently received disappointing news from the US Food and Drug Administration (FDA) as its Oncologic Drugs Advisory Committee (ODAC) voted against the approval of their oncology candidate, tivozanib. The news adversely impacted AVEO’s stock price.

The ODAC mentioned that tivozanib was unable to demonstrate a favorable benefit-to-risk evaluation for the treatment of patients suffering from advanced renal cell carcinoma (RCC).

We note that the ODAC gives independent expert advice and recommendations to the US regulatory body and the FDA is not bound to follow its recommendation but it generally does so.

A New Drug Application (NDA) for tivozanib seeking approval for the treatment of patients with advanced RCC was submitted in Sep 2012. The FDA accepted the application in Nov 2012 with a response expected by Jul 28, 2013.

The FDA’s advisory body reviewed findings from 17 studies (n>1,000) including the phase III TIVO-1 (TIvozanib Versus SOrafenib in 1st line Advanced RCC) study. In the TIVO-1 study, tivozanib achieved a statistically significant improvement in the primary endpoint of progression-free survival (PFS) compared to Nexavar.

We are disappointed by the news. We expect investor focus to remain on the response from the FDA for tivozanib. However, we see very low chances of the candidate getting approval at this point.

Tivozanib is being studied in other additional programs and studies as well including the BATON and TAURUS studies. The BATON (Biomarker Assessment of Tivozanib in ONcology) program includes studies assessing tivozanib biomarkers in solid tumors. TAURUS (TivozAnib Use veRsUs Sutent in advanced RCC: Patient Preference) is being conducted to demonstrate patient preference of tivozanib compared to Sutent (sunitinib) as first-line therapy in patients with advanced RCC.

Other pipeline candidates at AVEO include oncology candidates AV-203 and ficlatuzumab.

While AVEO carries a Zacks Rank #2 (Buy), Astellas carries a Zacks Rank #5 (Strong Sell). Currently, Athersys Inc. (ATHX - Snapshot Report) and Cleveland BioLabs Inc. look more attractive in the pharma space with a Zacks Rank #1 (Strong Buy).

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