Aveo Oncology said today it will cut 17% of its workforce or 45 employees, eliminate 30 additional open positions and reduce research spending. The company said the cutbacks were designed to reduce expenses as well as position the company for a successful launch of its late-stage cancer drug tivozanib for renal cell carcinoma (RCC).
“Aveo’s primary focus is on the approval and successful commercialization of tivozanib, which will drive the near-term future of the company and will be our greatest opportunity for value creation,” Tuan Ha-Ngoc, the company’s president and CEO, said in a statement. “We believe the cost savings resulting from the reduction in the scope of the R&D activities and associated resources outside of tivozanib position us well to successfully execute the planned launch of tivozanib, as well as make progress toward our goal of becoming a fully integrated oncology company.”
To that end, he said, Aveo will explore further development of the anticancer monoclonal antibody ficlatuzumab and other undisclosed drug candidates through external collaborations, “including with academic partnerships and cooperative groups,” while internal research will focus on advancing tivozanib.
Aveo said it expected to save $100 million over three years as a result of the cutbacks, disclosed along with its third-quarter 2012 results. The company’s net loss widened during Q3, to $30.1 million, or a 69-cent loss per share, compared with $23.8 million or a 55-cent loss per share for the year-ago quarter.
The company blamed the losses on reduced collaboration revenues—to $1 million from $3.6 million in Q3 2011, when an agreement with OSI was in effect—as well as a $1 million increase in R&D spending reflecting higher personnel costs and facility costs related to Aveo’s future headquarters, partially offset by a decrease in clinical trial costs.
Aveo is struggling to overcome weak overall survival data for tivozanib that failed to show improvement over Nexavar, as well as a resulting stock downgrade by Leerink Swann. In its defense, Aveo cites the results of the Phase III TIVO-1 (TIvozanib Versus sOrafenib in 1st line advanced RCC) trial, which showed statistically significant improvement in progression-free survival versus sorafenib, and a favorable tolerability profile—arguments it hopes will persuade FDA to approve its recently-submitted NDA.
In addition to recently presenting TIVO-1 data at the European Society for Medical Oncology (ESMO) 2012 Congress, Aveo is preparing for its launch of tivozanib by appointing Brad Bailey to the newly created position of vice president, sales. Bailey previously served as senior director of UCB Biopharma’s immunology business unit and directed that company's national sales organization in the marketing of Cimzia® for rheumatoid arthritis and Crohn's disease.