AVEO Pharmaceuticals, Inc. (NASDAQ: AVEO)
AVEO Pharmaceuticals stock has had an interesting week in the market thus far. After presenting positive data on Monday, the stock soared; followed by more gains yesterday morning. However, as the trading day moved on, the stock gave up a good percentage of its gains; and, it’s down today. Nonetheless, I’m not concerned about the declines. Today, we’ll talk about why we saw the gains earlier in the week, why we’re seeing declines today, and what we can expect to see moving forward.
What Caused AVEO To Climb Earlier This Week?
On Monday, AVEO Pharmaceutical offered a presentation at the ASCO 2015 conference. The data provided was from the company’s recent Phase 3 study of their prime candidate, tivozanib, in patients with metastatic renal cell carcinoma. The study data showed that when compared to a treatment provided by Bayer and a treatment provided by Amgen, tivozanib proved to be relatively effective. As a result, the AVEO stock price soared.
Why We’re Seeing Declines Today
If you’re looking for something that is fundamentally negative about AVEO that recently came out, give up your search, it’s a waste of time. The declines we’re seeing have nothing to do with the company doing something wrong. Instead, this is simply natural movement in the market. As I’ve said in the past, when trading, it’s important to remember that movements in the market are a series of overreactions; pushing the stock higher or lower than it should have been. With that said, Monday and Tuesday’s activity pushed the stock higher than it should have been. So, the declines are simply a correction bringing it back down. Nothing more, nothing less.
What We Can Expect To See From AVEO Moving Forward
When it comes to AVEO, I have a relatively bullish opinion on the stock in both the short and long term outlooks. In the short term, it looks like AVEO has hit a new level of support in the market and isn’t likely to foll much further. Given the fact that movements in the market area series of overreactions, I think the price of the stock is likely lower than it should be; which will most likely lead to another breakout sometime in the near future.
In the long run, I also think that we’re going to see great things out of AVEO. The company is working to extend its already impressive pipeline. Also, tivozanib looks pretty promising. With strong management and a clear plan with regard to current candidates and expansion of their pipeline, I think AVEO stock has plenty of room to run in the long term.
What Do You Think?
Where do you think AVEO is headed and why? Let us know in the comments below!