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Biotech Catalyst Play: AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)

Biotech Catalyst Play: AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)
Written by
Chris Sandburg
Published on
June 8, 2017
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Sub-$100 million biotech company AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) put out its first quarter financials back at the start of May and – alongside the release – detailed its intentions to report data from the phase I portion of a phase I/II trial investigating the safety and efficacy of one of its development assets, tivozanib, as administered in combination with Opdivo, Bristol-Myers Squibb Co (NYSE:BMY)'s anti-PD-1 therapy, in patients with renal cell cancer (RCC). The company outlined that it would report these numbers by the end of the first half of 2017.We’re now closing in on the end of the first week of June, meaning data could hit press at any point between now and the close of the month.If it comes out as positive, we expect the company to move on the news. With this in mind, and ahead of the release hitting markets, here's what's important and what we're looking for as indicative of some upside momentum.As mentioned, the drug is called tivozanib, and it's part of a family of drugs called vascular endothelial growth factor (VEGF) tyrosine kinase (TK) inhibitors. VEGF plays a key role in the growth and replication of cancer cells, as well as in the formation of the blood vessel network that surrounds tumors. TK is an enzyme that serves as a sort of off and on switch for the process that VEGF facilitates. By inhibiting TK's interaction with VEGF, the process (it's called blockading, but we don’t really need to go into that here) doesn’t function properly and the replication and cell growth don't carry through as normal (well, normal for tumor cells, which is basically unchecked replication).PD-1 inhibitors (of which Opdivo is one) are immunotherapy type oncology drugs. They inhibit the process through which cancer cells mask themselves from the human immune system, and in doing so, allow T cells to recognize them and induce apoptosis, which is a sort of programmed cell death for cells that (normally) cancer cells aren’t susceptible to.The idea of this combination therapy, then, is that the tivozanib side of the treatment can stop the cells replicating and growing as fast while cutting off the blood supply to tumors, and the Opdivo side of the therapy can get to work getting rid of the cells that already exist.It's a neat theory, and one that AVEO set out to prove with the study we're looking at as the focus of this discussion. This first part of the study is basically in place to make sure that the addition of the company's drug doesn’t bring about any major unexpected side effects on top of those associated with Opdivo treatment and – concurrently – to find an optimal dose with which to carry forward into the second stage, the phase II portion, of the trial.As far as what we're looking out for come data drop, then, primarily we want to see a clean safety profile and the subsequent advancing into phase II. As a kicker, however, we'd also love to see some indication of early clinical benefit. This latter would be nice, but it's not overly important. Chances are we won't get too much in the way of clinical benefit related detail from the company even if it's exhibited, as it's tough to ascertain any sort of control in these kinds of early stage investigations.That said, we're always hopeful.Keep in mind this isn’t the company's lead and its still early days. As such, we're not looking for anything earth shattering from the advance. With that noted, however, there's plenty of room for advance towards the company's mid-May peak in and around $0.83 and – on a break of this level – the potential for a push towards annual highs at just shy of $1.We will be updating our subscribers as soon as we know more. For the latest updates on AVEO, sign up below!Disclosure: We have no position in AVEO and have not been compensated for this article.

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