Executives of Cambridge, MA-based Aveo Oncology today further defended their decision to cut the majority of their company’s rank and file, while largely pinning the biotech’s hopes on two key clinical trials that should wrap up by the end of 2014.
“This is an incredibly sad day for Aveo,” president and CEO Tuan Ha-Ngoc said on a conference call with analysts that came less than 24 hours after Aveo announced plans to slash 140 jobs—62 percent of its workforce—to save $190 million. “But we need to move the company forward…unfortunately, downsizing is a necessary part of this process,” he said.
Chief financial officer David Johnston said that the savings would be equally spread out over the next eight financial quarters, and that the job cuts impact “virtually every organization within the company.” Jobs within Aveo’s commercial and pre-commercial organization are being cut, for example, as are those related to some of the clinical trials Aveo is winding down, Johnston said.
Those changes largely aren’t coming at the executive level, however. Though Elan Ezickson, Aveo’s COO, is resigning on July 31—something Aveo said Tuesday was unrelated to the restructuring— when an analyst asked whether any other executive changes would be made, Ha-Ngoc responded: “We have reviewed the management team and we believe that the existing management team should be in place to execute the strategy going forward.”
Aveo executives focused most of the conversation on the two mid-stage studies it has going for tivozanib: a 252-patient study of patients with colorectal cancer, and a 147-patient clinical trial of patients with triple-negative breast cancer. Aveo sees the two studies—the costs of which are being split 50/50 between Aveo and development partner Astellas Pharma—as its most significant value drivers, and has hoarded a two-year cash runway through the restructuring to get to those data readouts. Aveo expects data from both of those trials by the end of 2014.
Ha-Ngoc said that Aveo’s plan is to design further studies for tivozanib and its other cancer drugs for “clearly defined patient populations where there are limited treatment options available today.”
William Slichenmyer, Aveo’s chief medical officer said that Aveo is looking for biomarker-defined patient subgroups in its two ongoing mid-stage clinical trials for tivozanib.
“We do intend to look for subgroups where [tivozanib’s] activity stands out,” he said.
Aveo also pointed to a cancer drug known as AV-203 that targets the HER-3, or ErbB3 receptor. The drug is in an early-stage clinical trial that Aveo expects results from in 2014. Biogen has the option to international rights to the drug, should it pass the proof-of-concept stage.
An FDA advisory panel on May 2 voted 13 to 1 that Aveo should run an additional late-stage trial before it could win regulatory approval of tivozanib to treat patients with kidney cancer, making it all but certain that the FDA would reject the drug when it completes its review in July. The panel, and the FDA’s oncology chief, Richard Pazdur, blasted Aveo for its trial design in the process. The company’s stock (NASDAQ: [[ticker:AVEO]]) has tanked ever since, and traded at $2.44 per share as of 9:56 ET. Shares traded at over $8 per share before the panel.
