H.C. Wainwright downgraded AVEO Pharmaceuticals (NASDAQ:AVEO) to “neutral” from “buy” and slashed its price target to $1 from $9 after the FDA recommended against the filing of a tivozanib NDA, citing the lack of positive overall survival data in the Phase 3 TIVO-3 study.
Shares of AVEO closed at 70 cents after dropping $1.07 on Jan. 31.
“In our view, this development adds significant uncertainty to the future of tivozanib as a monotherapy in the U.S.,” writes analyst Swayampakula Ramakanth.
The company plans another survival analysis in August 2019, which is designated as an interim analysis due to longer-than-expected progression-free survival of patients in both treatment arms, to see if the hazard ratio would improve.
While the company expects to provide an update on overall survival before the end of 2019, “in our view, the results of TIVO-3 would likely end up insufficient to support the approval of tivozanib in the U.S. as a monotherapy,” Mr. Ramakanth said.
“Without a clear path to commercialization for the company’s lead product or any additional late-stage studies ongoing, we believe that the company’s shares are likely to remain range-bound in the near term,” he added.