AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is wrapping up the refinancing of its existing debt facility with Hercules and affiliates: one with a $20 million tag. The terms of the refinancing will provide a roughly $12.1 million in cash flow over the course of this year and next when against the previous loan, and the AVEO corporate team is rejoicing that this will extend the runway into 2019.
The new $20.0 million facility has a 42-month maturity from closing, no financial covenants, a lower interest rate and an interest-only period of no less than 12 months, which could be extended up to a maximum of 24 months, assuming the achievement of specified milestones relating to the development of tivozanib. Proceeds of the new facility will be used to retire the Company’s existing $20.0 million of secured debt with Hercules.
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“We estimate that the extension of the interest-only period related to the restructuring of our debt facility with Hercules would extend our cash runway into 2019,” said Michael Bailey, president and chief executive officer of AVEO. “We continue to look forward to several potential key developments, including the receipt of top-line results from the TIVO-3 trial of tivozanib in third-line refractory renal cell carcinoma and, if positive, the filing of a new drug application with the FDA seeking marketing approval of tivozanib in the United States. In addition, during this time we also expect to report the phase 2 portion of the TiNivo combination trial with nivolumab.”
Additional details with respect to this financing are available in the Company’s Current Report on Form 8-K filed on January 2, 2018 with the Securities and Exchange Commission.
Shares of AVEO Pharmaceuticals closed today at $2.74, down $0.05 or -1.79%. 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 $2.95 and its 200-day moving average is $2.96.
On the ratings front, AVEO Pharmaceuticals has been the subject of a number of recent research reports. In a report issued on December 7, B.Riley FBR analyst Madhu Kumar reiterated a Buy rating on AVEO, with a price target of $5, which represents a potential upside of 78% from where the stock is currently trading. Separately, on October 6, Seaport Global’s Vernon Bernardino initiated coverage with a Buy rating on the stock and has a price target of $7.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Madhu Kumar and Vernon Bernardino have a yearly average return of 33.0% and a loss of -8.5% respectively. Kumar has a success rate of 65% and is ranked #196 out of 4727 analysts, while Bernardino has a success rate of 26% and is ranked #4645.
AVEO Pharmaceuticals, Inc. is 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 Tivozanib, in North America as a treatment for renal cell carcinoma.