Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shareholders of Aveo Pharmaceuticals (Nasdaq: AVEO) just may want to stay in bed today as their stock is diving 16% following the release of a late-stage study on its leading experimental cancer drug, tivozanib.

So what: Just to make things confusing and ensure that you never quite understand what the market is thinking, Aveo's study actually hit many of its efficacy endpoints. Rather than testing its late-stage kidney cancer drug against a placebo, it chose instead to pit tivozanib against Nexavar from Onyx Pharmaceuticals (Nasdaq: ONXX). Tivozanib did outperform Onyx's Nexavar as the company had predicted, but the longevity benefit only amounted to roughly three months more than with Nexavar -- much less than anyone had anticipated.

Now what: Today's news isn't the end of the world for Aveo shareholders, but it definitely takes a lot of wind out of the company's sails. It's already facing the daunting task of going up against Pfizer's Sutent, which is the primary drug currently prescribed for kidney cancer, and now must own up to the fact that its drug possesses only marginal benefits over Nexavar. While there is a market still for tivozanib, expectations for its sales potential definitely took a hit today. I'm perfectly happy sitting on the sidelines and watching at the moment, until Aveo gets its drug approved and gets a few quarters of sales under its belt.

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