A Glimpse Into Soaring Biotech Stocks: AVEO Pharmaceuticals, Inc. (AVEO), Idera Pharmaceuticals Inc (IDRA)

AVEO Pharmaceuticals Shares Skyrocket on Positive CHMP Opinion

It’s a very rewarding trading day for investors in AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) with shares up over 65%, making the stock Wall Street’s bull of the day. The reason? The biopharmaceutical company announced this morning that the Committee for Medicinal Products for Human Use (CHMP), the scientific committee of the European Medicines Agency (EMA), has recommended FOTIVDA™ (tivozanib) for approval as a treatment for patients with advanced renal cell carcinoma (RCC).

The CHMP’s recommendation is now referred to the European Commission (EC). The EC, which typically adheres to the recommendation of the CHMP, but is not obligated to do so, is expected to make its final decision in about 67 days. If approved by the EC, marketing authorization for tivozanib will be granted in all 28 countries of the European Union, Norway, Iceland and Liechtenstein. EUSA Pharma, a specialty pharmaceutical company with a focus on oncology and oncology supportive care, is the European licensee for tivozanib.

CEO Michael Bailey commented, “A positive opinion from the CHMP is a critical step in our goal of obtaining regulatory approval of tivozanib as a treatment for RCC […] Tivozanib’s unique tolerability profile together with the longest progression free survival reported in a Phase 3 first line RCC study, have the potential to fill an unmet patient need for better tolerated treatment in this disease. Further, we believe this tolerability profile could enable immune-oncology combinations such as those in the Phase 1/2 TiNivo study, which combines the PD-1 inhibitor Opdivo® (nivolumab) with tivozanib and recently advanced to Phase 2.”

Mr. Bailey continued: “If the European Commission grants marketing approval for tivozanib, it would trigger a $4 million research and development reimbursement payment from EUSA, and AVEO will also be eligible for up to $12 million in additional milestones from EUSA based on member state reimbursement and regulatory approvals. These payments would add significant resources to our balance sheet as we work toward the anticipated readout of our U.S. pivotal trial in third-line RCC, the TIVO-3 trial, in the first quarter of 2018.”

Under the terms of their December 2015 agreement, EUSA Pharma has agreed to pay AVEO up to $394 million in future research and development funding and milestone payments, assuming successful achievement of specified development, regulatory and commercialization objectives, as well as a tiered royalty ranging from a low double-digit up to mid-twenty percent on net sales of tivozanib in the agreement’s territories. Thirty percent of milestone and royalty payments received by AVEO, excluding research and development funding, are due to Kyowa Hakko Kirin (KHK) as a sublicensing fee in Europe. In the United States, the royalty obligation to KHK ranges from the low- to mid-teens on net sales.

RCC is the most common form of kidney cancer, which accounts for an estimated 49,000 deaths in Europe each year.ii It is expected to be one of the fastest increasing cancers over the next ten years.iii Tyrosine Kinase Inhibitor (TKI) vascular endothelial growth factor (VEGF) inhibitors are the standard of care treatment for advanced RCC in Europe, however, patients on current treatments can often experience significant side effects.iv,v If approved for use in the European Union, tivozanib would be indicated for use in adult patients with advanced RCC who are VEGFR and mTOR pathway inhibitor-naïve and are either untreated or who have failed prior therapy with interferon-alpha (IFN-α) or interleukin-2 (IL-2).

AVEO Pharmaceuticals, Inc. operates as a biopharmaceutical company, which engages in the advancement of therapeutics for oncology and other areas of unmet medical need. Its products include Tivozanib, Ficlatuzmab, AV-203, AV-380, and AV-353. It focuses on the development of its lead candidate, Tivozanib, in North America as a treatment for renal cell carcinoma and other cancers.

Idera Pharmaceuticals Shares Soar on FDA Orphan Drug Designation

Idera Pharmaceuticals Inc (NASDAQ:IDRA) shares are on track to open higher today following the news that the FDA has granted orphan drug designation for IMO-2125, an agonist of endosomal Toll-like receptor (TLR) 9 for the treatment of melanoma Stages IIb to IV.

Idera is currently conducting the Phase 2 portion of the ipilimumab combination arm of a Phase 1/2 clinical trial of intratumoral IMO-2125 in patients with anti-PD-1 refractory metastatic melanoma.  The objectives of the current trial are to evaluate IMO-2125’s safety, tolerability and clinical activity. The company expects to complete enrollment of the Phase 2 multicenter trial in the second half of 2017 with overall response rate (ORR) data available in the first quarter of 2018.  The company has submitted an abstract to provide an update of clinical data from the ongoing trial at the European Society of Medical Oncology (ESMO) Congress being held in September, in Spain.

“The Orphan Drug Designation bestowed by the FDA today, represents another important step in the development of IMO-2125,” stated Joanna Horobin, M.B. Ch.B., Idera’s Chief Medical Officer.  “A substantial proportion of patients with metastatic melanoma do not benefit from anti-PD-1 therapy.  For these patients, with PD-1 refractory melanoma, ipilimumab offers a modest benefit with an overall response rate of 10-13%1,2.  Our goal is to significantly improve on this through the combination of IMO-2125 with ipilimumab.  We are increasingly encouraged with the data seen to date and look forward to providing our next clinical data update.”

Idera is also enrolling a second arm in the Phase 1/2 clinical trial in patients with PD-1 refractory melanoma to study the combination of IMO-2125 and pembrolizumab which is currently in the dose escalation phase.

On the ratings front, JMP analyst Michael King initiated coverage with a Buy rating on IDRA and a price target of $8.00, in a report issued on March 22. The current price target represents a potential upside of 362% from where the stock is currently trading. According to TipRanks.com, King has a yearly average return of 22.2%, a 64% success rate, and is ranked #191 out of 4583 analysts.

Idera Pharmaceuticals, Inc. is a clinical stage biotechnology company, which is engaged in discovery, development and commercialization of novel oligonucleotide therapeutics for oncology and rare diseases. The company uses two distinct proprietary drug discovery technology platforms to design and develop drug candidates: Toll-like receptor targeting technology and third-generation antisense technology. 

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