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AVEO Pharmaceuticals (AVEO) Q2 Loss In Line, Revenues Miss


AVEO Pharmaceuticals, Inc. AVEO reported second-quarter 2018 adjusted loss of 6 cents per share, matching the Zacks Consensus Estimate. However, the loss was narrower than the year-ago adjusted loss of 8 cents.

AVEO’s Fotivda (tivozanib) is the first approved drug in the company’s portfolio. It was approved in EU in August 2017 for the first-line treatment of advanced renal cell carcinoma (“RCC”). However, the company is conducting clinical studies to support approval in the United States. The company is focused on launching the drug in the European countries. The drug was launched in Scotland in July. It is already available in Germany, Austria and the United Kingdom. The company is entitled to receive double-digit royalty payments from EUSA Pharma on net sales of the drug in Europe.

AVEO’s top line comprises collaboration and licensing revenues and partnership royalties. Total revenues in the second quarter were approximately $0.4 million, up 23.4% from the year-ago figure, primarily on slightly higher royalty on sales of Fotivda. However, revenues significantly missed the Zacks Consensus Estimate of $1.35 million.

AVEO’s share price movement shows that the stock has underperformed the industry so far this year. Specifically, the company’s shares have lost 22.9% compared with the industry’s decrease of 3.5%.

Operating Expenses

Research & development expenses were down 29% to about $4.9 million. However, general and administrative expenses increased 22.8% year over year to $2.8 million.

Cash Guidance

AVEO expects that its present cash resources of $18.1 million will allow the company to fund its planned operations through the first quarter of 2019.

Pipeline Updates

AVEO is evaluating Fotivda in a phase III study – TIVO-3 – for the treatment of patients with RCC in third-line setting. The data from the study along with previously completed TIVO-1 study will support the filing of a regulatory application for approval of Fotivda in the United States.

In July, the company announced a delay in the timeline for anticipated top-line data readout from the TIVO-3 study evaluating Fotivda to the fourth quarter of 2018. It was previously expected in the third quarter. The timeline was delayed for the second time. AVEO is conducting the study to address the overall survival concerns from the TIVO-1 study identified by the FDA.

Apart from Fotivda, AVEO is also developing ficlatuzumab in combination with Lilly’s LLY Erbitux in a phase II study for treating metastatic head and neck squamous cell carcinoma. Another phase Ib study is evaluating ficlatuzumab in combination with nab-paclitaxel and gemcitabine in treatment-naive pancreatic cancer. These studies were initiated in December last year.

AVEO Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

AVEO Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | AVEO Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

AVEO currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the biotech sector are Gilead Sciences, Inc. GILD and Seattle Genetics SGEN. While Gilead sports a Zacks Rank #1 (Strong Buy), Seattle Genetics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’ earnings estimates increased from $6.12 to $6.57 for 2018 and from $6.36 to $6.48 for 2019 over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 6.43%. The company’s shares have increased 9.4% so far this year.

Seattle Genetics’ 2018 loss per share estimates narrowed from $1.81 to 83 cents and from 81 cents to 39 cents in the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 12.93%. The company’s shares have rallied 36.3% year to date.

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