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July 15, 2013
Aveo: The Rubble Continues to Bounce Around
Aveo Pharmaceuticals has, you'd think, enough problems already. Their failed attempt to get tivozanib through the FDA crashed their stock and led to a large number of their staff being laid off. But now they disclose that they've received a subpoena in the SEC. Given the sort of thing that went on during the run-up to the approval hearing, this shouldn't be too much of a surprise:
After finding out that the FDA had suggested a year ago that Aveo's late-stage work should be supplemented with a new trial, surprised analysts began to demand some answers of their own. Those questions grew more pointed as class action lawsuits began to pile up after the stock had been eviscerated in the subsequent rout.
Weeks after the review process, Aveo responded by laying off 140 staffers, 62% of its staff, including the commercial team that had been brought in after CEO Tuan Ha-Ngoc began to confidently assure investors that the company could explain the OS data and win approval.
And as that FierceBiotech piece notes, it took the company a week to disclose the SEC's inquiry. At this point, why anyone is holding this stock is something of a mystery - you have to be a very risk-tolerant investor with some long-shot money to spare. Or (more likely) you're stuck with a lot of sunk-cost Aveo stock, bought in a more hopeful era, and although you've probably written it off by now, you figure what the heck, you might be able to get a little of the money back if you let it ride. Good luck with that.
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