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AVEO Announces Strategic Restructuring And Provides Third Quarter Financial Results

The listen-only webcast of the conference call can also be accessed by visiting the investors section of the AVEO website at investor.aveooncology.com. A replay of the webcast will be archived on the company’s website for two weeks following the call.

About AVEO

AVEO Oncology (NASDAQ: AVEO) is a cancer therapeutics company committed to discovering, developing and commercializing targeted therapies to impact patients’ lives. AVEO's proprietary Human Response Platform TM provides the company unique insights into cancer biology and is being leveraged in the discovery and clinical development of its cancer therapeutics. For more information, please visit the company’s website at www.aveooncology.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements of AVEO within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this press release are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “target,” “potential,” “could,” “should,” “seek,” or the negative of these terms or other similar expressions, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among others, statements about: the planned launch and commercialization of tivozanib; AVEO’s planned transformation into an integrated oncology company, including its ability to deliver therapies to cancer patients in the future; AVEO’s plans to develop ficlatuzumab and certain discovery assets through external collaborations; AVEO’s plans to utilize its Human Response Platform™ to support development of tivozanib, advance biomarker identification and develop selected, novel programs; the expected benefits of its strategic restructuring, including expected cost savings provided by the restructuring; anticipated near and long term drivers of value; and AVEO’s estimates for its 2012 year-end cash balance and its estimate with respect to the availability of cash through 2013 to fund its operating plans. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that AVEO makes due to a number of important factors, including risks relating to: whether the results of AVEO’s Phase 3 TIVO-1 ( TIvozanib Versus s Orafenib in 1 st line advanced RCC) trial are sufficient to obtain marketing approval for tivozanib in the U.S. and abroad, which turns on the ability of AVEO to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities the safety and efficacy of tivozanib based upon the findings of TIVO-1, including its data with respect to progression-free survival, the rate of adverse events, overall survival and other information that the FDA may determine to be relevant to approvability; AVEO’s ability to demonstrate in subsequent trials any safety and efficacy it demonstrated in earlier trials of tivozanib; ongoing regulatory requirements with respect to the approval of tivozanib, including the risk that the FDA or any comparable foreign regulatory agency could require additional positive clinical trials as the basis for product approval; AVEO’s ability to obtain and maintain adequate protection for intellectual property rights relating to AVEO’s product candidates and technologies; unplanned operating expenses; AVEO’s ability to raise substantial additional funds to achieve its goals; adverse general economic and industry conditions; competitive factors; AVEO’s ability to successfully implement its strategic plans, including the planned cost savings for its restructuring; AVEO’s ability to maintain its collaboration with Astellas; AVEO’s and Astellas’ ability to successfully launch and commercialize tivozanib if and when it may be approved for commercialization by the FDA and/or foreign regulatory authorities; and those risks discussed in the section titled “Risk Factors” and elsewhere in AVEO’s most recent Quarterly Report on Form 10-Q and in its other filings with the Securities and Exchange Commission. The forward-looking statements in this press release represent AVEO’s views as of the date of this press release. AVEO anticipates that subsequent events and developments will cause its views to change. However, while AVEO may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. You should, therefore, not rely on these forward-looking statements as representing AVEO’s views as of any date subsequent to the date of this press release.

Sutent ® and Cimzia ® are registered trademarks of Pfizer Inc. and UCB, Inc., respectively.
AVEO Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
       
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
 
2012 2011 2012 2011
Collaboration revenue $ 1,018 $ 3,585 $ 3,755 $ 163,753
 
Operating expenses:
Research and development 21,099 20,098 67,325 83,193
General and administrative   9,300     6,582     27,469     22,181  
30,399 26,680 94,794 105,374
 
Income (loss) from operations (29,381 ) (23,095 ) (91,039 ) 58,379
 
Other income and expense:
Other income, net 46 62 279 17
Interest expense (888 ) (953 ) (2,613 ) (2,911 )
Interest income   101     168     459     332  
Other expense, net (741 ) (723 ) (1,875 ) (2,562 )
 
Net income (loss)   (30,122 ) $ (23,818 )   (92,914 ) $ 55,817  
 
Basic net income (loss) per share
Net income (loss) $ (0.69 ) $ (0.55 ) $ (2.14 ) $ 1.45  
Weighted average number of common shares outstanding   43,430     43,017     43,336     38,575  
 
Diluted net income (loss) per share
Net income (loss) $ (0.69 ) $ (0.55 ) $ (2.14 ) $ 1.38  

Weighted average number of common shares and

dilutive common share equivalents outstanding
  43,430     43,017     43,336     40,377  
 
AVEO Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except par value amounts)
(unaudited)
 
September 30, December 31,
2012 2011
 
Assets
Current assets:
Cash and cash equivalents $ 114,103 $ 43,506
Marketable securities 75,589 177,622
Accounts receivable 9,298 7,210
Prepaid expenses and other current assets   7,770     6,057  
Total current assets $ 206,760 234,395
 
Marketable securities - 54,312
Property and equipment, net 7,862 5,471
Other assets 308 121
Restricted cash   3,600     751  
 
Total assets $ 218,530   $ 295,050  
 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable $ 10,259 $ 8,904
Accrued expenses 18,358 14,289
Loans payable, net of discount 4,334 8,551
Deferred revenue 1,294 1,294
Other liabilities - 1,249
Deferred rent   421     322  
Total current liabilities 34,666 34,609
 
Loans payable, net of current portion and discount 21,624 15,619
Deferred revenue, net of current portion 18,714 19,684
Deferred rent, net of current portion 4,096 359
Other liabilities 1,238 1,238
 
Stockholders’ equity:
Preferred Stock, $.001 par value: 5,000 shares authorized; no shares issued and outstanding - -

Common stock, $.001 par value: 100,000 shares authorized; 43,735 and 43,254 shares issued and

outstanding at September 30, 2012 and December 31, 2011, respectively
44 43
Additional paid-in capital 436,937 429,531
Accumulated other comprehensive loss (9 ) (167 )
Accumulated deficit   (298,780 )   (205,866 )
Total stockholders’ equity   138,192     223,541  
 
Total liabilities and stockholders’ equity $ 218,530   $ 295,050  

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