Priority Changes for Novartis Spell the End for Aveo Pharma Alliance

Xconomy Boston — 

When Aveo Pharmaceuticals found itself floundering three years ago in the wake of the FDA’s rejection of its lead cancer drug, Novartis threw out a lifeline: a partnership on another Aveo drug that would finance its development. Now Novartis is pulling that support away.

Novartis (NYSE: NVS) is ending the partnership on the compound AV-380, Aveo (NASDAQ: AVEO) disclosed in a regulatory filing on Tuesday. The Cambridge, MA, biotech said that it received a letter on June 29, in which the pharma giant said the decision is the result of “changes in management and strategic priorities within Novartis.” The agreement will formally end on Aug. 28.

AV-380 is a preclinical antibody drug that was being developed to treat cachexia, a condition characterized by muscle atrophy and weakness that is a complication of cancer. Aveo says the condition affects 5 million people in the U.S. The deal with Novartis paid Aveo $15 million up front for worldwide rights to the drug, plus $311 million more if it hit milestones. Under the agreement, Novartis was responsible for financing development of the drug. Three years after signing the deal the drug hasn’t gotten very far, and that apparently became a sore point for Aveo. The biotech formally disputed Novartis’s actions to fulfill its obligations under the deal, according to the filing.

Discussions between the companies to resolve the dispute over the AV-380 program will proceed even as the termination process moves forward, the filing says. If the disagreement comes down to money owed, Aveo isn’t saying how much. The company says potential milestones and other payments were not included in financial forecasts, so ending the licensing deal won’t affect its cash holdings.

Meanwhile, fortunes have improved for tivozanib, the Aveo cancer drug that the FDA rejected in 2013. Last year, European regulators approved the drug as a treatment for adults who have advanced kidney cancer. Aveo is also still trying to win FDA approval. The company is testing tivozanib in a Phase 3 study enrolling patients whose advanced kidney cancer can’t be treated with surgery. That study, along with an earlier Phase 3 trial testing tivozanib as a first-line treatment for kidney cancer, are intended to support a filing for FDA approval of the drug as a first and third-line treatment for kidney cancer.

Here’s more on Aveo’s kidney cancer drug and the subsequent partnership with Novartis on the cachexia drug.

Public domain image of renal cell carcinoma by the CDC