AVEO Oncology Reports Full Year 2013 Financial Results and Outlines 2014 Strategic Plan

  AVEO Oncology Reports Full Year 2013 Financial Results and Outlines 2014
  Strategic Plan

                  - Company ends 2013 with $118M in cash^1 -

          - Focuses internal R&D investment on AV-380 in cachexia -

  - Intends to advance clinical-stage assets through strategic partnering –

Business Wire

CAMBRIDGE, Mass. -- March 13, 2014

AVEO Oncology (NASDAQ: AVEO) today reported consolidated 2013 financial
results and outlined its 2014 strategic plan and financial guidance.

“With the cost-containment measures implemented in the second half of 2013,
AVEO ended the year in a strong financial position,” said Tuan Ha-Ngoc,
president and chief executive officer of AVEO. “Our strategy going forward
will focus on driving growth by investing in the continued advancement of our
AV-380 program in cachexia and pursuing further development of our
clinical-stage assets through collaborations. In addition, we will continue to
evaluate opportunities to acquire or in-license compounds that will further
accelerate value creation.”

Cachexia is a serious and common syndrome in patients with advanced cancer and
other chronic diseases, characterized by symptoms of unintentional weight
loss, progressive muscle wasting and loss of appetite (anorexia). Cachexia is
associated with increased mortality and 50% of patients with cancer die with
cachexia present.

Development Programs Update

  *AV-203 – AVEO successfully completed a Phase 1 safety study showing no
    dose limiting toxicities at maximum dose of 20mg/kg and Clinical
    Laboratory Improvements Amendment (CLIA) validation has been completed for
    a biomarker for potential patient selection. Results from this study are
    expected to be presented at a scientific meeting in 2014.

    AVEO will seek a partner to support further clinical development of
    AV-203, subject to regaining certain rights from Biogen Idec, who
    currently has the option to develop AV-203 in territories outside of the
    U.S. The single agent expansion cohort in a biomarker-positive patient
    population has been terminated pending a development partnership
    agreement.

  *Ficlatuzumab – In 2013, an exploratory analysis using a serum-based
    molecular diagnostic test identified a patient sub-population that
    experienced a statistically significant progression-free survival and
    overall survival benefit on the combination therapy in the Phase 2 trial
    of ficlatuzumab in combination with gefitinib compared to gefitinib
    monotherapy in first line non-small cell lung cancer. These results are
    expected to be presented at a scientific meeting later in 2014. AVEO is
    actively seeking collaboration opportunities to support the clinical
    development of ficlatuzumab in this patient group with the goal of
    initiating a confirmatory Phase 2 study.
  *Tivozanib – On February 14, 2014, AVEO and Astellas announced their
    decision to terminate their collaboration for the development and
    commercialization of tivozanib. Costs for ongoing tivozanib-related
    expenses will be shared by the parties. AVEO estimates that AVEO’s share
    of costs for these activities will be approximately $12 million in 2014.
    Based on the terms of the agreement, all rights for tivozanib will revert
    to AVEO in August 2014, six months after Astellas notified AVEO of its
    intention to terminate the agreement. AVEO plans to explore potential
    partnership opportunities for the further clinical development of
    tivozanib.
  *AV-380 (GDF-15 Program) - AV-380, a potential first-in-class GDF-15
    inhibitor, was discovered using AVEO’s proprietary Human Response
    Platform™, that provides the company unique insights into cancer and
    related disease biology. The clinical program will be designed to obtain
    rapid proof of clinical activity with first-in-human clinical trials
    planned for the second half of 2015. Initial clinical development is
    expected to be for the treatment of cancer cachexia. AVEO plans to
    evaluate opportunities for partnerships to expand the development of
    AV-380 for the treatment of cachexia associated with other indications
    such as chronic kidney disease, congestive heart failure and chronic
    obstructive pulmonary disease.

Full Year 2013 Financial Results

  *AVEO ended 2013 with cash, cash equivalents and marketable securities of
    $118.5 million.
  *Total collaboration revenue for 2013 was approximately $1.3 million
    compared with $19.3 million for 2012. The decrease was primarily due to
    revenue recognized during 2012 that did not recur during 2013, including a
    $15.0 million milestone payment earned under AVEO’s collaboration
    agreement with Astellas related to the FDA’s acceptance of the NDA filing
    for tivozanib and revenue earned under AVEO’s agreements with OSI
    Pharmaceuticals, Inc. and Centocor Ortho Biotech Inc. Revenue recognized
    during 2013 consisted of the amortization of previously deferred amounts
    related to AVEO’s collaboration agreements with Biogen Idec International
    GmbH and Astellas.
  *Research and development (R&D) expense for 2013 was $68.5 million compared
    with $91.4 million for 2012. The decrease in R&D expense was primarily due
    to a reduction in personnel-related expenses following the strategic
    restructurings announced in October 2012 and June 2013, and a decrease in
    clinical trial and regulatory costs for tivozanib and ficlatuzumab, offset
    by additional development costs for ficlatuzumab relating to the
    manufacture of clinical material and by additional facilities costs due to
    additional leased space at 650 East Kendall Street.
  *General and administrative (G&A) expense for 2013 was $28.7 million
    compared with $36.9 million for 2012. The decrease in G&A expense was
    primarily due to a reduction in personnel-related expenses following our
    strategic restructuring announced in June 2013 and a reduction in
    pre-commercialization costs associated with tivozanib.
  *Restructuring expense for 2013 was $8.0 million compared with $2.6 million
    for 2012. The increase is primarily the result of the additional costs
    incurred in connection with our June 2013 strategic restructuring.
  *Net loss for 2013 was $107.0 million, or basic and diluted net loss per
    share of $2.10, compared with net loss of $114.4 million, or basic and
    diluted net loss per share of $2.64 for 2012.

2014 Financial Guidance

Based on current operating plans, AVEO expects to end 2014 with approximately
$50-$55 million in cash, cash equivalents and marketable securities.

Organizational Update

AVEO announced that William Slichenmyer, M.D., Sc.M., chief medical officer,
will be leaving AVEO after a two-month transition period. AVEO will be seeking
a senior clinical advisor while it undertakes a search for a permanent
full-time CMO.

“I would like to thank Bill for his service and commitment to AVEO,” said Mr.
Ha-Ngoc. “His unwavering dedication to patients has guided and inspired our
efforts in AVEO’s clinical programs. We wish him well in his future
endeavors.”

Today’s Conference Call and Webcast Reminder

The AVEO management team will host a conference call at 4:30 pm (ET) today.
The call can be accessed by dialing 1-866-318-8613 (domestic) or
1-617-399-5132 (international) five minutes prior to the start of the call and
providing the passcode 57921892. A replay of the call will be available two
hours after the completion of the call and can be accessed by dialing
1-888-286-8010 (domestic) or 1-617-801-6888 (international), providing the
passcode 61612931. The replay will be available for two weeks from the date of
the live call.

The live webcast of the conference call can be accessed by visiting the
investors section of the AVEO website at investor.aveooncology.com. A replay
of the webcast will be archived on the AVEO website for two weeks following
the call.

About AVEO

AVEO Oncology (NASDAQ: AVEO) is a biopharmaceutical company committed to
discovering and developing targeted therapies designed to provide substantial
impact in the lives of people with cancer by addressing unmet medical needs.
AVEO’s proprietary Human Response Platform provides the company unique
insights into cancer and related disease biology and is being leveraged in the
discovery and clinical development of its therapeutic candidates. 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 advancement of its business strategy,
including entering into new strategic partnerships, collaboration
opportunities; AVEO’s plans to initiate further studies of AV-203,
ficlatuzumab and AV-380 for the treatment of cachexia and the advancement of
AVEO’s pipeline assets; its estimated costs for the wind-down of the tivozanib
studies; the presentation of study results at scientific meetings; AVEO’s
plans to expand the development of AV-380 for cachexia; AVEO’s estimates for
its 2014 year-end cash balance; 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 execute on its business strategy and enter into and
maintain new strategic partnerships and collaboration agreements; 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; and those risks
discussed in the section titled “Risk Factors” included in AVEO’s Annual
Report on Form 10-K filed with the SEC on March 13, 2014 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.

^1 Includes cash, cash equivalents and marketable securities.

AVEO Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
                                               
                     For the Three Months          For the Years
                     Ended December 31,            Ended December 31,
                     2013         2012            2013          2012
Collaboration        $ 323         $ 15,531        $ 1,293        $ 19,286
revenue
                                                                  
Operating
expenses:
Research and           11,889        24,033          68,468         91,358
development
General and            4,499         9,463           28,712         36,932
administrative
Restructuring         4           2,633         8,017        2,633    
                       16,392        36,129          105,197        130,923
                                                                  
Loss from              (16,069 )     (20,598 )       (103,904 )     (111,637 )
operations
                                                                  
Other income and
expense:
Other (expense)        (3      )     (32     )       (123     )     247
income, net
Interest expense       (676    )     (888    )       (3,127   )     (3,501   )
Interest income       23          38            125          497      
Other expense, net     (656    )     (882    )       (3,125   )     (2,757   )
                                                                  
Net loss             $ (16,725 )   $ (21,480 )     $ (107,029 )   $ (114,394 )
                                                                  
Basic net loss per
share
Net loss             $ (0.32   )   $ (0.49   )     $ (2.10    )   $ (2.64    )
Weighted average
number of common      51,546      43,486        50,928       43,374   
shares outstanding
                                                                  
Diluted net loss
per share
Net loss             $ (0.32   )   $ (0.49   )     $ (2.10    )   $ (2.64    )
Weighted average
number of common
shares and
dilutive              51,546      43,486        50,928       43,374   
common share
equivalents
outstanding

AVEO Pharmaceuticals, Inc.

Consolidated Balance Sheet Data
(In thousands)
(Unaudited)
                                                               
                                                   December 31,   December 31,
                                                   2013           2012
                                                                  
Assets
Cash, cash equivalents and marketable securities   $   118,506    $   160,602
Accounts receivable                                    984            20,649
Prepaid expenses and other current assets              9,429          9,430
Property and equipment, net                            14,140         12,867
Other assets                                          3,287         3,921
                                                                  
Total assets                                       $   146,346    $   207,469
                                                                  
Liabilities and stockholders’ equity
Accounts payable and accrued expenses              $   17,501     $   30,171
Total loans payable                                    19,205         26,037
Total deferred revenue                                 18,392         19,685
Total deferred rent                                    20,072         11,400
Other liabilities                                      1,238          1,238
Stockholder's equity                                  69,938        118,938
                                                                  
Total liabilities and stockholders’ equity         $   146,346    $   207,469

Contact:

Investor Contact:
AVEO Oncology Investor Relations
617-299-5810
or
Media Contact:
Pure Communications
Caton Morris, 910-232-7166
 
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