January 7, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Cambridge, Mass.-based AVEO Oncology announced today major corporate restructuring and executive transitions. Michael Bailey has been appointed AVEO’s president and chief executive, as well as director. He is currently chief business officer. He replaces Tuan Ha-Ngoc, who will take the chairman of the board position. The current chairman, Henri Termeer, will become lead outside director.
In terms of major corporate restructuring, the company will eliminate its internal research function in addition to specific corporate support positions. These changes are designed to align company resources with future strategic plans and focus on its clinical pipeline.
As part of the restructuring, Jeno Gyuris, chief scientific officer, will leave the company. About two thirds of the company’s workforce, about 40 positions, will be cut. Twenty full-time positions will remain. The company expects the restructuring to be completed by Jan. 15.
“Since its founding, AVEO has benefited significantly from research, making the decision to eliminate this function particularly difficult,” said Bailey in a statement. “With our current pipeline, including AV-380, now past the research stage, it is critical that we focus on streamlining operations by aligning our current resources with our current needs. This change provides us with an opportunity to evaluate biomarker-driven clinical strategies and partnerships to advance our pipeline without continuing to incur internal research expense.”
In late December AVEO received warning that its stock price was too low to continue to be listed on the Nasdaq Global Market. A Nasdaq rule requires that a company’s stock price cannot sell for less than $1 for 30 consecutive days. They were automatically granted a 180-day period, ending June 29, 2015, in which it can appeal for another 180-day grace period.
It will need to get its stock above $1 for 10 consecutive days. If it doesn’t do so, it would be shifted to the Nasdaq Capital Market. It is currently selling at $0.82 per share.
The company has struggled since May 2013, when the U.S. Food and Drug Administration voted against approval of its first drug, tivozanib, a treatment for kidney cancer. In Nov. 2014 AVEO announced it had entered into a R&D option agreement with Ophthotech Corporation to investigate the drug’s potential for the potential treatment of non-cancer diseases of the eye.
AV-380, a first-in-class GDF-15 inhibitor, was discovered using AVEO’s proprietary Human Response Platform. Initial plans are to evaluate the drug for the treatment of cancer cachexia, with possible treatments for chronic kidney disease, congestive heart failure and chronic obstructive pulmonary disease.
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