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AVEO Oncology Reports First Quarter 2014 Financial Results

AVEO Oncology (NASDAQ:AVEO) today reported its first quarter 2014 financial results and provided an update on its progress toward achieving its strategic plan.

“We made solid progress executing on a key component of our recently announced corporate strategy, which is to advance our clinical-stage assets through collaborations while retaining substantial value,” said Tuan Ha-Ngoc, president and chief executive officer of AVEO. “In March we re-acquired worldwide commercial rights to AV-203, our ErbB3 inhibitor, from Biogen Idec, which will allow us to find a partner to support further clinical development of AV-203. In addition, in April we announced an innovative partnership with Biodesix, a private diagnostic company, to advance the clinical development of ficlatuzumab, our HGF inhibitory antibody. We expect to initiate a proof-of-concept clinical trial of ficlatuzumab in non-small cell lung cancer by the end of the year, subject to discussions with the Food and Drug Administration.”

Recent Operational Highlights

  • Re-acquired rights to AV-203, AVEO’s ErbB3 inhibitor, from Biogen Idec in March 2014. By re-acquiring these rights, AVEO will be able to seek a partner with established oncology capabilities to accelerate and financially support the clinical development of this asset.
  • Executed an agreement with Biodesix in April 2014 under which AVEO plans to conduct a proof of concept study of ficlatuzumab in combination with erlotinib in advanced non-small cell lung cancer using Biodesix’s VeriStrat® test to select for a patient population which did not respond well to epidermal growth factor receptor (EGFR) tyrosine kinase inhibitor (TKI) therapy, but responded to the combination therapy in an exploratory analysis of AVEO’s Phase 2 trial data. Biodesix will fund up to $15 million of the cost of the study. Any additional development, regulatory and commercial costs for ficlatuzumab beyond the proof of concept study will be shared equally between AVEO and Biodesix, as will any potential profits.
  • AVEO and Astellas announced the termination of their tivozanib collaboration pursuant to which Astellas will return all rights for tivozanib to AVEO in August 2014. At that time AVEO plans to explore potential partnership opportunities to support the further clinical development of tivozanib.

Q1 2014 Financial Highlights

“We remain on target to end 2014 with a cash balance of between $50 and $55 million,” said Tuan Ha-Ngoc. “In the first quarter AVEO reported cash expenditures of $30 million, approximately half of which are related to facilities and site costs. The majority of these site costs are reimbursable through our lease arrangement and were incurred as construction nears completion on our 650 Kendall offices and labs where our operations will be consolidated.”

  • Ended Q1 2014 with $88.3 million in cash, cash equivalents and marketable securities.
  • Total collaboration revenue was approximately $15.3 million compared with $0.3 million for Q1 2013. The increase was primarily due to an additional one-time recognition of $14.1 million of previously deferred revenue as a result of the modification of the company’s arrangement with Biogen Idec.
  • Research and development (R&D) expense was $11.8 million compared with $21.0 million for Q1 2013. The decrease in R&D expense was primarily due to a reduction in personnel-related expenses following AVEO’s June 2013 strategic restructuring as well as a decrease in external clinical trial, consulting, and manufacturing costs associated with development and pre-commercialization activities for tivozanib.
  • General and administrative (G&A) expense was $5.6 million compared with $12.4 million for Q1 2013. The decrease in G&A expense was primarily due to a reduction in personnel-related expenses following the company’s June 2013 strategic restructuring and a decrease in marketing and consulting costs for tivozanib related to pre-commercialization activities.
  • Net loss for Q1 2014 was $6.5 million or a loss of $0.12 per basic and diluted net loss per share compared with net loss of $34.1 million or a loss of $0.69 per basic and diluted net loss per share for Q1 2013.

2014 Financial Guidance

Based on current operating plans, AVEO continues to expect to end 2014 with approximately $50-$55 million in cash, cash equivalents and marketable securities.

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