AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) Is A Strong 2017 Runner

Any of our readers that caught this coverage early last month will already know that AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is one we are watching quite closely during the second half of 2017 and one that – as we noted previously – we think has the potential to serve up a considerable degree of reward for any trader or investor willing to pick up an exposure to the company near-term.When we first highlighted it, Aveo went for around $0.70 a share. We put forward a couple of catalysts that had the potential to add to this valuation and made the argument that markets would be looking to load up ahead of these catalysts in anticipation of positive news. Further, that this loading would likely result in a steady appreciation in share price during the then-coming months.As noted, at this time, the company was trading for around $0.70 a share. At its most recent close, AVEO went for $3.51 a piece. That's a 400% appreciation since June. The question now is, has anybody that doesn't already have a stake in this one missed the boat or is there room for further upside on current capitalization?We think the latter of these two situations is the more valid. The catalysts that we highlighted as being key to the company's future appreciation remain in place and are yet to be released. This serves up something of a twofold strategy for anybody not yet in a position and thinking about taking one.The first, pick up a blind exposure to the upcoming catalysts and benefit from the wave of speculative volume that will no doubt flow towards Aveo during the coming months. The first major catalyst is a European Medicines Agency (EMA) decision on drug called tivozanib, which the company is trying to get approved as a treatment for patients with a type of kidney cancer called advanced renal cell carcinoma (RCC).The outcome of an EMA medical panel (which serves in a similar sort of role as does the advisory committee panels in the US) was an overwhelming approval recommendation last month and the EMA normally makes a final decision on development stage drugs within three months subsequent to these sorts of panel recommendations. This means we should be looking at a decision from the European agency at some point during the end of this quarter or early next and – if the news is positive, if the agency approves the drug – Aveo is going to run towards the $10 mark very quickly.The same asset is under investigation as part of a phase 3 trial in the US and we should see data from this study early next year. The European decision is going to play into expectations surrounding said data. If the drug is approved in Europe, markets will expect topline to suggest efficacy in the upcoming US release.Looking at the impact of the release specifically, if the data shows that the trial has hit on its primary endpoint and is sufficient to underpin a registration application (NDA) in the US, $10 will be rearview mirror stuff.The second way to trade the stock is to wait for the EMA decision before taking the plunge. This is going to narrow upside somewhat but also serves to limit downside considerably, with this limitation rooted in the fact that even if the phase 3 US data disappoints, a European approval will serve to underpin a commercialization effort which, in turn, will bring in revenues that mitigate any potential for near-term dilution.Cash at June 30, 2017, came in at a little over $30 million, meaning dilution risk as things stand is minimal through early to mid-2018.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on AVEO, sign up below!Image courtesy of KV Santosh via FlickrDisclosure: We have no position in AVEO and have not been compensated for this article.