Centocor Ortho Biotech, AVEO sign license deal to develop, commercialize RON-targeted antibodies

AVEO Pharmaceuticals, Inc. (NASDAQ: AVEO) today announced it has entered into an exclusive license agreement with Centocor Ortho Biotech Inc. for the worldwide development and commercialization of AVEO's internally-discovered antibodies targeting the RON (Recepteur d'Origine Nantais) receptor. The RON pathway is believed to be involved in several aspects of cancer development including regulation of tumor growth, survival and metastasis, and bone disruption. In preclinical studies, AVEO's proprietary anti-RON antibodies have demonstrated strong anti-tumor activity.

AVEO is initially receiving $15 million. Under the terms of the license agreement, AVEO will receive the first half of this amount as an up-front payment from Centocor Ortho Biotech. Through a separate equity private placement and stock purchase agreement, the second half will be received through the sale of newly issued shares of AVEO common stock to an affiliate of Centocor Ortho Biotech, Johnson & Johnson Development Corporation. Under the license agreement, AVEO is eligible to receive up to $540 million in milestone payments based upon the achievement of specified development, regulatory and commercialization goals. Upon commercialization, AVEO will be entitled to a tiered, double-digit royalty on net sales worldwide. Centocor Ortho Biotech will be responsible for all clinical development, manufacturing, and commercialization activities and costs. Centocor Ortho Biotech will also fund certain research conducted by AVEO, including translational research studies using its Human Response Platform™ to identify biomarkers for patients most likely to benefit from treatment with RON-targeted antibodies.

"We are delighted to enter into this strategic alliance," said Elan Ezickson, executive vice president and chief business officer of AVEO. "We believe that the RON pathway is a promising novel target for combating cancer growth and progression. This license agreement highlights the broad potential of our unique monoclonal antibody R&D capabilities and further supports AVEO's strategy to maximize our proprietary cancer biology platform to build a sustainable cancer therapeutics company."