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Fire Aveo's CEO for Incompetence and Arrogance Rivaling ImClone's Sam Waksal

Stocks in this article: AVEO

CAMBRIDGE, Mass. ( TheStreet) -- Aveo Oncology (AVEO) CEO Tuan Ha-Ngoc hasn't been fired yet. That's disappointing. After the FDA and its advisory panel thrashed Aveo's kidney cancer drug tivozanib last Thursday -- excoriating the company for conducting a flawed and unethical clinical trial -- you'd think Aveo's directors would have convened an emergency board meeting to send Ha-Ngoc and his executive team packing.

Then again, Aveo's chairman is Henri Termeer, who wasn't exactly the sort of CEO to take personal responsibility for major screw ups under his watch while running Genzyme. Termeer also had a bad habit of ignoring FDA's recommendations, just like Ha-Ngoc.

So with these two running the show at Aveo, the question to ask might not be when will the company's directors fire Ha-Ngoc, but how big of a bonus will Ha-Ngoc get this year?

It's too bad because Aveo shareholders, not to mention kidney cancer patients, deserve far better. Aveo reminds me a lot of ImClone Systems and its colon cancer drug Erbitux. ImClone is best remembered for the insider trading scandal that engulfed CEO Sam Waksal and his pal Martha Stewart, for which both served prison time.

But many forget the roots of the ImClone saga began with the FDA refusing to accept the approval application for Erbitux in December 2001. Later we learned that as far back as 1999, ImClone knew FDA had issues and concerns with the way the company was developing Erbitux. ImClone ignored FDA's concerns and refused to follow the agency's advice. The supremely arrogant Waksal thought he could break the FDA's rules, submit shoddy clinical data and still get Erbitux approved. He was wrong. His mistakes not only cost him his reputation and prison time, but it hurt colon cancer patients. FDA didn't approve Erbitux until 2004.

Sounds a lot like Aveo, minus the crime of insider trading. Tivozanib is an active kidney cancer drug and would have likely received FDA approval this year were it not for Aveo's mishandling of the tivozanib phase III trial. I won't rehash all the ugliness that resulted from that trial because I explained it already in detail, but suffice to say, FDA wasn't fooled. In fact, Richard Pazdur, FDA's top cop in the agency's cancer drug division, was downright angry about the negative survival going against tivozanib, the dearth of U.S. patients and the stunningly stupid and unethical decision to not provide Eastern European patients randomized to tivozanib access to follow-on therapies.

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