CAMBRIDGE, Mass. (

TheStreet

) --

Aveo Oncology

(AVEO) - Get Report

shares are down 23% to $5.74 in Tuesday's trading following the release of an FDA review of its kidney cancer drug tivozanib. An FDA advisory panel will be reviewing tivozanib on Thursday.

Frankly, I'm surprised at the ferocity of selling in Aveo this morning. FDA raised concerns about the negative survival data in the tivozanib phase III trial, but

investors knew this was going to be a significant issue

for the agency and a big debating point during Thursday's panel.

Here's the key voting question for Thursday's tivozanib panel, as proposed by FDA:

Given the uncertainty in overall survival, and availability of multiple therapies, is another trial needed to better characterize the risk:benefit profile of tivozanib before approval can be considered?

The suggestion that FDA may want Aveo to conduct a second clinical trial of tivozanib is probably what's freaking out investors most this morning. The scare might be justified. Here's what FDA says about a meeting with Aveo held in May 2012, right before the company submitted tivozanib for approval:

A pre-NDA meeting was held in May 2012. Here, the FDA expressed concern about the adverse trend in overall survival in the single phase 3 trial and recommended that the sponsor conduct a second adequately powered randomized trial in a population comparable to that in the U.S.

Remember, Aveo only enrolled 40 patients out of 517 in the tivozanib trial from centers in Western Europe and North America. Later in the review, FDA says it's "unclear whether the patients in this study were representative of those in the U.S."

FDA's review of tivozanib was only 13 pages long, relatively brief and straightforward. As we knew already, tivozanib demonstrated a statistically significant improvement in progression-free survival over

Onyx Pharmaceuticals'

(ONXX)

Nexavar, but overall survival in the tivozanib arm was shorter than in the Nexavar arm. This PFS-OS conundrum will be the focal point of Thursday's FDA advisory panel.

-- Reported by Adam Feuerstein in Boston.

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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;

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