AVEO’s (AVEO) controversial drug, tivozanib, will face an FDA’s advisory committee (Oncologic Drugs Advisory Committee or ODAC) on May 2nd. Despite the negative sentiment around AVEO, I still view tivozanib as an approvable drug with a compelling risk/benefit profile and expect an overwhelmingly positive ODAC recommendation. The FDA does not always follow the ODAC’s recommendations, but in tivozanib’s case it should be regarded as an important risk mitigation event.
The controversy around Tivozanib stems from a negative survival signal in the drug’s phase III trial in renal cancer (RCC). The trial, which compared tivozanib to Nexavar, demonstrated tivozanib’s superiority in terms of PFS (progression free survival) and side effects but median survival was slightly lower in the tivozanib arm (28.8 vs. 29.3 months). Albeit not statistically significant, this trend raised some questions about tivozanib’s chances of approval.
The negative sentiment increased in August 2012, after AVEO announced the FDA expressed concerns about the survival trend and would like to see additional analyses of the data. The market reacted accordingly: AVEO is down 45% since the announcement.
AVEO claims the negative survival trend is a result of the trial design, which allowed patients who progress on Nexavar to receive tivozanib. A retrospective analysis indeed showed that 72% of patients who failed Nexavar went on to receive effective 2nd line treatments (vast majority got tivozanib). In contrast, only 18% of patients who failed tivozanib received effective 2nd line treatments. Therefore, instead of comparing tivozanib to Nexavar, the trial compared (i) tivozanib to (ii) Nexavar followed by tivozanib.
Although this explanation makes sense, it cannot be proven and there is always the theoretical possibility tivozanib is inferior to Nexavar in terms of OS. This led some to argue that the FDA will require AVEO to conduct a new phase III trial, pushing approval by 3-4 years.
Paradoxically, the negative OS trend can serve as an indication for tivozanib’s activity in the 2nd line setting. This was further demonstrated by the efficacy data in patients who crossed over to receive tivozanib. In this fairly large subset (141 patients), tivozanib led to a 13% response rate (19% unconfirmed) and a median PFS of 8.4 months. This compares favorably to 2nd line data with other agents such as Inlyta and Nexavar that had PFS of 4.8 and 3.4 months, respectively in 2nd line patients who had progressed on Sutent.
Source : Motzer R. ASCO GU 2013, #364
The market for 1st line RCC is highly competitive with an established leader (Sutent) and a next-generation competitor (Votrient). Since tivozanib has never been directly compared to these agents, AVEO’s main selling point will be the drug’s safety profile. If tivozanib reaches the market, investors will shift their attention to how much market share a differentiated safety profile can attain.
In oncology, drugs are judged primarily based on their efficacy but in this case Sutent’s safety profile leaves a lot of room for improvement. Sutent commonly leads to side effects such as hand-foot syndrome, neutropenia and GI toxicities that lead to dose reductions, treatment discontinuation and decreased quality of life. Tivozanib’s safety profile is dramatically better, with lower incidence of side effects across the board. This explains why there were dose reductions in 12% of patients receiving tivozanib, as opposed to 30-50% for Sutent in various trials.
Recently, a major overhang was removed following 1st line results for Votrient and Inlyta. In both cases, median PFS were numerically lower than that of tivozanib (Votrient – 8.4 months, Inlyta – 10.1 months, tivozanib – 12.7 months). This cross trial comparison does not prove AVEO has the most effective product but it can certainly make physicians more comfortable using it. As a result, physician and patient preference should enable tivozanib to get at least a third of the market (total of ~$1.2B).
PD-1/PD-L1 antibodies are a promising class of agents in renal cancer. Preliminary results with agents from BMS and Genentech already generated promising results. These drugs can be viewed as a threat to VEGFR inhibitors such as tivozanib but the 2 classes of drugs will probably be used sequentially or in combination. Thanks to its benign safety profile, tivozanib should be the most combinable agent.
Why I think tivozanib will be approved
- To date, PFS has been an approvable endpoint in RCC including 2 recent approvals (Inlyta in 2012 and Votrient in 2009).
- Tivozanib is the only drug that demonstrated a superior PFS over another VEGFR inhibitor in 1st line RCC (although Nexavar is considered the weakest of all VEGFR inhibitors).
- Tivozanib demonstrated the highest ever PFS observed in 1st line RCC.
- Tivozanib has the cleanest safety profile among VEGFR inhibitors.
- Crossover trials are notorious for confounding OS results and the FDA should acknowledge tivozanib’s OS data are inherently hard to interpret.
- All the points above should outweigh the small (but theoretically possible) chance that by some unexplained mechanism tivozanib leads to better PFS, fewer toxicities but also to inferior OS.
We are adding a second position in AVEO in anticipation for a positive ODAC and subsequent FDA approval, which should result in at least a doubling in the share price. (My guess: $10.5 after a positive ODAC, $15 after FDA approval).
It is important to note that a negative ODAC recommendation or FDA rejection will probably send the stock to ~$3.
Portfolio holdings – April 14th, 2013