AVEO Pharmaceuticals reports net loss of $14.4 million for first-quarter 2010

Apr 29 2010

AVEO Pharmaceuticals, Inc. (NASDAQ: AVEO), a biopharmaceutical company focused on discovering, developing and commercializing cancer therapeutics, today announced financial results for the quarter ended March 31, 2010, provided an update on progress towards achievement of 2010 goals as well as 2010 financial guidance.

“In addition, we initiated patient enrollment at multiple sites around the world in TIVO-1, which is the first ever Phase 3 study in RCC designed to evaluate superiority in a head-to-head comparison against a widely prescribed anti-angiogenesis therapy in first-line RCC.”

"We believe that we have made important progress with our lead product candidate tivozanib this quarter, including conducting an updated analysis of new data from our successful Phase 2 clinical trial in patients with renal cell carcinoma (RCC) which was presented at the 2010 Genitourinary Cancers Symposium in March of this year. The data from this trial showed a median progression-free survival of 14.8 months in patients with clear cell RCC who had undergone nephrectomy. The same patient population is currently being studied in TIVO-1, our global Phase 3 clinical trial of tivozanib in advanced RCC evaluating the efficacy of tivozanib compared to sorafenib," stated Tuan Ha-Ngoc, president and chief executive officer of AVEO. "In addition, we initiated patient enrollment at multiple sites around the world in TIVO-1, which is the first ever Phase 3 study in RCC designed to evaluate superiority in a head-to-head comparison against a widely prescribed anti-angiogenesis therapy in first-line RCC." The trial began enrolling patients in February 2010 and AVEO expects to enroll 500 patients at more than 90 sites in 16 countries.

Financial Highlights

Net loss for the quarter ended March 31, 2010 was $14.4 million, or $2.27 per common share, compared with $9.4 million, or $5.92 per common share, for the quarter ended March 31, 2009.

Total revenues for the quarter ended March 31, 2010 were $10.9 million compared with $3.7 million for the first quarter of 2009. Revenue during the first quarter of 2010 primarily reflected license fees, research and development funding and milestones earned under the company's strategic partnerships with Biogen Idec, Merck (formerly Schering-Plough), and OSI Pharmaceuticals. Included in revenue for the first quarter is a $5 million development milestone from Biogen Idec related to the AV-203 collaboration, AVEO's ErbB3 inhibitor antibody.

Research and development expenses for the quarter ended March 31, 2010 totaled $22.6 million compared with $9.7 million for the same period of 2009. The expense for the first quarter includes a $10 million payment to Kyowa Hakko Kirin in connection with the TIVO-1 study.

General and administrative expense was $2.8 million for the first quarter of 2010 compared with $2.6 million for the first quarter of 2009.

As of March 31, 2010, AVEO had cash, cash equivalents and marketable securities of $96.1 million compared with $51.3 million on December 31, 2009.

On March 17, 2010, the company completed its initial public offering of 9 million shares of common stock. On March 31, 2010, the underwriters for the initial public offering exercised their option to purchase an additional 968,000 shares of common stock to cover over-allotments. The closing of the sale of the additional shares occurred on April 6, 2010 and, therefore, are not included in the first quarter 2010 financial results. As a result of these two transactions, AVEO received net proceeds of approximately $80 million.

Approximately 29.9 million shares of common stock were outstanding at March 31, 2010.

Full Year 2010 Financial Guidance

AVEO expects to achieve the following financial results for the full-year ending December 31, 2010:

• Revenue is expected to range between $40 million and $50 million and be comprised primarily of license fees, research and development funding and milestones earned under the company's existing strategic partnerships.
• Net loss is expected to range between $74 million and $79 million or between $3.00 and $3.20 per share, which includes $4 million of non-cash expense related to stock-based compensation. Net loss guidance is based upon an expected weighted average share count of 24.8 million.
• Expenses related to the TIVO-1 trial in 2010 are expected to range between $27 million and $30 million, based upon current estimates for patient accrual rates.
• The company expects to have a year-end balance of a minimum of $50 million in cash, cash equivalents and marketable securities.

Recent Accomplishments

Thus far, this year, the company has made important progress toward achievement of its corporate goals for 2010. Key accomplishments include:

• Initiated Patient Enrollment in Phase 3 Clinical Trial: AVEO initiated patient enrollment in TIVO-1, a global Phase 3 clinical trial of tivozanib in patients with advanced RCC. TIVO-1 is evaluating the efficacy of tivozanib compared to sorafenib (Nexavar®), a U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMEA) approved therapy for RCC. TIVO-1 is the first ever Phase 3 study in RCC designed to evaluate superiority in a head-to-head comparison against a widely prescribed anti-angiogenesis therapy in first-line RCC. The primary endpoint of the trial is to compare the progression-free survival (PFS) of tivozanib vs. sorafenib. Secondary endpoints include overall survival, objective response rate, safety and quality of life. This trial is expected to enroll approximately 500 patients and is being led by Robert Motzer, M.D., of Memorial Sloan Kettering Cancer Center.
• Presented Significant Phase 2 PFS Data at ASCO GU: AVEO presented an updated analysis of the results from its 272-patient Phase 2 clinical trial in March at the 2010 Genitourinary Cancers Symposium, showing that the median PFS achieved by patients with advanced clear cell RCC who had undergone a prior nephrectomy was 14.8 months - comparing favorably to historical data from trials testing other currently approved VEGF receptor inhibitors in RCC. Hypertension, which has been proposed as a biomarker of clinical effect among agents targeting the VEGF receptor tyrosine kinases in RCC, was the most commonly reported treatment-related adverse effect, and was observed in 50% of treated patients. In the study, development of hypertension was directly associated with improved clinical outcomes among patients overall and in the subset of patients with clear cell RCC who had undergone prior nephrectomy. The median PFS was 21.4 months for this subset of patients who had diastolic blood pressures greater than 90 mm Hg. Off-target toxicities commonly associated with other targeted therapies, such as mucositis, fatigue and hand-foot syndrome, were notably low in the tivozanib group, underscoring a favorable tolerability profile and potential for combinability with other therapeutic agents.
• Received Milestone Payment from Biogen Idec under ErbB3 Program: In April 2010, AVEO received a $5 million milestone payment from Biogen Idec for the selection of the first humanized antibody development candidate from AVEO's ErbB3 program. Previously in June 2009, AVEO received a $5 million milestone payment from Biogen Idec for the achievement of the first preclinical discovery and development milestone, bringing the total milestone payments received to $10 million in the aggregate. Under the terms of the strategic partnership with Biogen Idec, AVEO is eligible to receive an additional $5 million if certain additional preclinical discovery goals are achieved.
• Presented New Data on Notch Antibody Program at AACR: AVEO presented data from several studies on AVEO's Human Response Platform™ and antibody platform at the American Association for Cancer Research (AACR) annual meeting. Of note, AVEO presented preclinical data which demonstrate that its Notch1-specific monoclonal antibody is a highly potent inhibitor of Notch1 function in both in vitro and in vivo models. Effective blockade of Notch signaling has been demonstrated to effectively inhibit tumor angiogenesis, supporting the development of AVEO's Notch1 antibody as an anti-angiogenic agent. Recent data have also suggested an important role for Notch signaling in cancer stem cell maintenance. In the AVEO studies, the expression of Notch pathway-related genes was correlated with Notch pathway dependence in human cancer cell lines to identify tumors that are dependent upon tumor autonomous Notch signaling. Expression of a single Notch target gene, HeyL, was correlated with sensitivity of human cancer cell lines to inhibition of ligand-dependent Notch signaling, confirming HeyL's role as a predictive biomarker of Notch-dependent tumors. Moreover, elevated HeyL expression identified a significant subset of tumors driven by the mutant Kras oncogene that may be dependent upon Notch signaling. Importantly, the lack of toxicity observed with AVEO's anti-Notch1 antibody in mouse models suggests that the antibody may be combinable with other targeted therapies to enhance anti-angiogenesis effects in the treatment of cancer.

Upcoming Activities

AVEO expects to have a presence at the American Society of Clinical Oncology (ASCO) Annual Meeting 2010, June 4-8, 2010, Chicago, Ill.

Source AVEO Pharmaceuticals