AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)
Shares of AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) rallied by 14.81% in Friday’s trading session following positive news about the company’s cancer drug. Tivozanib, The company’s novel treatment for Renal Cell Carcinoma, is currently under consideration for approval by the European Commission.
Tivozanib Europe Approval
The fact that Renal Cell Carcinoma could be one of the fastest growing cancers in the world presents unique sales opportunities for the company. AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is a leading developer of targeted therapies for oncology and other unmet medical needs. Tivozanib is a potent selective inhibitor approved in North America for the treatment of renal cell carcinoma.
AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is also advancing its pipeline of novel therapeutic candidates targeting various types of cancer, cachexia, and pulmonary arterial hypertension. However, expanding the Tivozanib market remains the company’s primary objective.
The European Commission, while not obligated, should issue a decision about Tivozanib approval in about 50 days. Approval will allow AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) to market the drug in all the 28 countries in the trading block.
EUSA Pharma Agreement
The biopharmaceutical company has already signed an agreement EUSA Pharma to become its licensee in the region.
“If the European Commission grants marketing approval for Tivozanib, it would trigger a $4 million research and development reimbursement payment from EUSA, and AVEO will also be eligible for up to $12 million in additional milestones from EUSA based on member state reimbursement and regulatory approvals,” said CEO Michael Bailey.
EUSA Pharma is to pay AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) $394 million in research and development funding as part of a 2015 agreement. However, the payment is subject to certain milestones including regulatory approval in Europe, commercialization objectives, and royalty payments ranging from low double-digit up to mid-twenty percent on net sales of Tivozanib.
Funds from the EUSA agreement should go a long way to strengthening AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) balance sheet and is expected to provide some much-needed finance for a protected Phase 3 Trial of Tivozanib in the first quarter of 2018. The company’s balance sheet has also received a $14 million boost through a credit facility from Hercules Capital Inc. and the sale of common stock via issuance of sales agreement
AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) had a total of $33.4 million in cash and cash equivalent as of the end of the first quarter after posting a net loss of (-$8.8) million.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.