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AVEO shares surge after drug extends kidney cancer patients' lives in study

AVEO Pharmaceuticals Inc.'s tivozanib extended the lives of patients with an aggressive type of kidney cancer in a late-stage study.

The Cambridge, Mass.-based company's stock price was up 45.79% to $1.03 as of 2:33 p.m. ET on Sept. 10 following updated results from the phase 3 study, named TIVO-3.

AVEO was evaluating the drug in a trial against Bayer AG's Nexavar, or sorafenib, in 350 subjects with renal cell carcinoma, or RCC, that had not responded to at least two previous lines of treatment and had spread to other parts of the body.

In November 2018, the company disclosed that tivozanib met the main goal of the study by helping patients live for 5.6 months without the disease worsening, compared to 3.9 months for Nexavar. The company said that 18% of patients on tivozanib saw a reduction in their cancer versus 8% on Nexavar.

Tivozanib, also known as Fotivda, was discovered by Japan's Kyowa Kirin Co. Ltd. and has been approved for treating adults with advanced kidney cancer in the EU plus Norway, New Zealand and Iceland.

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CEO Michael Bailey said on a special call held Sept. 10 that AVEO reached an agreement with the U.S. Food and Drug Administration in January to hold off on submitting a marketing application for tivozanib in the U.S. until more mature overall survival results under a prespecified analysis are available.

The data cutoff date for the analysis was Aug. 15, two years from the last patient enrolled and about 10 months from the data cut-off date for the first results. Between the two dates, 16 additional survival events were reported on the tivozanib arm of the study and 28 on the Nexavar arm, resulting in a total of 114 events on the tivozanib group and 113 for Nexavar.

Median overall survival, a point in time value separating the earlier half of events from the latter half within each arm, was 16.4 months for tivozanib and 19.7 months for Nexavar.

Results from the study include an overall survival hazard ratio — which assesses the relative risk of death — of below 1, favoring tivozanib. In addition, 20 patients on tivozanib did not see any progression in their cancer compared to two patients on Nexavar, with a median duration on the study of 32.5 months.

Robert W. Baird analyst Madhu Kumar said in a Sept. 10 research note that the market might misconstrue the negative difference in median overall survival between tivozanib and Nexavar, noting that the measure is only a point estimate of overall survival, with hazard ratio representing a broader description of a drug's overall survival profile versus a control.

CEO Bailey said RCC is one of the 10 most commonly diagnosed forms of cancer among both men and women in the U.S., with more than 73,000 new diagnoses and nearly 15,000 deaths each year. He noted that five-year survival for patients with advanced or metastatic RCC is only 12%.

The executive noted that none of the drugs approved in the U.S. have shown superiority over an active agent as a third or fourth line of treatment in phase 3 studies until the TIVO-3 trial.

"The third-line market, as it stands, is estimated to be approximately $300 million per year in the U.S. with the potential to grow substantially with more patients opting for effective third-line therapy," Bailey said.

AVEO plans to discuss the updated results with the FDA in the fourth quarter and expects to provide an update on a marketing application for tivozanib in RCC after these discussions.

Piper Jaffray's Edward Tenthoff said in a note that he has increased confidence in an FDA approval after the latest results and expects a U.S. launch of the drug in 2021. He predicts U.S. sales for tivozanib of $32 million in 2021, growing to $70 million in 2025.

Kyowa and AVEO recently amended their license agreement for the Tokyo-based company to buy back tivozanib's non-oncology rights in AVEO territories, including the U.S. and EU, for an up-front payment of $25 million. The agreement includes a waiver of AVEO's obligation to make milestone payments — $18 million upon tivozanib's U.S. approval and up to $391 million for meeting certain objectives in non-oncology indications.

The updated agreement does not cover tivozanib rights, which are sublicensed to the company's former North American partner for Fotivda, EUSA Pharma Inc. Bailey noted that EUSA retains the rights to opt in on the data for regulatory purposes in exchange for a $20 million payment.

Bailey stated that the company is testing tivozanib in combination with Bristol-Myers Squibb Co.'s Opdivo in patients with first- or second-line metastatic RCC in the phase 2 TiNivo study and expects to present updated data from the trial at the European Society of Medical Oncology meeting later this month.