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Aveo Pharma shares continue modest recovery

NEW YORK (AP) -- Shares of Aveo Pharmaceuticals edged higher Wednesday and Jefferies & Co. noted that the company is providing more details about the survival of patients taking its kidney cancer drug.

THE SPARK: The company is telling investors it has identified a flaw in the design of a clinical trial of its cancer drug, tivozanib, said analyst Thomas Wei. Earlier this month, the company said data indicated that patients treated with tivozanib were less likely to live one year after treatment than patients who took Nexavar, another cancer drug. Wei said Aveo is contending that when patients received similar treatments after taking tivozanib or Nexavar, tivozanib patients did better.

Wei said it's not clear if the Food and Drug Administration will accept Aveo's analysis. He kept a "Hold" rating on the stock with a price target of $10 per share.

THE BIG PICTURE: Tivozanib is being studied as a treatment for advanced renal cell carcinoma. The company has reported positive data from two late-stage trials this year, saying patients who were treated with tivozanib lived longer before death or the resumption disease progression than patients treated with Nexavar, a drug marketed by Onyx Pharmaceuticals Inc. and Bayer HealthCare.

On Aug. 2, Aveo reported additional data that worried investors. The company said that in one study, 77 percent of tivozanib patients were still alive a year after the start of treatment. It said 81 percent of Nexavar patients were alive at the same point. Aveo said the FDA is concerned about that data and will review it. The company said it is conducting further analysis of results from its clinical trials.

Aveo and its partner Astellas had planned to file for marketing approval of tivozanib in the third quarter, but the company said the filing may be delayed into the fourth quarter.

SHARE ACTION: Shares of Aveo Pharmaceuticals Inc. picked up 26 cents, or 3 percent, to $8.99 in midday trading. The stock has closed higher for four consecutive trading days, but the shares are still down 34.3 percent from their closing price on Aug. 1.