Repeat Performance In Aveo Pharmaceuticals After Spike In Price
Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.
Aveo Pharmaceuticals, Inc. (NASDAQ: AVEO) shares were trading higher by $0.61 (49 percent) at $1.78 in Monday's session. The issue has retreated over $1.20 from its pre-market high ($2.97) and $0.80 from its intra-day high ($2.55).
What sparked the rally was the announcement of a licensing deal with Novartis, in which the company will receive an upfront $15 million payment as well as up to $311 million in milestone payments.
Today's trading action certainly resembles the price action in the issue on May 21. On that day, the issue spiked to $3.50 following the results of TIVO-1 study for renal cell carcinoma. However, it turned out to be a "sell the news" scenario as the issue retreated from the highs to close at $2.23.
Over the next three months, it drifted lower and made a new low for the recent slide at $1.14 and ended the day at $1.17. After flirting with the $3 level in the pre-market trading, the issue managed a higher open at $2.47, but the rally lasted only another $0.08 to $2.55. From that level, it has continued to make new lows for the session and may not even end the session over $2.
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