AVEO Reports Second Quarter 2013 Financial Results

  AVEO Reports Second Quarter 2013 Financial Results

Business Wire

CAMBRIDGE, Mass. -- August 8, 2013

AVEO Oncology (NASDAQ: AVEO) today reported second quarter 2013 financial
results.

“We are moving forward as an organization and are firmly focused on executing
our revised business strategy,” said Tuan Ha-Ngoc, president and chief
executive officer of AVEO. “We continue to advance our programs in clinical
development, including tivozanib in colorectal and breast cancer, which are
currently in Phase 2 studies. Additionally, we are moving forward with AV-203,
our ERBB3 inhibitory antibody candidate, which is currently in Phase 1
development. While the recent setback related to the tivozanib Complete
Response Letter and the company’s strategic restructuring was challenging, we
remain confident about the company’s future prospects and we will continue to
work toward our goal of bringing clinically meaningful treatments to patients
with cancer.”

Second Quarter 2013 Financial Results

  *Total collaboration revenue for the second quarter of 2013 was
    approximately $0.3 million compared with $1.9 million for the second
    quarter of 2012. The decrease was due to revenue recognized during the
    second quarter of 2012 related to milestones achieved under our
    collaboration agreement with OSI, as well as research funding under our
    collaboration agreement with Centocor, that did not recur during the
    second quarter of 2013. Revenue during the second quarter of 2013 was
    related to amortization of amounts previously deferred related to our
    collaboration agreements with Biogen and Astellas.
  *Research and development (R&D) expense for the second quarter of 2013 was
    $16.2 million compared with $21.5 million for the second quarter of 2012.
    The decrease in R&D expense was primarily due to a decrease in
    personnel-related expenses following our strategic restructuring announced
    in October 2012, as well as a decrease in clinical trial costs due to a
    decrease in the number of active patients enrolled in our ficlatuzumab and
    tivozanib studies.
  *General and administrative (G&A) expense for the second quarter of 2013
    was $7.3 million compared with $9.2 million for the second quarter of
    2012. The decrease in G&A expense was primarily due to the reversal of
    stock-based compensation expense for certain awards that are no longer
    probable of vesting and a decrease in personnel-related expenses related
    to our strategic restructuring announced on June 4, 2013.
  *Restructuring expense for the three months ended June 30, 2013 was $7.9
    million, with no corresponding expense for the three months ending June
    30, 2012. The restructuring expense primarily consisted of employee
    severance and related benefits incurred in connection with our strategic
    restructuring announced on June 4, 2013, extending the company’s cash
    runway beyond certain potential clinical milestones.
  *Net loss for the second quarter of 2013 was $31.9 million, or basic and
    diluted net loss per share of $0.62, compared with a net loss of $29.5
    million, or basic and diluted net loss per share of $0.68 for the second
    quarter of 2012.
  *AVEO ended the second quarter of 2013 with cash, cash equivalents and
    marketable securities of $156.2 million.

Financial Guidance

Based on current operating plans, AVEO expects to end 2013 with approximately
$115 million in cash, cash equivalents and marketable securities, and expects
that its current cash, cash equivalents and marketable securities are
sufficient to fund operations through at least the second quarter of 2015.

Key Recent Development

  *Announced Strategic Restructuring: In connection with the receipt of a
    Complete Response Letter from the U.S. Food and Drug Administration (FDA)
    on June 10, 2013 informing us that the FDA will not approve in its present
    form our New Drug Application for tivozanib, our lead product candidate,
    for the treatment of patients with advanced renal cell carcinoma (RCC) and
    our subsequent decision not to pursue tivozanib development in RCC, we
    recently announced a strategic restructuring, pursuant to which we are
    eliminating approximately 140 positions across the organization. This
    strategic restructuring will refocus our efforts on the on-going clinical
    development of tivozanib in colorectal and breast cancer and on the
    advancement of other key pipeline and preclinical assets.

Upcoming Investor Conference

AVEO expects to present at the following investor conference:

  *Canaccord Genuity 33rd Annual Growth Conference, August 14-15, 2013 in
    Boston

About AVEO

AVEO Oncology (NASDAQ: AVEO) is a cancer therapeutics company committed to
discovering, developing and commercializing targeted therapies to impact
patients’ lives. AVEO’s proprietary Human Response Platform^TM provides the
company unique insights into cancer biology and is being leveraged in the
discovery and clinical development of its cancer therapeutics. For more
information, please visit the company’s website at www.aveooncology.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements of AVEO within the
meaning of The Private Securities Litigation Reform Act of 1995 that involve
substantial risks and uncertainties. All statements, other than statements of
historical facts, contained in this press release are forward-looking
statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,”
“may,” “plan,” “target,” “potential,” “could,” “should,” “seek,” or the
negative of these terms or other similar expressions, are intended to identify
forward-looking statements, although not all forward-looking statements
contain these identifying words. These forward-looking statements include,
among others, statements about: AVEO’s estimates for its 2013 year-end cash
balance and its estimate with respect to the availability of cash to fund its
operating plans through at least the second quarter of 2015; AVEO’s plans
regarding its strategic restructurings; AVEO’s plans to advance its clinical
development programs; and AVEO’s plans to leverage its Human Response
Platform. Actual results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking statements that
AVEO makes due to a number of important factors, including risks relating to:
AVEO’s ability to accomplish its strategic restructurings, execute on its
revised business plan and manage the impact of unplanned operating expenses;
AVEO’s ability to successfully enroll and complete clinical trials and
preclinical studies of its product candidates; AVEO’s ability to demonstrate
to the satisfaction of the FDA, or equivalent foreign regulatory agencies, the
safety, efficacy and clinically meaningful benefit of its product candidates;
AVEO’s ability to achieve and maintain compliance with all regulatory
requirements applicable to its product candidates; AVEO’s ability to obtain
and maintain adequate protection for intellectual property rights relating to
its product candidates and technologies; developments and expenses related to
AVEO’s ongoing shareholder litigation and SEC inquiry; AVEO’s ability to raise
the substantial additional funds required to achieve its goals; adverse
general economic and industry conditions; competitive factors; AVEO’s ability
to maintain its strategic partnerships and relationships, including its
collaboration with Astellas; and those risks discussed in the section titled
“Risk Factors” included in AVEO’s most recent Quarterly Report on Form 10-Q
and in its other filings with the SEC. The forward-looking statements in this
press release represent AVEO’s views as of the date of this press release.
AVEO anticipates that subsequent events and developments will cause its views
to change. However, while AVEO may elect to update these forward-looking
statements at some point in the future, it specifically disclaims any
obligation to do so. You should, therefore, not rely on these forward-looking
statements as representing AVEO’s views as of any date subsequent to the date
of this press release.

AVEO Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
                                                             
                       For the Three Months              For the Six Months
                       Ended June 30,                    Ended June 30,
                                                                         
                       2013            2012              2013            2012
Collaboration          $ 324           $ 1,877           $ 647           $ 2,737
revenue
                                                                         
Operating
expenses:
Research and             16,203          21,450            37,165          46,226
development
General and              7,324           9,186             19,773          18,169
administrative
Restructuring           7,869         -               7,936         -       
                         31,396          30,636            64,874          64,395
                                                                         
Loss from                (31,072 )       (28,759 )         (64,227 )       (61,658 )
operations
                                                                         
Other income
and expense:
Other income             (51     )       (66     )         (152    )       233
(expense), net
Interest                 (825    )       (880    )         (1,695  )       (1,725  )
expense
Interest                35            159             76            358     
income
Other expense,           (841    )       (787    )         (1,771  )       (1,134  )
net
                                                                         
Net loss                (31,913 )     $ (29,546 )        (65,998 )     $ (62,792 )
                                                                         
Net loss per
share - basic          $ (0.62   )     $ (0.68   )       $ (1.31   )     $ (1.45   )
and diluted
                                                                         
Weighted
average number
of common               51,312        43,322          50,351        43,288  
shares
outstanding
                                                                                   

AVEO Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except par value amounts)
(Unaudited)
                                                          
                                                  June 30,        December 31,
                                                  2013            2012
                                                                  
Assets
Cash, cash equivalents and marketable             $ 156,170       $   160,602
securities
Accounts receivable                                 7,897             20,649
Prepaid expenses and other current assets           9,217             9,430
Property and equipment, net                         13,238            12,867
Other assets                                       3,888            3,921
                                                                  
Total assets                                      $ 190,410       $   207,469
                                                                  
Liabilities and stockholders’ equity
Accounts payable and accrued expenses             $ 21,544        $   30,171
Total loans payable                                 23,893            26,037
Total deferred revenue                              19,038            19,685
Total deferred rent                                 15,791            11,400
Other liabilities                                   1,238             1,238
Stockholder's equity                               108,906          118,938
                                                                  
Total liabilities and stockholders’               $ 190,410       $   207,469
equity

Contact:

AVEO Oncology
David Johnston, 617-299-5810
or
Pure Communications
Kristie Wallis, 336-774-8666