Market Overview

AVEO Reports Second Quarter 2018 Financial Results and Provides Business Update


AVEO Oncology (NASDAQ:AVEO) today reported financial results for the
second quarter ended June 30, 2018 and provided a business update.

"Our U.S. registration strategy remains a key focus for AVEO, with
topline readout of the Phase 3 TIVO-3 study expected in the fourth
quarter of this year," said Michael Bailey, president and chief
executive officer of AVEO. "TIVO-3 is the first randomized Phase 3 study
in advanced kidney cancer to stratify for prior immunotherapy and, as a
result, it has the potential to serve as a benchmark study for the
sequencing of therapies in advanced disease."

Mr. Bailey added: "The next two pillars of our tivozanib strategy also
continue to make progress. The recent launch of FOTIVDA® in
Scotland adds to ongoing commercial efforts in Germany, the U.K., and
Austria by our partner EUSA Pharma. We anticipate additional potential
reimbursement approvals for France, Germany, Italy, and Spain in the
coming months, triggering up to $8 million in milestone payments due to
AVEO in addition to double-digit royalty payments on net sales of FOTIVDA®
in Europe. EUSA has the option to access TIVO-3 data in the event of a
positive outcome in exchange for a $20 million R&D reimbursement payment
to AVEO. Finally, we look forward to presenting additional data at the
ESMO meeting in October from the Phase 2 portion of the TiNivo study of
tivozanib and nivolumab (OPDIVO®) in aRCC, a study which to
date has demonstrated promising activity and a favorable safety profile."

Tivozanib TIVO-3 Study North America Update

  • Topline Data from Phase 3 TIVO-3 Study Anticipated in the Fourth
    Quarter of 2018.
    As previously announced, the Company expects to
    report topline results from the TIVO-3 study, AVEO's Phase 3 trial of
    tivozanib as a third-line treatment for advanced renal cell carcinoma
    (aRCC), in the fourth quarter of 2018, approximately 6-8 weeks after
    the trial records 255 progression free survival (PFS) events. AVEO
    plans to announce when 255 PFS events have occurred and the topline
    data analysis for the trial has been initiated. Together with the
    TIVO-1 study, TIVO-3 is designed to serve as the basis for a potential
    U.S. approval of tivozanib (FOTIVDA®) as a first- and
    third-line treatment for aRCC.

Tivozanib (FOTIVDA®) European Union Updates

  • Tivozanib (FOTIVDA®) Launched in Scotland
    for the Treatment of aRCC.
    In July 2018, FOTIVDA®
    was launched in Scotland for the first-line treatment of adult
    patients with aRCC after the Scottish Medicines Consortium approved
    its use. FOTIVDA® is now available in Germany, Scotland,
    the U.K., and Austria. FOTIVDA® was granted European
    Medicines Association approval in August 2017 for the treatment of
    adult patients with aRCC in the European Union plus Norway and Iceland.
  • Tivozanib (FOTIVDA®) Expanded Access
    Program Launched in Italy.
    In July 2018, The Program of
    Therapeutic Use Tivozanib (Expanded Access Program) for renal cell
    carcinoma (RCC) was initiated, allowing patients in Italy to have
    access to tivozanib as front-line therapy. In addition, EUSA pharma is
    effecting the reimbursement procedure with the Italian Drug Agency
    (AIFA), a process which is expected to be finalized in the coming

Additional Tivozanib Updates

  • Updated Phase 2 Results from the TiNivo Trial of Tivozanib and
    Nivolumab (OPDIVO
    ®) in aRCC to be Presented
    at the 2018 ESMO Annual Meeting.
    Updated Phase 2 data from the
    Phase 1b/2 TiNivo study of tivozanib in combination with nivolumab
    (OPDIVO®, Bristol-Myers Squibb), an immune checkpoint, or
    PD-1, inhibitor, will be presented at the 2018 European Society for
    Medical Oncology (ESMO) Annual Meeting in Munich. The data will be
    presented during a poster presentation titled, "TiNivo: Tivozanib
    combined with nivolumab: safety and efficacy in patients with
    metastatic renal cell carcinoma (mRCC)" (Presentation Number 878P).
    Previously presented results support the potential advantages of a
    combination therapy using a high-specificity VEGF inhibitor TKI in
    connection with an immune checkpoint therapy in renal cancer.

Ficlatuzumab Update

  • Trials in Progress Poster for Phase 2 Study of Ficlatuzumab in
    Combination with Cetuximab in HNSCC to be Presented at the 2018 ESMO
    Annual Meeting.
    Data from an ongoing, investigator-sponsored Phase
    2 trial of ficlatuzumab and cetuximab (ERBITUX®), an
    EGFR-targeted antibody, in patients with cetuximab-resistant,
    metastatic head and neck squamous cell carcinoma (HNSCC) will be
    presented as a trials in progress poster at the 2018 ESMO Annual
    Meeting (Presentation Number 1124TiP). This randomized multi-center
    study, which is being conducted under the direction of Julie E.
    Bauman, MD, MPH, Professor of Medicine, Chief, Division of
    Hematology/Oncology, Associate Director of Translational Research,
    University of Arizona Cancer Center, is expected to enroll
    approximately 60 patients randomized to receive either ficlatuzumab
    alone or ficlatuzumab and cetuximab.
  • Trials in Progress Poster for Phase 1b Study of Ficlatuzumab in
    Combination with Gemcitabine and Nab-paclitaxel in Pancreatic Cancer
    Presented at the 2018 ASCO Annual Meeting.
    Data from an ongoing,
    investigator-sponsored Phase 1b study to test the safety and
    tolerability of ficlatuzumab when combined with nab-paclitaxel and
    gemcitabine in previously untreated metastatic pancreatic ductal
    cancer (PDAC) was presented as a trials in progress poster (Poster
    Board: #330b, Abstract TPS4152) at the 2018 American Society of
    Clinical Oncology (ASCO) Annual Meeting in Chicago, IL in June 2018.
    The study, which is being conducted under the direction of Kimberly
    Perez, MD at the Dana-Farber Cancer Institute, is currently enrolling,
    with an expected total enrollment of approximately 30 patients.

Corporate Update

  • Added to the Russell 2000, Russell 3000, and Russell Microcap
    In June 2018, AVEO announced that it had been added to
    the Russell 2000®, Russell 3000®, and Russell
    Microcap® Indexes as part of FTSE's annual reconstitution.
    Russell U.S. Indexes are widely used by investment managers and
    institutional investors as the basis for index funds and as benchmarks
    for active investment strategies. Approximately $9 trillion in assets
    are benchmarked against Russell U.S. Indexes.

Second Quarter 2018 Financial Highlights

  • AVEO ended Q2 2018 with $18.1 million in cash, cash equivalents and
    marketable securities as compared with $33.5 million at December 31,
  • Total revenue for Q2 2018 was approximately $0.4 million compared with
    $0.4 million for Q2 2017.
  • Research and development expense for Q2 2018 was $4.9 million compared
    with $6.9 million for Q2 2017.
  • General and administrative expense for Q2 2018 was $2.8 million
    compared with $2.3 million for Q2 2017.
  • Net income for Q2 2018 was $4.0 million, or income of $0.03 per basic
    share and a loss of $0.06 per diluted share, compared with net loss of
    $33.3 million for Q2 2017, or a loss of $0.30 per basic and diluted
    share. Approximately $11.1 million of Q2 2018 net income was a
    non-cash gain attributable to the decrease in the fair value of the
    2016 private placement warrant liability that principally resulted
    from the decrease in the stock price that occurred within the quarter.
    In Q2 2017, the non-cash loss attributable to the increase in the fair
    value of such warrant liability was $23.9 million.

Financial Guidance

We believe that our $18.1 million in cash resources would allow us to
fund our planned operations into the first quarter of 2019. This
estimate assumes no receipt of additional milestones from our partners,
no additional funding from new partnership agreements, no additional
equity or debt financings, and no sales of equity through the exercise
of our outstanding warrants issued in connection with our 2016 private
placement or outstanding warrants issued in connection with the recent
settlement of our securities class action litigation.

About AVEO

AVEO Pharmaceuticals, Inc. (the "Company") is a biopharmaceutical
company dedicated to advancing a broad portfolio of targeted medicines
for oncology and other areas of unmet medical need. The Company's
strategy is to retain North American rights to its oncology portfolio
while securing partners in development and commercialization outside of
North America. The Company is seeking to develop and commercialize its
lead candidate tivozanib in North America as a treatment for renal cell
carcinoma ("RCC"). The Company has outlicensed tivozanib (FOTIVDA®)
for oncology in Europe and other territories outside of North America.
Tivozanib is approved in the European Union, as well as Norway and
Iceland, for the first-line treatment of adult patients with advanced
RCC ("aRCC") and for adult patients who are vascular endothelial growth
factor receptor and mTOR pathway inhibitor-naïve following disease
progression after one prior treatment with cytokine therapy for aRCC.
The Company has entered into partnerships to fund the development and
commercialization of AV-203 and ficlatuzumab, both clinical stage assets
in oncology. The Company is currently seeking a partner to develop the
AV-353 platform, a preclinical asset, worldwide for the potential
treatment of pulmonary arterial hypertension. The Company previously
partnered with Novartis International Pharmaceutical Ltd. ("Novartis")
to develop the AV-380 program in cachexia and other indications.
Effective August 28, 2018 the Company expects to regain the rights to
AV-380 and is considering a variety of options to continue the program's

For more information, please visit the Company's website

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements of AVEO that
involve substantial risks and uncertainties. All statements, other than
statements of historical fact, contained in this press release are
forward-looking statements. The words "anticipate," "believe," "expect,"
"intend," "may," "plan," "potential," "could," "should," "would,"
"seek," "look forward," "advance," "goal," "strategy," 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 Company's plans and
prospects for advancing its lead development programs, including its
expectations regarding the timing for top line results from the Phase 3
TIVO-3 study of tivozanib in aRCC, and for providing an update to the
Phase 2 portion of the TiNivo Study of Tivozanib and Nivolumab (OPDIVO®)
in mRCC; the advancement of AVEO's pipeline; AVEO's cash runway; and
AVEO's strategy, prospects, plans and objectives, including as they
pertain specifically to tivozanib and leveraging partnerships. AVEO has
based its expectations and estimates on assumptions that may prove to be
incorrect. As a result, readers are cautioned not to place undue
reliance on these expectations and estimates. 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 AVEO's ability
to enter into and maintain its third party collaboration and license
agreements, and its ability, and the ability of its collaborators,
licensees and other strategic partners, to achieve development and
commercialization objectives under these arrangements; and AVEO's
ability, and the ability of its licensees, to demonstrate to the
satisfaction of applicable regulatory agencies such as the FDA the
safety, efficacy and clinically meaningful benefit of AVEO's product
candidates, including tivozanib. AVEO faces other risks relating to its
business as well, including risks relating to its and its collaborators'
ability to successfully enroll and complete clinical trials, including
the TIVO-3 and TiNivo studies; AVEO's ability to achieve and maintain
compliance with all regulatory requirements applicable to its product
candidates; AVEO's ability to obtain and maintain adequate protection
for intellectual property rights relating to its product candidates and
technologies; AVEO's ability to successfully implement its strategic
plans; AVEO's ability to raise the substantial additional funds required
to achieve its goals, including those goals pertaining to the
development and commercialization of tivozanib; unplanned capital
requirements; adverse general economic and industry conditions;
competitive factors; and those risks discussed in the section titled
"Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations—Liquidity and Capital Resources"
included in AVEO's quarterly and annual reports on file with the
Securities and Exchange Commission (SEC) and in other filings that AVEO
may make with the SEC in the future. 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 may
cause its views to change. 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 other than the date of this press release. Any reference to AVEO's
website address in this press release is intended to be an inactive
textual reference only and not an active hyperlink.

Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
  Three Months Ended   Six Months Ended
June 30, June 30,
2018   2017 2018   2017
Collaboration and licensing revenue $ 336 $ 351 $ 1,316 $ 2,883
Partnership royalties   97     143  
  433   351   1,459   2,883
Operating expenses:
Research and development 4,887 6,881 10,291 14,837
General and administrative 2,827 2,302 5,437 4,633
Settlement costs   (709 )     (667 )  
  7,005   9,183   15,061   19,470
Loss from operations (6,572 ) (8,832 ) (13,602 ) (16,587 )
Other income (expense), net:
Interest expense, net (549 ) (530 ) (1,042 ) (1,081 )
Change in fair value of PIPE Warrant liability   11,125   (23,925 )   9,660   (24,409 )
Other income (expense), net   10,576   (24,455 )   8,618   (25,490 )
Income (loss) before provision for income taxes 4,004 (33,287 ) (4,984 ) (42,077 )
Provision for income taxes         (50 )
Net income (loss) $ 4,004 $ (33,287 ) $ (4,984 ) $ (42,127 )
Basic net income (loss) per share
Net income (loss) per share $ 0.03 $ (0.30 ) $ (0.04 ) $ (0.45 )

Weighted average number of common shares outstanding

  118,940   110,550   118,891   93,493
Diluted net income (loss) per share
Net income (loss) per share $ (0.06 ) $ (0.30 ) $ (0.11 ) $ (0.45 )
Weighted average number of common shares and dilutive common share
equivalents outstanding
  128,692   110,550   129,372   93,493
Consolidated Balance Sheet Data
(In thousands)
June 30, December 31,
2018   2017
Cash, cash equivalents and marketable securities $ 18,089 $ 33,525
Accounts receivable 973 402
Prepaid expenses and other current assets 937 1,256
Insurance recovery 15,000
Other assets       7   15
Total assets $     20,006 $ 50,198
Liabilities and stockholders' deficit
Accounts payable and accrued expenses $ 11,497 $ 13,215
Loans payable, net of discount 18,730 18,477
Deferred revenue and research and development reimbursements 5,743 2,820
PIPE Warrant liability 26,985 37,746
Estimated settlement liability 1,406 17,073
Other liabilities 1,090 1,630
Stockholder's deficit       (45,445 )   (40,763 )
Total liabilities and stockholders' deficit $     20,006 $ 50,198

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