Company Update (NASDAQ:AVEO): AVEO Pharmaceuticals, Inc. Provides 3Q:17 Update


AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) reported financial results for the third quarter ended September 30, 2017 and provided a business update.

“The third quarter was a transformative period for AVEO, with the achievement of significant milestones in each of the three pillars of our global strategy for tivozanib. Notably, with the European approval of tivozanib (FOTIVDA®) in advanced RCC, we have transitioned from a development stage company to one with a commercially approved product, a watershed achievement for any emerging life sciences company,” said Michael Bailey, president and chief executive officer of AVEO. “In addition, TIVO-3, our U.S. registration study, successfully passed the interim futility analysis with no changes to study protocol. Finally, we presented promising Phase 1 immunotherapy combination data from the Phase 1/2 TiNivo study of tivozanib and nivolumab (OPDIVO®), and announced that EUSA Pharma, our European licensee for tivozanib, has opted into our combination development strategy.”

Mr. Bailey continued, “In addition, we expect the imminent launch of tivozanib (FOTIVDA®) in Europe, the anticipated readout of TIVO-3 in the first quarter of 2018 and Phase 2 data from TiNivo in the first half of 2018. Supporting these efforts, we have a balance sheet bolstered by recent milestone payments that could be extended by additional potential payments from EUSA related to reimbursement approval in EU5 countries, as well as double-digit royalty payments on net sales for tivozanib in Europe.”

Recent Updates

  • Tivozanib (FOTIVDA®) Approved in the European Union for the Treatment of Advanced Renal Cell Carcinoma (RCC). In August 2017, AVEO announced that the European Commission (EC) approved tivozanib (FOTIVDA®) for the treatment of adult patients with RCC in the European Union plus Norway and Iceland. Tivozanib is indicated for the first line treatment of adult patients with advanced RCC and for adult patients who are vascular endothelial growth factor receptor (VEGFR) and mTOR pathway inhibitor-naïve following disease progression after one prior treatment with cytokine therapy for advanced RCC.
  • Successfully Passed the TIVO-3 Futility Analysis with No Changes to Study Protocol. In October 2017, AVEO announced the completion of a pre-planned interim futility analysis of the Phase 3 TIVO-3 trial, the Company’s randomized, controlled, multi-center, open-label study to compare tivozanib (FOTIVDA®) to sorafenib (NEXAVAR®) in subjects with advanced RCC. Based on the results of the futility analysis, which were reviewed by an independent statistician, the study continued as planned without modification. The analysis did not allow for early stopping due to efficacy to assure adequate follow-up for the key secondary endpoint of overall survival. The Company continues to expect the TIVO-3 trial to read out in the first quarter of 2018. The TIVO-3 trial, together with the previously completed TIVO-1 trial of tivozanib in the first line treatment of RCC, is designed to support a potential regulatory approval of tivozanib in the U.S. as a first and third line treatment for RCC.
  • Phase 1 Results from the TiNivo Trial of Tivozanib and Nivolumab (OPDIVO®) in RCC – Oral Presentation at the 16th International Kidney Cancer Symposium. On November 3, 2017 AVEO presented results from the Phase 1 portion of the Phase 1/2 TiNivo study at the 16th International Kidney Cancer Symposium. The oral presentation, titled “TiNivo: A Phase 1b Dose Escalation Trial of Tivozanib and Nivolumab in Renal Cell Carcinoma,” was given by Laurence Albiges, M.D., Ph.D., Head, Genitourinary Unit, Institute Gustave Roussy, and a lead investigator of the study. The TiNivo trial is a Phase 1/2 multicenter trial of tivozanib (FOTIVDA®) in combination with Bristol-Myers Squibb’s nivolumab (OPDIVO®), an immune checkpoint, or PD-1, inhibitor, for the treatment of advanced renal cell carcinoma. The ongoing Phase 1 portion of the trial enrolled six patients, and demonstrated that the combination of tivozanib and nivolumab was well tolerated to the full dose and schedule of single agent tivozanib, with no dose limiting toxicities. The results also demonstrated promising early signs of potential efficacy, with 67% of patients demonstrating a partial response (PR), and a 100% disease control rate (PR + stable disease). Five out of six patients remain on study therapy. Enrollment of approximately 20 patients in the Phase 2 portion is ongoing. The trial is being led by the Institut Gustave Roussy in Paris under the direction of Bernard Escudier, MD, Chairman of the Genitourinary Oncology Committee.
  • TiNivo Combination Study Opt-in. In September 2017, AVEO announced that EUSA Pharma, under its multi-territory licensing agreement with AVEO for tivozanib (FOTIVDA®), opted in to co-develop the Phase 1/2 TiNivo study and potential future combination studies in exchange for a research and development reimbursement payment totaling $2.0 million. Under terms of the agreement, EUSA will fund up to half of the Phase 1/2 TiNivo study, not to exceed $2.0 million, and may utilize data from study for regulatory or commercial purposes.
  • Receipt of Payments from EUSA Pharma and CANbridge. In September 2017, AVEOannounced the receipt of a $4.0 million research and development reimbursement payment from EUSA Pharma related to the approval of tivozanib (FOTIVDA®) for the treatment of adult patients with advanced RCC in Europe, and a $0.5 million milestone payment from CANbridge related to manufacturing development activities for AV-203, AVEO’s clinical-stage ErbB3 (HER3) inhibitory antibody candidate.

Third Quarter 2017 Financial Highlights

  • AVEO ended Q3 2017 with $37.4 million in cash, cash equivalents and marketable securities as compared with $23.3 million at December 31, 2016.
  • Total collaboration revenue was approximately $4.6 million in Q3 2017 compared with $1.0 million for Q3 2016.
  • Research and development expense was $4.7 million in Q3 2017 compared with $4.4 million for Q3 2016.
  • General and administrative expense was $2.1 million in Q3 2017 compared with $2.1 million for Q3 2016.
  • Net loss for Q3 2017 was $26.4 million, or a loss of $0.22 per basic and diluted share, compared with a net loss of $5.0 million, or a loss of $0.07 per basic and diluted share for Q3 2016. Approximately $23.5 million of the net loss was a non-cash loss attributable to the increase in the fair value of the warrant liability that was recorded in Q3 2017 that principally resulted from the increase in the stock price that occurred within the quarter. In Q3 2016, the non-cash gain attributable to fair value of the warrant liability was $1.2 million.

Updated Financial Guidance

We believe that our $37.4 million in cash resources would allow us to fund our planned operations into the fourth quarter of 2018. This estimate assumes no receipt of additional milestone or royalty payments from our partners or related payment of potential licensing milestones to third parties, no additional funding from new partnership agreements, no additional equity financings, no debt financings and no further sales of equity under our Sales Agreement with FBR or through the exercise of our outstanding PIPE Warrants. This estimate also assumes no acceleration in repayment of the term loan by Hercules in the event of non-compliance with the $10.0 million financial covenant.

Shares of AVEO Pharmaceuticals closed yesterday at $2.94, down $0.27 or -8.41%. AVEO has a 1-year high of $4.24 and a 1-year low of $0.50. The stock’s 50-day moving average is $3.42 and its 200-day moving average is $2.32.

On the ratings front, AVEO stock has been the subject of a number of recent research reports. In a report issued on October 6, Seaport Global analyst Vernon Bernardino initiated coverage with a Buy rating on AVEO and a price target of $7.00, which represents a potential upside of 138% from where the stock is currently trading. On October 5, Piper Jaffray’s Edward Tenthoff reiterated a Buy rating on the stock and has a price target of $5.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Vernon Bernardino and Edward Tenthoff have a yearly average return of 2.3% and 7.7% respectively. Bernardino has a success rate of 30% and is ranked #1937 out of 4703 analysts, while Tenthoff has a success rate of 45% and is ranked #700.

AVEO Pharmaceuticals operates as a biopharmaceutical company, which engages in the advancement of therapeutics for oncology and other areas of unmet medical need. Its products include Tivozanib, Ficlatuzmab, AV-203, AV-380, and AV-353. It focuses on the development of its lead candidate, Tivozanib, in North America as a treatment for renal cell carcinoma and other cancers.