AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) is a commercial-stage, oncology-focused biopharmaceutical company committed to delivering medicines that provide a better life for patients with cancer. The company currently markets FOTIVDA® (tivozanib) in the United States, which was approved by the U.S. Food and Drug Administration (FDA) in March 2021 for the treatment of adult patients with relapsed or refractory advanced renal cell carcinoma (RCC) following two or more prior systemic therapies.
Business Overview
AVEO is focused on the commercialization of FOTIVDA in the United States and the continued development of tivozanib in immuno-oncology combinations and other novel targeted combinations in RCC and other indications. The company also has a pipeline of four wholly owned IgG1 monoclonal antibody product candidates, including ficlatuzumab, AV-380, AV-203, and AV-353, which are in various stages of clinical development.FOTIVDA, an oral, next-generation vascular endothelial growth factor receptor (VEGFR) tyrosine kinase inhibitor (TKI), was approved based on the positive results from the pivotal Phase 3 TIVO-3 trial, which compared tivozanib to an approved therapy, Nexavar® (sorafenib), in RCC patients whose disease had relapsed or become refractory to two or more prior systemic therapies. The approval is also supported by three additional trials in RCC and includes safety data from over 1,000 clinical trial subjects.
Financials
For the full year 2022, AVEO reported annual net income of -$61,175,000, annual revenue of $38,874,000, annual operating cash flow of -$57,257,000, and annual free cash flow of -$57,257,000.In the third quarter of 2022, the company reported total revenues of $30,449,000, a 101% increase from the same period in 2021. This was primarily driven by a 111% increase in FOTIVDA U.S. product revenue, net, to $30,190,000. The increase in net product revenues was principally due to increases in the number of units sold to specialty pharmacies and specialty distributors, which were driven by a strong uptake in the adoption of FOTIVDA following its commercial launch in the United States.
Cost of products sold increased by 127% to $3,964,000 in the third quarter of 2022, compared to the same period in 2021, primarily due to the increase in net product revenues. Gross margin remained strong at 87% in the third quarter of 2022.
Research and development expenses increased by 48% to $11,074,000 in the third quarter of 2022, compared to the same period in 2021, primarily due to increases in expenses related to the company's tivozanib, ficlatuzumab, and AV-380 programs. Selling, general, and administrative expenses increased by 16% to $17,579,000 in the third quarter of 2022, compared to the same period in 2021, primarily due to increases in compensation costs related to the company's commercial infrastructure and external initiatives related to the commercialization of FOTIVDA.
The company reported a net loss of $3,266,000, or $0.09 per share, in the third quarter of 2022, compared to a net loss of $10,368,000, or $0.30 per share, in the same period in 2021.
As of September 30, 2022, AVEO had cash, cash equivalents, and marketable securities of $77,398,000.
Operational Highlights
During the third quarter of 2022, AVEO continued to execute on its commercial strategy for FOTIVDA in the United States. The company reported that as of September 30, 2022, 1,284 commercial prescriptions were filled, representing a 107% increase from 619 commercial prescriptions filled during the same period in 2021.In addition to the continued commercialization of FOTIVDA, AVEO made progress in advancing its clinical-stage pipeline. The company initiated a Phase 1b clinical trial to evaluate the safety and efficacy of AV-380 in cancer patients receiving existing standard of care therapies and anticipates initiating a potential Phase 3 registrational clinical trial of ficlatuzumab in combination with cetuximab in patients with HPV negative recurrent or metastatic head and neck squamous cell carcinoma (R/M HNSCC) in the first half of 2023.
Risks and Challenges
AVEO faces several risks and challenges, including: - Continued successful commercialization of FOTIVDA in the United States - Timely and successful development of its clinical-stage pipeline assets - Ability to secure additional strategic partnerships or collaborations to further advance its pipeline - Potential competition from other therapies in the RCC and other oncology markets - Regulatory and reimbursement hurdles for its product candidates - Reliance on third-party manufacturers and suppliers - Ability to attract and retain key personnelOutlook
For the full year 2023, AVEO expects to continue to drive growth in FOTIVDA U.S. net product revenues and advance its clinical-stage pipeline. The company anticipates completing enrollment in the TiNivo-2 trial evaluating tivozanib in combination with nivolumab in RCC patients who have progressed following one or two lines of therapy, one of which was an immune checkpoint inhibitor, in the second quarter of 2023. Additionally, the company plans to initiate a potential Phase 3 registrational clinical trial of ficlatuzumab in combination with cetuximab in patients with HPV negative R/M HNSCC in the first half of 2023.AVEO remains focused on executing its strategy to commercialize FOTIVDA in the United States, advance its clinical-stage pipeline, and position its assets for further development by partners, while maintaining a strong financial position to support its operations.