AVEO second-quarter total revenues increase to $15.6 million

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Jul 29 2010AVEO Pharmaceuticals

AVEO Pharmaceuticals, Inc. (NASDAQ: AVEO), a biopharmaceutical company focused on discovering, developing and commercializing cancer therapeutics, today provided an update on recent research and development (R&D) and business accomplishments, and announced financial results for the quarter ended June 30, 2010.

"AVEO was very productive in the second quarter," said Tuan Ha-Ngoc, president and chief executive officer of AVEO. "In particular, we received orphan drug designation for tivozanib from the European Medicines Agency, we presented promising clinical data from studies of tivozanib and AV-299, presented new insights relating to Notch, one of our discovery-stage targets, and co-authored a paper featured in Nature Reviews Cancer on our novel murine models which are a core element of our proprietary cancer biology platform. The advancement in our AV-299 monoclonal antibody program also triggered a milestone payment from Merck, which we believe further demonstrates our ability to create value from our platform."

Recent R&D and Business Accomplishments

Orphan Drug Designation for Tivozanib Received from EMA: The European Medicines Agency (EMA) has granted AVEO orphan medicinal product designation for tivozanib, its oral, triple VEGF receptor inhibitor, for the treatment of renal cell carcinoma, or RCC. According to the EMA, tivozanib was awarded the designation based on the prevalence of RCC among people in the European Union (EU); the life-threatening nature of the disease, particularly for those with advanced or metastatic RCC; and the assumption that tivozanib may provide significant benefit for patients with RCC, and may be more potent and specific than existing treatments with similar mechanism of action as supported by preliminary clinical results. Companies granted orphan medicinal product designation by the EMA receive, among several other benefits, market exclusivity in the EU for ten years following market authorization. Demonstration of quality, safety and efficacy is necessary before a designated orphan medicinal product can be granted a marketing authorization.
Additional Tivozanib PFS Data Presented at ASCO: AVEO presented data from a subgroup analysis of the Phase 2 randomized discontinuation trial with tivozanib at the 46th Annual Meeting of the American Society of Clinical Oncology (ASCO). Data presented show a favorable efficacy observed with tivozanib compared to historical data from trials evaluating currently approved VEGF receptor inhibitors in patients with RCC. In addition, tivozanib was well-tolerated with a low rate of off-target toxicities commonly associated with other targeted therapies, such as mucositis, fatigue and hand-foot syndrome. Highlights from the analyses as assessed by independent radiological review include:
- Median PFS for all patients.
- Median progression-free survival (PFS) for patients with clear cell RCC who had undergone a prior nephrectomy.
- Significantly higher PFS for patients with clear cell RCC (12.5 months) vs. non clear cell RCC (6.7 months), and for those with prior nephrectomy (14.1 months) vs. no prior nephrectomy (8.2 months); and
- Similar PFS for patients with clear cell RCC and prior nephrectomy who were "treatment naïve" (14.3 months) and those who had received prior therapy with cytokines and/or chemotherapy (15.8 months).
Phase 2 Clinical Trial of AV-299 Initiated; Milestone Payment Received from Merck: AVEO initiated a Phase 2 clinical trial evaluating AV-299 (SCH 900105), its lead investigational antibody targeting hepatocyte growth factor/scatter factor (HGF/SF), in combination with gefitinib (Iressa^®) in patients with non-small cell lung cancer. The Phase 2 trial was initiated based on preclinical studies and results from the Phase 1 trial of AV-299. The initiation of this trial triggered an $8.5 million milestone payment by Merck to AVEO. Per the terms of AVEO's collaboration with Merck relating to AV-299, AVEO has primary responsibility for clinical development of AV-299 through proof-of-concept in man, and retains the option to co-promote AV-299 in the United States for certain oncology indications.
Phase 1 Results of AV-299 Presented at ASCO: At ASCO, AVEO presented results of its dose-escalation Phase 1 clinical trial evaluating the safety and tolerability of AV-299 in 37 patients with solid tumors. The Phase 1 results showed good tolerability of AV-299 with no dose limiting toxicities up to the highest dose tested, 20mg/kg. AVEO is also conducting two separate extensions of the Phase 1 trial evaluating AV-299 in combination with erlotinib (Tarceva^®) in patients with a variety of solid tumors and AV-299 as monotherapy in patients with multiple myeloma.
Milestone Payment Received from Biogen Idec: AVEO received a $5 million milestone payment from Biogen Idec International GmbH, a subsidiary of Biogen Idec, Inc., which was recognized in the first quarter of 2010, for the selection of the first humanized antibody development candidate from its ErbB3 program, AV-203. In preclinical studies, AV-203 has demonstrated significant tumor growth inhibition in multiple tumor models, including in models of breast, prostate and pancreatic cancers.

New Data on Notch Antibody Program Presented at AACR: AVEO presented preclinical data at the American Association for Cancer Research (AACR) 101^st Annual Meeting 2010 which demonstrate that its Notch1-specific monoclonal antibody is a highly potent inhibitor of Notch1 function in both in vitro and in vivo models.
Human Response Platform™ Featured in Nature Cancer Reviews: Researchers from AVEO, Harvard Medical School, Belfer Institute for Applied Cancer Science and Dana-Farber Cancer Institute, the Broad Institute of MIT and Harvard, and the Cancer Center at Cold Spring Harbor Laboratory and Howard Hughes Medical Institute, co-authored a cover article in the July 2010 issue of Nature Reviews Cancer summarizing the recent development of improved preclinical modeling approaches to cancer drug development. Citing the accelerated discovery of new cancer genes emerging from large-scale cancer genomics, as well as the extensive number of new compounds emerging from drug discovery pipelines, the authors noted the need for improved models to provide crucial insights. The review highlights a growing collection of innovative non-germline genetically engineered mouse models, including AVEO's chimeric, human-in-mouse and population-based models that are core to AVEO's proprietary cancer biology platform. The authors believe these next-generation models will pave the way for much needed efficient and accurate preclinical therapeutic testing.

Second Quarter Financial Results and Guidance

AVEO ended the second quarter of 2010 with cash and marketable securities of $107 million. The company reaffirms its guidance that it expects to have a year-end cash balance of at least $50 million in cash and investments.
Total revenues for the second quarter of 2010 were $15.6 million compared to $5.1 million in the second quarter of 2009. Revenue in the second quarter of 2010 reflects license fees, research and development funding and milestone payments, including an $8.5 million milestone earned under the company's strategic partnership with Merck related to the initiation of the Phase 2 clinical trial evaluating AV-299 in non-small cell lung cancer.
Research and development expenses for second quarter of 2010 totaled $26.0 million compared to $12.1 million in the second quarter of 2009. The increase in spending was primarily driven by clinical costs associated with TIVO-1, AVEO's global Phase 3 clinical trial of tivozanib in patients with advanced RCC which commenced enrollment in February 2010.
General and administrative expense for the second quarter of 2010 was $3.8 million compared to $2.4 million in the second quarter of 2009. The primary driver of the increase in spending was fees and costs associated with becoming a publicly traded company.
Net loss for the quarter ended June 30, 2010 was $15.5 million, or $0.50 per common share (based on 30.8 million weighted average shares outstanding), compared to $10.2 million, or $6.41 per common share (based on 1.6 million weighted average shares outstanding), for the second quarter of 2009.
During the second quarter, AVEO restructured its debt facility with Hercules Technology Growth Capital and Comerica Bank. The revised agreement, with affiliates of Hercules, increased the principal by approximately $7.5 million and extends the maturity beyond the expected timing of the TIVO-1 trial results, providing additional cash through 2012.

Upcoming Activities

AVEO expects to present at the following investor conferences:

Canaccord Genuity 30^th Annual Growth Conference, Boston, August 10-12, 2010
Morgan Stanley Global Healthcare Conference, New York City, September 13-14, 2010
UBS Global Life Sciences Conference, New York City, September 20-22, 2010
The Fifth Annual JMP Securities Healthcare Conference, New York City, September 27-28, 2010

AVEO expects to present at the following cancer research meeting: