AVEO reports total revenue of $133.6 million for first quarter 2011

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Apr 28 2011

AVEO Pharmaceuticals, Inc. (NASDAQ: AVEO) today reviewed key first quarter accomplishments and reported consolidated financial results for the first quarter of 2011.

"AVEO began 2011 with significant momentum with the commencement of our collaboration with Astellas to develop and commercialize tivozanib outside of Asia, and this collaboration is off to a strong start," said Tuan Ha-Ngoc, president and chief executive officer of AVEO. "We also continue to increase the visibility and interest in tivozanib, as well as ficlatuzumab and our pipeline of monoclonal antibodies, through presentations at various medical and scientific meetings."

Mr. Ha-Ngoc added, "We look forward to reviewing top-line data from TIVO-1, our pivotal Phase 3 trial for tivozanib, later this year. As an oncology trial with the primary endpoint of progression-free survival, the timeline for TIVO-1 is entirely dependent upon the accumulation of qualifying events. Based upon the current event-rate, we do not anticipate top-line TIVO-1 data until at least the fourth quarter of this year."

First Quarter 2011 Key Accomplishments

Strategic, worldwide collaboration agreement with Astellas to develop and commercialize tivozanib outside of Asia: In February, AVEO and Astellas Pharma, Inc. entered into a worldwide agreement to develop and commercialize tivozanib outside of Asia. Under the terms of the agreement, AVEO received $125 million in up-front payments from Astellas. AVEO is also eligible to receive approximately $1.3 billion in potential milestones comprised of $575 million in clinical and regulatory milestones, including $90 million in connection with regulatory filings and marketing approval in North America and Europe for tivozanib as a monotherapy in first-line renal cell carcinoma (RCC), as well as more than $780 million in commercial milestones. In addition to the ongoing Phase 3 TIVO-1 trial and Phase 1b combination studies of tivozanib, AVEO and Astellas will jointly conduct and fund the accelerated expansion of tivozanib clinical development into additional solid tumor types beyond RCC prior to top-line TIVO-1 data.
Ongoing presentation of tivozanib clinical data: Data from AVEO's ongoing tivozanib clinical trials were highlighted in multiple poster presentations at the American Society of Clinical Oncology 2011 Gastrointestinal Cancers (ASCO GI) Symposium and the American Society of Clinical Oncology 2011 Genitourinary Cancers (ASCO GU) Symposium. At ASCO GI, previously reported positive results from a Phase 1b study evaluating tivozanib in combination with FOLFOX6 in patients with advanced gastrointestinal cancers showed the combination was well-tolerated at the full recommended tivozanib dose and schedule and standard FOLFOX6 dose; and, partial responses in more than a third (35 percent) of patients evaluated>
Received USAN name for novel, internally discovered anti-HGF/c-MET pathway antibody: In February, AVEO announced that the United States Adopted Names (USAN) Council, in consultation with the World Health Organization (WHO) International Nonproprietary Names Expert Committee, approved the use of the nonproprietary generic name "ficlatuzumab" for AV-299. Ficlatuzumab is currently being evaluated in a Phase 2 clinical trial in combination with gefitinib (Iressa™) versus gefitinib monotherapy in patients with non-small cell lung cancer.

First Quarter 2011 Financial Results

Total collaboration revenues for the first quarter ended March 31, 2011 were $133.6 million compared with $10.9 million for the first quarter of 2010. The primary driver for the increase was revenue recognized in conjunction with AVEO's collaboration agreement with Astellas.
Research and development (R&D) expense for the first quarter of 2011 was $38.0 million compared with $22.6 million for the first quarter of 2010. The increase in R&D spending was primarily due to the expense of amounts due to Kyowa Hakka Kirin from the up-front license payment received from Astellas as well as an increase in clinical costs associated with ficlatuzumab, partially offset by reimbursable amounts under the cost sharing provisions of AVEO's collaboration agreement with Astellas.
General and administrative (G&A) expense for the first quarter of 2011 was $9.2 million compared with $2.8 million for the first quarter of 2010. The increase in G&A spending was primarily driven by non-recurring expenses for strategic, legal and financial advisors incurred in connection with AVEO's collaboration agreement with Astellas, as well as an increase in personnel-related expenses.
Net income for the first quarter of 2011 was $85.4 million, or basic and diluted earnings per share of $2.38 and $2.28, respectively, compared with a net loss of $14.4 million, or basic and diluted loss per share of $2.27, for the first quarter of 2010.
AVEO ended the first quarter of 2011 with cash, cash equivalents and marketable securities of $232.6 million. This includes the up-front cash payment of $125 million received in connection with the Astellas collaboration, of which AVEO retained net proceeds of $97.6 million after payments to Kyowa Hakko Kirin and strategic, legal and financial advisors made in the second quarter of 2011, and reflects a $10.2 million payment to Merck for the purchase of ficlatuzumab inventory. AVEO recognized $1.1 million of the total $10.2 million as R&D expense in the first quarter of 2011, and the remaining $9.1 million is included in prepaid expenses and other current assets, which AVEO expects to recognize as R&D expense in the second quarter of 2011.

Financial Guidance

AVEO is maintaining its financial guidance and continues to expect to end 2011 with at least $125 million in cash, cash equivalents and marketable securities. AVEO continues to anticipate that this capital is sufficient to fund its operations through 2012.

Upcoming Activities

AVEO expects to present at the following investor conferences: