The flagging oncology company canned 140 middle- and lower-level employees Tuesday, totaling 62% of its workforce, in order to preserve the salaries and bonuses of the executives that drove the biotech's stock into the low single digits. Last month, an FDA advisory panel excoriated the data for its kidney cancer drug tivozanib, and told the FDA to reject the drug, sending Aveo shares plummeting by more than 60%. The FDA is expected to follow through on the negative advice of the panel and reject tivozanib next month.
"This is an incredibly sad day for Aveo," said CEO Tuan Ha-Ngoc on Wednesday's conference call.Take off, Tuan! You get to keep your $567,875 per year salary, bonus and other perks even though you were in charge when Aveo conducted its poorly designed phase III trial for tivozanib. You were also calling the shots when the FDA raised concerns about the tivozanib study and recommended the company run another one. Nevertheless, you chose to sit on this information and ignore the FDA's advice instead. "Tuan did not offer his resignation to the board. The company doesn't discuss conversations that took place in the board room, only outcomes," said Aveo spokesman Dan Budwick. That's bush-league, Budwick, and you know it. Even worse is the fact that only a single Aveo executive, Chief Operating Office Elan Ezickson, is leaving the company and, according to TheStreet's biotech ax Adam Feuerstein, he's resigning on good terms after pocketing $1 million in 2012. Last week, Adam reported that Aveo Chairman Henri Termeer confirmed that there would be "severe consequences" for the company stemming from the failure of tivozanib. So much for that. You take off, too, Termeer. We're tired of your cronyism. Congratulations to Jeremy Segal from Andover Massachusetts for winning our "Make Summer Dumber" Quiz! Thanks to all the readers who sent their entries. Here are the answers: 1.) B, 2.) D, 3.) A, 4.) D, 5.) D, 6.) C, 7.) A, 8.) A, 9.) D, 10.) B, Bonus: A. -- Written by Gregg Greenberg in New York Follow @5gsonthestreet
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts