Aveo Pharmaceuticals Inc said it was informed by its partner Astellas Pharma Inc that the Japanese company would not be seeking marketing approval for their experimental kidney cancer drug in Europe.
Aveo shares fell about 13 percent in extended trade, after closing at $2.70 on the Nasdaq. They have lost about 55 percent of their value since April 30, when FDA reviewers raised questions about the drug.
Astellas does not intend to fund any future studies of the drug, tivozanib, in renal cell cancer, Aveo said in a regulatory filing on Thursday. (r.reuters.com/caz38t)
Aveo is also evaluating tivozanib as a therapy for treating metastatic colorectal cancer and breast cancer.
"I expect (Aveo) shares to be down a little because if Astellas had decided to go ahead and pursue the (renal cell cancer) indication as well then obviously they would have to bear half the cost of the study," RBC Capital Markets analyst Adnan Butt said.
"It's not a total surprise that Astellas has decided not to fund it but it's a little bit disappointing."
The regulatory filing did not indicate whether Astellas had opted to discontinue support for the other two studies.
Butt said he expects, based on this filing, that Astellas would not pull out from the metastatic colorectal cancer and breast cancer trials.
Earlier this month, an advisory panel to the U.S. Food and Drug Administration decided in a 13-1 vote that an additional trial would be needed before tivozanib could be approved for renal cell cancer.
Staff reviewers for the FDA had previously noted that kidney cancer patients on tivozanib did not survive longer when compared with patients on Bayer AG and Onyx Pharmaceuticals' Nexavar.
Following the advisory panel vote, Aveo and Astellas had said they would work with the FDA to address the issues raised by the panel.
Aveo said on Thursday that it was evaluating the effect of the Astellas decision on tivozanib's clinical and regulatory path going forward.
(Reporting by Pallavi Ail in Bangalore; Editing by Anthony Kurian and Saumyadeb Chakrabarty)