AVEO Pharmaceuticals, Inc. (AVEO): Drug Rejected! Let’s Rejoice?

Confounding choices
There’s an investment lesson here: Make sure your company is running the correct clinical trial.

AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)’s mistake seems to have been going head to head against the second-best drug for kidney cancer, Nexavar sold by Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) and Bayer, rather than top-selling Sutent sold by Pfizer Inc. (NYSE:PFE). While progression-free survival was longer for the group taking tivozanib, once patients progressed, they wanted another drug. Lots of patients taking Nexavar crossed over to take tivozanib. Essentially some patients got two drugs while other only got one, confounding the overall survival data.

The most obvious solution would have been for AVEO to have gone after second-line patients that have already failed Sutent, like Pfizer Inc. (NYSE:PFE) did with its second-line drug Inlyta. In that scenario, comparison to placebo probably would have been sufficient, although the choice would have shrunk the potential market.

AVEO looks like it made better choices with its colon and breast cancer trials, but investors have awhile to wait to see if the better design results in better data.

The article Drug Rejected! Let’s Rejoice? originally appeared on Fool.com and is written by Brian Orelli.

Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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