AVEO Pharmaceuticals, Inc. (NASDAQ: AVEO) is headed up in the premarket hours, setting the stage for significant gains for the second trading session in a row. The gains started when the company announced the approval of a new drug for the treatment of cancer by the FDA. Here’s what’s going on:
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FOTIVDA Has Been Approved
In a press release issued yesterday, AVEO Oncology said that the United States Food and Drug Administration has approved FOTIVDA, also known as tivozanib. The approval surrounds the use of the treatment as a potential option for adults with relapsed or refractory renal cell carcinoma, also known as RCC.
To qualify for the treatment, patients must have received two or more prior systemic therapies.
Nonetheless, FOTIVDA is an oral, next-generation vascular endothelial growth factor tyrosine kinase inhibitor.
In the release, AVEO said that it plans on making the treatment available to patients by March 31, 2021.
This is massive news. After all, the RCC market is expected to grow to be worth more than $6 billion annually by the year 2022. Moreover, AVEO doesn’t have to take a lion’s share of this market for significant revenues to be achieved. With a market cap of just $440 million, tapping into even a small percentage of this market will prove to be substantial for the company.
In a statement, Brian Rini, MD, Chief of Clinical Trials at Vanderbilt Ingram Cancer Center and principal investigator of the TIVO-3 clinical trial, had the following to offer:
Today’s approval of FOTIVDA provides a new tool for treating patients with kidney cancer who have relapsed or become refractory to two or more prior systemic therapies.
With advances in RCC treatment, patients are living longer, increasing the need for proven, well tolerated treatment options in the relapsed or refractory setting. The TIVO-3 study is the first positive Phase 3 study in RCC patients who received two or more prior systemic therapies, and also the first Phase 3 RCC study to include a predefined population of patients who have received prior immunotherapy, the current standard of care in earlier-line treatment. With this approval, I believe FOTIVDA represents an attractive intervention, and expect it to play a meaningful role in the evolving RCC treatment landscape.
The above statement was followed up by Michael Bailey, President and CEO at AVEO. Here’s what he had to say:
We believe in FOTIVDA’s potential to provide a differentiated treatment option for the growing number of individuals in the U.S. with relapsed or refractory RCC, and today marks the culmination of many years of hard work and determination of many individuals to bring this therapy to patients.
With today’s approval, AVEO begins its journey as a commercial-stage company, a noteworthy accomplishment in our industry. On behalf of the entire AVEO team, I would like to thank all the patients, their families, and caregivers whose tireless efforts made this day possible.
Finally, Dena Battle, President of KCCure, had the following to offer:
Relapsed or refractory RCC is a devastating disease for which patient outcomes can be limited due to the tradeoff between tolerability and efficacy. The FDA approval of FOTIVDA represents an exciting, meaningful advancement by providing a new treatment option for this patient population.
What Analysts Think About AVEO Stock
Analysts seem to love AVEO Pharmaceuticals. In fact, according to TipRanks, there are three analysts currently covering the stock, all of whom rate it a Buy.
Price targets on the stock range from $18 to $27, with the median price target being $23. That price target represents the potential for more than 50% gains when compared to yesterday’s close.
Moreover, these price targets were offered prior to the approval of FOTIVDA. As a result, I’m expecting that these analysts will lift their price targets further ahead.
The approval of FOTIVDA is a huge accomplishment for AVEO. As a result of the approval, the company will go from being a clinical-stage biotechnology company to a commercial-stage company.
Moreover, with the approval, the company will be tapping into a massive market that has the potential to result in significant revenues ahead. All told, this is a stock that should be on your radar.