AVEO Oncology Reports Third Quarter 2014 Financial Results
“At AVEO, we continue to execute on all aspects of our strategic plan.
We are focused on the progression of AV-380 in cancer cachexia toward an
IND application filing next year, while remaining opportunistic to
leveraging partner resources with the rest of our pipeline,” said
Recent Program Highlights
AV-380 – At the 2nd
Cancer Cachexia Conferencein September, AVEOpresented results from four preclinical studies of AV-380, the Company’s potent, humanized inhibitory antibody targeting growth differentiation factor 15 (GDF15), in various in vivo cachexia models and in vitro assays. In addition to the poster presentations, the Company’s research was selected for presentation in an oral session titled “Targeting GDF15 with the inhibitory antibody AV-380 for the treatment of Cancer Cachexia.” The studies demonstrate that elevated levels of circulating GDF15 drive the development of cancer cachexia in tumor bearing mice, and that its inhibition, with AV-380, completely reversed body weight loss and restored normal body composition, including fat, muscle and organ size. They also demonstrate that the combination of AV-380, a potential anti-cachexia agent, with an anti-cancer treatment, dramatically prolonged survival compared to mice treated with anti-cancer therapy alone. AVEOis progressing AV-380 toward clinical study, which is expected to begin in the second half of 2015. The Company is also actively pursuing partnerships to realize the full potential of AV-380 within and beyond cancer cachexia.
Ficlatuzumab – At the
European Society for Medical Oncology(ESMO) 2014 Congress, AVEOand Biodesix presented results from a retrospective exploratory analysis using VeriStrat®, a commercially available serum protein test, to identify patients most likely to benefit from the addition of ficlatuzumab, AVEO’s potent hepatocyte growth factor (HGF) inhibitory antibody, to gefitinib (IRESSA®), an EGFR TKI therapy, in a randomized Phase 2 study in previously untreated Asian subjects with NSCLC. The results suggested that VeriStrat may be used to more precisely classify the response of a subset of NSCLC patients who, based on EGFR mutation status, should be candidates for an EGFR inhibitor yet appear not to respond to the erlotinib mono-therapy without the addition of ficlatuzumab. AVEOand Biodesix plan to conduct a confirmatory Phase 2 study using a Biodesix VeriStrat “Poor” classification as a selective biomarker for the combination of ficlatuzumab and an EGFR TKI, versus an EGFR TKI alone, in previously untreated, EGFR mutation-positive patients with NSCLC. The study is expected to be initiated before year-end.
Tivozanib – At the ESMO 2014
Congress, AVEOpresented posters highlighting results from two Phase 2 clinical studies of tivozanib, the Company’s inhibitor of vascular endothelial growth factor (VEGF) 1, 2, and 3 receptors, in patients with advanced colorectal and kidney cancers. In the first poster, titled “BATON-CRC: a phase 2 randomized trial comparing tivozanib (tivo) + mFOLFOX6 with bevacizumab (bev) + mFOLFOX6 in stage IV metastatic colorectal cancer (mCRC),” interim study results suggested that the combination of tivozanib plus mFOLFOX6 is comparable to bevacizumab plus mFOLFOX6 in the intent-to-treat population, with an acceptable safety profile. The study was discontinued following a prespecified interim futility analysis for superiority.
In a second poster, titled “Phase 2 clinical evaluation of preclinically defined biomarkers for vascular endothelial growth factor (VEGF) tyrosine kinase inhibitor (TKI) tivozanib in renal cell carcinoma (RCC),” study results suggested a low myeloid signature score in RCC patients may predict a positive clinical response when treated with tivozanib, including significantly increased progression free survival.
AV-203 – At the
American Society of Clinical Oncology( ASCO) 2014 Annual Meeting, AVEOpresented results from a first-in-human Phase 1 study of AV-203, the Company’s potent, high-affinity ErbB3 (HER3) monoclonal antibody, in patients with metastatic or advanced solid tumors. The study established a recommended Phase 2 dose of AV-203, demonstrated good tolerability and reached the maximum planned dose of AV-203 monotherapy. The data also showed promising early signs of activity and provide a rationale for further investigation of AV-203 as novel anti-cancer therapy. AVEOis actively pursuing partnerships to further advance the development of AV-203.
Third Quarter 2014 Financial Highlights
At the end of the third quarter,
AVEOannounced that, as part of its plan to decrease operational expenses, the Company entered into a termination agreement with respect to the lease for its headquarters in Cambridge, Massachusetts, reducing the Company’s existing lease obligations by $110 millionin exchange for a termination fee of approximately $7.8 milliondue upon execution of the agreement, and $7.8 millionpayable over the subsequent nine months. In addition, the Company announced an amendment to its debt financing facility with Hercules Technology Growth Capital(HTGC) to include a new $10 millionloan.
Ended Q3 2014 with
$63.4 millionin cash, cash equivalents and marketable securities.
Total collaboration revenue was approximately
$0.9 millionfor Q3 2014 compared with $0.3 millionfor Q3 2013. The increase was due to revenue recognized in connection with the change in the estimated period of performance associated with the termination of the Company’s collaboration with Astellas.
Research and development (R&D) expense was
$8.5 millionfor Q3 2014 compared with $19.4 millionfor Q3 2013. The reduction in R&D expense was primarily due to a decrease in manufacturing costs related to the completion of ficlatuzumab manufacturing in Q3 2013, a decrease in tivozanib clinical trial costs associated with the wind down of the development program, and a reduction in personnel-related expenses following AVEO’s June 2013strategic restructuring.
General and administrative (G&A) expense was
$5.1 millionfor Q3 2014 compared with $4.4 millionfor Q3 2013. The increase in G&A expense was primarily due to additional legal fees related to the Company’s ongoing shareholder litigation and a reduction in expense reimbursements provided to AVEOfrom Astellas as a result of a decrease in shared tivozanib costs.
Restructuring and lease exit expense was
$1.4 millionfor Q3 2014 compared with $0.1 millionfor Q3 2013. The expense incurred during Q3 2014 relates to space that the Company ceased using during 2014, while the Q3 2013 expense relates to severance and employee benefits incurred as part of the June 2013strategic restructuring.
Net loss for Q3 2014 was
$14.4 million, or $0.28per basic and diluted net loss per share, compared with net loss of $24.3 million, or $0.47per basic and diluted net loss per share, for Q3 2013.
Financial Comparison of Second and Third Quarters 2014
The Company had net cash outflows of approximately
$1.5 millionin Q3 2014, compared to $23 millionin Q2 2014.
Significant cash inflows included the following:
$10 millionin new debt financing
$14.7 millionof reimbursement of construction-related capital expenditures in accordance with AVEO’s lease arrangement for its headquarters at 650 E. Kendall St., Cambridge, Massachusettsthat were received from AVEO’s landlord.
- Proceeds of
Significant cash outflows included the following:
$7.8 millionof lease termination fees as 50% of the termination fee was paid upon execution. The remaining 50% is payable on a monthly basis through June 2015.
The Company made payments toward loan principal and interest in Q3
$3.1 millioncompared to $4.3 millionin Q2 2014. The decrease relates to a $1.2 milliondeferred charge paid in June per the terms of original loan agreement.
The Company did not incur construction related capital expenditures in
Q3 2014 as construction had already been completed on the Company’s
headquarters prior to the beginning of Q3 2014. Construction related
$4.0 millionin Q2 2014.
R&D expense was
$8.5 millionfor Q3 2014 compared to $9.3 millionin Q2 2014. The decrease in R&D expenses was primarily due to a reduction in tivozanib development and clinical study costs related to the wind down of the studies. The components of R&D expense are as follows:
|Research & Development Expense||
|Headcount and Programs||$||7,044||$||8,251||$||(1,207||)|
|Reimbursable Partnership Expenses||$||(1,461||)||$||(1,218||)||$||(243||)|
|Stock-Based Compensation Expense||$||406||$||197||$||209|
|Sub Total Non-Program R&D Expense||$||2,902||$||2,267||$||635|
|Total R&D Expense||$||8,485||$||9,300||$||(815||)|
G&A expense was
$5.1 millionfor Q3 2014 compared to $4.8 millionfor Q2 2014. The increase in G&A expense was primarily due to an increase in professional fees.
Based on its current operating plan, the Company expects to remain on
target to end 2014 with approximately
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements of
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
|For the Three Months||For the Nine Months|
|Ended September 30,||Ended September 30,|
|Research and development||8,485||19,414||29,552||56,579|
|General and administrative||5,084||4,440||15,485||24,213|
|Restructuring and lease exit||1,403||77||10,426||8,013|
|Loss from operations||(14,099||)||(23,608||)||(37,456||)||(87,835||)|
|Other income and expense:|
|Other income (expense), net||98||32||103||(120||)|
|Other expense, net||(337||)||(698||)||(1,389||)||(2,469||)|
|Net loss per share - basic and diluted||$||(0.28||)||$||(0.47||)||$||(0.75||)||$||(1.78||)|
|Weighted average number of common shares outstanding||51,771||51,443||51,690||50,719|
|Consolidated Balance Sheet Data|
|September 30,||December 31,|
|Cash, cash equivalents and marketable securities||$||63,393||$||118,506|
|Prepaid expenses and other current assets||6,452||9,429|
|Property and equipment, net||14,685||14,140|
|Liabilities and stockholders’ equity|
|Accounts payable and accrued expenses||$||16,554||$||17,501|
|Total loans payable||20,445||19,205|
|Total deferred revenue||383||18,392|
|Total deferred rent||14,041||20,072|
|Total liabilities and stockholders’ equity||$||86,233||$||146,346|
Source: AVEO Oncology
David Pitts, 212-600-1902