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Prepping for Aveo, Delcath FDA Panels

BOSTON (TheStreet) -- A reminder and a semi-shameless promotional plug: On Thursday, I will be live-blogging the back-to-back FDA advisory panels scheduled to review Aveo Oncology's (AVEO) kidney cancer drug tivozanib and Delcath Systems' (DCTH) Melblez, a hybrid, surgical-chemotherapy procedure designed to eradicate tumors from the liver caused by a form of melanoma.

Before we get to the expert panel deliberations, the FDA's own review teams will weigh in on the pros and cons of both products, issuing "briefing documents" on Tuesday morning. You'll be able to find the FDA reviews of tivozanib and Melblex on the FDA's web site.

Expect volatility in Aveo and Delcath trading tomorrow, depending on the tone of the FDA reviews.

Healthcare investor and commentator Aafia Chaudhry -- she can be followed on Twitter at @aafiac -- will join the live blog as guest host. Chaudhry is predicting positive panel votes for both Aveo and Delcath, which is exactly the opposite of how I see the panels going.

You can read Chaudhry's bullish stance on Delcath's FDA panel here. Money quote:

Ultimately, we believe the data suggest a meaningful efficacy signal; the procedure is safe and well-tolerated; the sponsor has met the conditions of the SPA; and FDA appears to be working with the sponsor to map out the most efficient course to bring Melblez to market. Given that Melblez is already commercially available in 7 EU countries and that FDA has approved a US [Expanded Access Program], we feel this mitigates any residual risk associated with the [manufacturing] component of the NDA and expect a positive ODAC vote and subsequent approval.

I'm bearish on Delcath because of questions about the clinical meaningfulness of Melblez's efficacy and red flags in the safety data. My full take on the Delcath bear thesis can be read here. Money quote:

I expect FDA and the advisory panel to raise significant concerns about Melblez's safety. Three patients out of 40 died due to Melblez during the phase III trial -- two from neutropenic sepsis and one from hepatic failure. That's a 7.5% mortality rate attributed to Melblez -- not the underlying cancer. Melblez is a risky procedure.

I also question the ability of the filters used in Melblez to keep melphalan from leaking outside the liver. Sixty-one percent of patients treated with Melblez reported serious (grade 3 or 4) neutropenia, 74% reported serious thrombocytopenia and 46% reported serious anemia.

If the market is a barometer, Delcath's week ahead looks stormy. At $1.45, the stock is down 32% from its year-high reached March 11 and 5% today.. The "Bio-Run Up" into the Melblez panel predicted by some never materialized.

On the sell side, Wedbush analyst Greg Wade is predicting a positive FDA panel vote for Delcath.

On Aveo, Chaudhry recent detailed her reasons why Thursday's panel will vote to recommend tivozanib's approval. Likewise, I explained why the FDA and panel experts are more likely to vote against tivozanib.

The sell side is similarly split. RBC Capital Market analyst Adnan Butt:

The Street remains cautious given a Phase III trial design that confounded OS outcomes. However, we believe tivozanib's risk-benefit profile is favorable, clinically meaningful (better than currently marketed drugs), and unfavorable OS trends (not statistically significant) are explainable. We believe that even if the briefing documents read cautious, the actual meeting is unlikely to follow suit with ODAC understanding the negative OS trend, higher relative efficacy, and better tolerability and safety. On balance, consultants believe the trial did what it set out to do and tivozanib is unlikely to be rejected by the FDA. Given the "out of favor" sentiment, should tivozanib receive a recommendation for approval, we think there could be room for significant upside.

Stifel analyst Brian Klein:

We forecast a negative recommendation by ODAC on May 2, making the subsequent FDA decision an easy one. Rather than accepting excuses for why the PFS/OS data is inconsistent, we anticipate the the panel will refute management's argument that crossover in the TIVO-1 trial sufficiently explains why Tivozanib survival trended lower than the comparator arm. With the availability of several alternative front-line therapies with similar PFS durations, thereby negating the unmet need, we believe the panel will recommend a pre-marketing confirmatory trial, allowing the FDA to forego Tivozanib approval.

Aveo shares are down 8% year to date.

-- Reported by Adam Feuerstein in Boston.

Stock quotes in this article: AVEO, DCTH 
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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