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

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.

If you haven't done so already, I recommend downloading and reading this week's issue of the Cancer Letter. Editor and Publisher Paul Goldberg has a definitive account of last week's panel meeting with extensive quotes from Pazdur.

Some of my favorites:

We are all aware that people want new options for the treatment of cancer. That's not only renal cell cancer, but that enthusiasm should not be just a wild enthusiasm without looking at the data. Our biggest issue is potential 25 percent increased risk of death. It's a very significant issue that sets a precedent as far as an oncology approval as we go forward.

Obviously, overall survival is a much more important clinical endpoint than progression-free survival.

Lastly, we can't say, 'Well, there are no other drugs for this disease.' There are multiple other drugs for this disease... I am extremely disappointed in the sponsor's proposed labeling for this drug. There is no survival curve in the proposed labeling. There is no hazard ratio -- there's difference in the means and the explanation in one or two sentences confounding by crossover. But if this drug is approved, one would have to have a very careful conversation with the patient about this potential negative impact on overall survival. And how would you do this? I've been playing this in my mind in several scenarios, and any logical patient that I could think of would say, 'Doc, if you are so uncertain about this most important endpoint, don't we have any other drug to use here?' And that's what brings me back to this whole confounding of this risk-benefit issue. We really need to hear from the committee: what would be the compelling evidence, given this uncertainty in overall survival that would warrant a favorable approval action?

The committee's response was unequivocal: There is no compelling evidence, largely because Aveo conducted a flawed clinical trial.

Worse, Aveo knew it had a problem well before last Thursday's FDA panel meeting. The FDA told Aveo last May that a second clinical trial should be run. Aveo ignored that advice and didn't disclose the recommendation to anyone. There's your arrogance.

Which brings me to someone else who should be ashamed for his role in the tivozanib blow up: Dr. Robert Motzer, the so-called kidney cancer "KOL" from Memorial Sloan-Ketting Cancer Center and the principal investigator in the tivozanib clinical trial. Last Thursday, Motzer shilled for Aveo, lecturing the FDA panel experts to approve tivozanib despite all their legitimate concerns and criticisms of the data.

As the principal investigator, Motzer was in a position to tell Aveo that enrolling almost all patients from Eastern Europe and Russia, denying follow-on therapy to tivozanib patients and allowing crossover to occur for Nexavar patients was not a good idea. Instead, he chose to accept his consulting fee and say nothing. His credibility took a big hit last week. This was my favorite exchange from the panel, again courtesy of The Cancer Letter:

Pazdur: I'm ready to follow up on that issue of crossover and the reasoning behind it, because usually in a randomized study, when you have a known effective therapy such as sorafenib, at the time of disease progression, you would cross patients over from the experimental arm to receive the standard therapy. Because here you don't have proof that the experimental drug has any activity, we don't have a demonstration of the results of the trial. So, were the investigators in equipoise when they were making that decision? I just find this whole issue that you have a one-way alignment, or a one-way crossover. And here again, from an ethical point of view, if one was talking about crossover, one would want to ensure that patients that were on an experimental drug receive a standard of therapy, not the flip situation.

Dr. Michael Sekeres (FDA panel chairman): Yes, and that's exactly the direction I was going with this too. A majority of the patients deriving from Eastern and Central Europe, where the case is being made, actually some of your submission documents -- they may not have access to the standard therapies that we do in North America or Western Europe. And I wonder about the ethics of allowing the crossover only on one arm when frankly, people in other countries are desperate for subsequent therapy.

Motzer: At the time the study was designed, there was available phase-II data, and from our standpoint, the phase-II data looked very good with regard to safety profile. So there was a lot of enthusiasm around tivozanib from an investigator perspective. With regard to people going on the study, we felt that, since there were multiple treatment options available at the time -- pazopanib, sunitib, sorafenib -- that one of the reasons the patients could choose to go a trial when there are multiple other options available, would be to have access to tivozanib. So the investigators were somewhat concerned in an environment where there are multiple drugs that patients would not go on and stay on if they received sorafenib, if they were registered to sorafenib, that they might drop out and say that I don't really feel like going to this center, I'll go elsewhere. So it's the dropout to sorafenib in a setting of multiple treatment options. We all felt, and continued to feel, that this is a very promising drug. I think what we didn't anticipate was the lack of availability of other treatment options in some of the countries that accrued lots of patients. Because from the standpoint of the United States, many different treatment options were available.

Sekeres: You make good points here. You are obviously extremely well respected in this community and have helped some drugs to approval, Dr. Motzer, but I have to say, that last comment was disingenuous. You all were aware of what drugs were and weren't approved in Eastern and Central Europe and whether or not patients would have the available options they are after. So I think we are talking about two different points in terms of patients agreeing to go on in a study. Sure, it's great to be able to stay to somebody, 'Hey, eventually you'll get this drug that we think is really hot and active, even if you are randomized to the control arm of sorafenib.' But what we are asking about is the ethics, when, in the submission materials, the point is made quite clearly, first of all, that other treatments are not really available in Eastern and Central Europe, and secondly, based on retrospective studies, that subsequent therapies with TKIs appear to improve survival. So you are offering on one arm, subsequent therapies with the TKIs, and on another arm, knowingly allowing patients to get treated with just one TKI. And I guess I just don't understand what the thought was going into that.

Powerful stuff.

What's next for Aveo? Let's hope someone on the company's board steps forward to ensure that someone high up at Aveo is held accountable for last week's disastrous loss of shareholder value and the damage done to kidney cancer patients. Blaming the FDA for being too tough won't cut it. And if executives are fired, they should be replaced with people who will find a way to design a proper tivozanib clinical trial and get the drug approved as quickly as possible. Imclone's mistakes added almost three years to Erbitux's development. It may take Aveo just as long but hopefully no longer to get tivozanib approved.

At the same time, Aveo's board should have discussions about selling the company to Astellas, which is already engaged as the tivozanib marketing partner. Astellas could easily fold tivozanib into its existing oncology drug business and perhaps do a better job at getting the drug to market.

-- Reported by Adam Feuerstein in Boston.

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.

If you liked this article you might like

Biotech Names Flexing Their Muscles

Biotech Names Flexing Their Muscles

How I've Prepared for Hurricane Irma -- and a Market Pullback

How I've Prepared for Hurricane Irma -- and a Market Pullback

How I'm Prepared for Irma -- and a Pullback

How I'm Prepared for Irma -- and a Pullback

AVEO Pharmaceuticals (AVEO) Stock Pops on European Licensing Agreement

AVEO Pharmaceuticals (AVEO) Stock Pops on European Licensing Agreement

When Eyeing Small Biotechs, Partnerships Are Huge

When Eyeing Small Biotechs, Partnerships Are Huge