Novartis dumps Aveo drug as relationship sours

Novartis headquarters
Novartis committed to pay up to $311 million in clinical, regulatory and commercial milestones to seal the deal in 2015. (Wikimedia Commons/Andrew/Flickr)

Novartis has walked away from Aveo Pharmaceuticals’ AV-380 three years after paying $15 million (€13 million) upfront for the asset. The action cuts short a relationship that was starting to sour amid the slow progress of the treatment for severe, cancer-related weight loss. 

The fate of AV-380 changed quickly late last week. On Thursday, Aveo, frustrated by the slow progress of AV-380, sent Novartis a notice disputing the Swiss pharma’s compliance with the obligations set out in the 2015 agreement. The next day, Novartis told Aveo it is terminating the pact in 60 days and handing back the worldwide rights to AV-380.

That action will free Novartis from its ongoing obligations related to AV-380 but Aveo still plans to hold it to account for its earlier actions, or lack thereof. Having sent Novartis the notice last week, Aveo is now gearing up to talk to management at its former partner. If those talks fail to resolve the dispute, the case could go to arbitration.


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Aveo thinks the slow progress of AV-380 and Novartis’ decision to dump the drug both stem from turnover at the top of company.   

“The previously disclosed development delays, and ultimately the Novartis decision not to pursue further development, is the result of changes in management and strategic priorities within Novartis,” Aveo wrote in a regulatory filing to disclose the news.

Losing the Novartis deal cuts Aveo off from a possible source of income. Novartis committed to pay up to $311 million in clinical, regulatory and commercial milestones to seal the deal in 2015. But the lack of progress and ultimate termination of the deal means Aveo will never pocket those monies.

That is something of a negative for Aveo, shaving 3% off its share price in premarket trading. But the Novartis deal is a minor piece of the company’s prospects. The bigger event is the upcoming readout from a U.S. phase 3 registration trial of Aveo’s inhibitor of vascular endothelial growth factor 1, 2 and 3 receptors, tivozanib.  

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