Biotech Stock Mailbag: Aveo, Anthera, Amarin, MAP Pharma

This explanation of the wrong-way survival benefit makes sense but FDA will be the ultimate arbiter. The agency has "expressed concern" with the survival trend analysis and has told Aveo to expect these data to be considered during the agency's tivozanib review, according to the company's regulatory filings.

Here's the risk statement in Aveo's 10-Q that freaked out investors:

"Overall survival is a key secondary endpoint in our phase 3 clinical trial. Based on our early discussions with the FDA, we do not expect the FDA to require that we show a statistically significant improvement in overall survival in patients treated with tivozanib in order to obtain approval by the FDA... The FDA has expressed concern regarding the overall survival trend in the TIVO-1 trial and has said that it will review these findings at the time of the NDA filing as well as during the review of the NDA."

Aveo filed tivozanib with FDA on Sept. 28, which means the company should hear back from regulators about the acceptance of the application on Nov. 28. Aveo shares have been weak in front of the FDA acceptance catalyst because of investors concerns about the tivozanib survival data. Broader market selling hasn't helped.

The tivozanib survival trend controversy is going to be an interesting debate topic at an FDA advisory panel next year but it's not a problem serious enough to prevent FDA from accepting the drug's application.

FDA acceptance of the tivozanib application on or around Nov. 28 should be the dose of good news needed stop the slide in Aveo's stock price. The ultimate approval and commercial outlook for Aveo's kidney cancer drug are still hazy but the company's $100 million enterprise value bakes in much of the risks.

Michael J. asks, "Isn't it highly likely that with Amarin (AMRN) there are two prices for the buyout of the company, one with three-year exclusivity and one with five years?"

Sure, it's possible, but also equally possible is Big Pharma suitors, if they exist, aren't interested in buying Amarin if Vascepa receives three years exclusivity. At $10, Amarin is already a $1.5 billion company. We're not talking about pocket change here, particularly for a drug with significant generic risk regardless of the market exclusivity period. [The bulk of Amarin's Vascepa patent estate consists of method of use patents, harder to defend, easier to navigate around, than composition of matter patents.]

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