AVEO Oncology Terminates Cambridge Lease Agreement To Save $110 Million
September 26, 2014
By Mark Terry, BioSpace.com Breaking News Staff
AVEO Oncology announced Friday that it is terminating a lease agreement in Cambridge, Mass. that will cut its current lease obligations by $110 million and will adjust its debt financing facility with Hercules Technology Growth Capital (HTGC).
The Cambridge-based company has a lease agreement with BMR-650 E Kendall B LLC that was signed on May 9, 2012. AVEO is immediately leaving the unused parts of the premises and will vacate the remaining occupied parts of the premises within 12 months. In exchange, they will pay a termination fee of approximately $7.8 million over the next nine months.
AVEO has indicated that these deals do not change the company’s prior financial guidance in regards to existing cash, cash equivalents and marketable securities. They currently have enough funds to continue operating into the fourth quarter of 2015 and expect to have a 2014 year-end cash balance of between $50 and $55 million.
“Maximizing our financial strength and flexibility is a key component of AVEO’s overall strategy, and success in amending our debt facility gave us the ability to terminate our lease for unused office and research space as part of our continued efforts to reduce operating costs,” said Tuan Ha-Ngoc, president and CEO in a statement. “Together, these agreements simplify our capital commitments and provide greater operating flexibility. This allows us to continue to execute on our strategy, which is to focus our internal resources to advance AV-380 in cancer cachexia while leveraging partner resources to further the development of our pipeline.”
AVEO Oncology was founded on a proprietary drug discovery and development approach called the Human Response Platform. The approach uses genetic engineering techniques to grow populations of tumors in animals that contain human-relevant, cancer-causing mutations and tumor variation similar to what is observed in human tumors.
The company presented data in September at the European Society of Medical Oncology (ESMO) 2014 Congress in Madrid, Spain regarding its hepatocyte growth factor (HGF) inhibitory antibody, as well as tivozanib, AVEO’s inhibitor of vascular endothelial growth factor (VEGF) 1, 2, and 3 receptors. In 2014 AVEO entered into a worldwide agreement with Biodesix to develop and commercialize ficlatuzumab with a companion diagnostic test. The company also announced in its second quarter financial report that worldwide rights to tivozanib had been returned from Astellas Pharma Inc.
The two companies had been developing the compound for the treatment of renal cell carcinoma, colorectal cancer and breast cancer. AVEO is now pursuing other partnerships to advance the development of tivozanib. In addition, Phase 2 studies of tivozanib in colorectal cancer were discontinued after an interim analysis.