June 4 (Bloomberg) -- Aveo Pharmaceuticals Inc., which failed to win the backing of U.S. regulatory advisers last month for its experimental kidney cancer drug, said it will cut about 140 jobs in a restructuring to save $190 million in the next two years.
The job reductions are about 62 percent of Cambridge, Massachusetts-based Aveo’s workforce, the company said today in a statement. Elan Ezickson, the company’s chief operating officer, will leave Aveo at the end of July, and Michael Bailey, previously chief commercial officer, will become chief business officer reporting to Chief Executive Tuan Ha-Ngoc.
Panelists advising the U.S. Food and Drug Administration questioned whether Aveo’s drug, tivozanib, is as effective as existing treatments for renal cell carcinoma, voting 13-1 on May 2 that Aveo hadn’t demonstrated that the medicine’s benefits outweigh its risks. The company is developing the drug in a partnership with Tokyo-based Astellas Pharma Inc.
“We believe that it is likely that tivozanib will not receive FDA approval for renal cell carcinoma,” William J. Slichenmyer, Aveo’s chief medical officer, said in the statement. “With the decision of our partner, Astellas, not to proceed with a European filing for tivozanib or financially support future clinical trials in RCC, Aveo has no plans at this time to pursue tivozanib development in RCC.”
Aveo finished the first quarter with $192 million in cash and equivalents and said it has sufficient funds for at least two years. It will focus on tivozanib in breast and colon cancer as well as earlier-stage compounds.
Aveo gained 6 cents to $2.55 in extended trading at 4:50 p.m. New York time. Earlier, the shares fell 2.4 percent to $2.49 at the close in New York and have declined 69 percent this year.
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