$AVEO,,,The following discussion piece explains why I have been able to buy on so many dips during the last week. My broker is loving the fees I have to pay (gladly). As you can read, there should be many more opportunities for some quick pops on this stock. I don't like putting in a sell stop, so I have my alert from my account set at 10%, 15% and 20% (I have this alert set as my positions' go up and down). As you can see from my posts, I do trade quite frequently so that damn alarm on my cell phone goes off about twenty-five times a day at least. When I have meetings I turn off the sound and put my cell phone on vibrate. In one meeting a few months ago, the lady next to me leaned over and whispered if I could lend her my phone as she could hear the vibrating noise coming from my jacket pocket. I looked at her and almost lost it. She and I had a very nice dinner that night.
AVEO,,What has happened:
Shares of biopharma AVEO Oncology (NASDAQ: AVEO) fell as much as 12.7% today following continued momentum trading. Things haven't quite been the same for the stock since June 23. That's when it announced data from a pivotal phase 3 trial for its lead drug candidate tivozanib, which was evaluated as a treatment for renal cell carcinoma.
The data was good enough to send the stock higher and provoke the Committee for Medicinal Products for Human Use (CHMP) in the European Union to recommend tivozanib for approval on June 27. A final decision still needs to be made by the European Medicines Agency (EMA), but it usually follows recommendations from CHMP. As of 3:12 p.m. EDT, the stock had settled at -7.1%
So what
AVEO Oncology stock was essentially left for dead prior to the whirlwind events of the last several weeks. In fact, shares were trading at just $0.75 each on June 22. They're up 292% in the three weeks since, and up 32% in the last five trading days despite the increased volatility.
Why were investors so pessimistic? Companies of AVEO Oncology's size almost never earn regulatory approval for cancer drugs. Biopharma investors may better know this as the Feuerstein-Ratain Rule, which is based on the observation that "companies with a market cap less than $300 million several months before the release of phase 3 results" never gained marketing approval --
If EMA approved tivozanib in the European Union, then AVEO Oncology will become at least the third company to go against the grain. That doesn't change the fact that the odds are still against small- and micro-cap oncology companies, but it does explain the sudden interest in the stock.
Now what
Unfortunately, investors will need to get used to volatility for the time being. Things may cool off in between regulatory decisions and future data release dates, but the momentum traders have set traps that AVEO Oncology just can't seem to avoid.
AVEO,,What has happened:
Shares of biopharma AVEO Oncology (NASDAQ: AVEO) fell as much as 12.7% today following continued momentum trading. Things haven't quite been the same for the stock since June 23. That's when it announced data from a pivotal phase 3 trial for its lead drug candidate tivozanib, which was evaluated as a treatment for renal cell carcinoma.
The data was good enough to send the stock higher and provoke the Committee for Medicinal Products for Human Use (CHMP) in the European Union to recommend tivozanib for approval on June 27. A final decision still needs to be made by the European Medicines Agency (EMA), but it usually follows recommendations from CHMP. As of 3:12 p.m. EDT, the stock had settled at -7.1%
So what
AVEO Oncology stock was essentially left for dead prior to the whirlwind events of the last several weeks. In fact, shares were trading at just $0.75 each on June 22. They're up 292% in the three weeks since, and up 32% in the last five trading days despite the increased volatility.
Why were investors so pessimistic? Companies of AVEO Oncology's size almost never earn regulatory approval for cancer drugs. Biopharma investors may better know this as the Feuerstein-Ratain Rule, which is based on the observation that "companies with a market cap less than $300 million several months before the release of phase 3 results" never gained marketing approval --
If EMA approved tivozanib in the European Union, then AVEO Oncology will become at least the third company to go against the grain. That doesn't change the fact that the odds are still against small- and micro-cap oncology companies, but it does explain the sudden interest in the stock.
Now what
Unfortunately, investors will need to get used to volatility for the time being. Things may cool off in between regulatory decisions and future data release dates, but the momentum traders have set traps that AVEO Oncology just can't seem to avoid.
1
'Everything works out in the end,,,If it hasn't worked out,,it's not the end'
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