Foundering Aveo strikes a small deal to resurrect its thrice-failed drug

Aveo CEO Tuan Ha-Ngoc

With former collaborator Astellas Pharma long since out the door, Aveo Oncology ($AVEO) has found another partner willing to take a shot on the troubled tivozanib, signing a modest deal with Ophthotech ($OPHT) to see how the cancer drug fares in eye diseases.

Under the deal, Ophthotech will hand over just $500,000 up front for the right to investigate tivozanib, a VEGF inhibitor, in some undisclosed ocular ailments. Aveo is in line for up to $8 million in milestones during the option period, and, if Ophthotech chooses to fully buy into the program, the biotech will recoup a $2 million fee and stand to gain up to $95 million in developmental and commercial rewards.

The agreement, however small, is still a net positive for Aveo, which has plunged into penny stock territory after repeated setbacks for tivozanib, its lead asset. Last summer, the FDA shot down Aveo's hoped-for approval in renal cell carcinoma, calling its pivotal data "uninterpretable" and leading the biotech to lay off more than half of its staff. Months later, Astellas and Aveo revealed that tivozanib was unlikely to meet its primary endpoint in a study on colorectal cancer, and, earlier this year, the two shut down a Phase II breast cancer study over enrollment problems, shutting the door on the drug's future in oncology and sending Astellas packing by February.

But it's a new day in ocular disease, according to Aveo CEO Tuan Ha-Ngoc. Among the world's top-selling eye drugs are VEGF inhibitors like Regeneron's ($REGN) Eylea and Roche's ($RHHBY) Avastin, and Ophthotech, with its pedigree of ocular R&D, is a natural partner to figure out whether tivozanib has a future in the space, he said.

"We believe the unique properties of tivozanib make it an ideal VEGF inhibitor for potential ocular use, and we are encouraged by Ophthotech's interest in exploring this potential," Ha-Ngoc said in a statement. "This agreement could enable us to realize value for tivozanib in an indication outside of cancer, while retaining oncology rights for further development through additional potential partnerships."

Ophotech's interest marks just about the only good news for Aveo in 2014. After Astellas abandoned its top prospect, the biotech watched 5-year partner Biogen Idec ($BIIB) walk away from AV-203, an ErbB3-targeting antibody, which now joins a long list of treatments for which Aveo is "actively seeking collaboration opportunities," according to its annual report. Aveo's pipeline now consists of AV-380, a preclinical treatment for cancer-related weight loss, and ficlatuzumab, a drug that missed a key endpoint in a 2012 trial in non-small cell lung cancer.

- read the statement

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