Aveo Enters Agreement with Schering-Plough to License, Develop Cancer Drugs

Aveo Pharmaceuticals, Inc. (Cambridge, MA, USA), a biopharmaceutical company focused on the discovery and development of novel cancer medicines, has entered into an exclusive worldwide agreement with Schering-Plough Corporation (Kenilworth, NJ, USA) to develop and commercialize AV-299.

AV-299, an antibody discovered by Aveo, is a highly potent antagonist of hepatocyte growth factor/scatter factor (HGF/SF), which has demonstrated excellent efficacy in preclinical models of human cancer. It is expected to enter clinical trials in early 2008. Aveo's Human Response Prediction (HRP) platform will be utilized to guide the clinical development of AV-299.

Under the terms of the agreement, Aveo will have primary responsibility for clinical development of AV-299 through proof-of-concept in man. Aveo will also apply its HRP platform during a multi-year translational research program designed to discover biomarker profiles of patients most likely to benefit from treatment with AV-299. Results of this research will be used to design the optimal clinical development plan for AV-299. Aveo retains the option to co-promote AV-299 in the United States for certain oncology indications.

In consideration of the exclusive worldwide license, Aveo will receive a US$7.5 million upfront payment and a $10 million equity investment from Schering-Plough. Schering-Plough will fund all research and development expenses. Milestone payments for the successful development and commercialization of AV-299, if all approvals in multiple indications and all sales milestones are achieved, could exceed $460 million. Upon commercialization, Aveo is eligible to receive royalties on net sales. The transaction is subject to clearance under the Hart, Scott, Rodino Antitrust Improvements Act (HSR).

AV-299 has the potential to be a breakthrough cancer medicine, addressing large unmet needs across multiple tumors, given its mechanism of action targeting the HGF/c-Met pathway, said Tuan Ha-Ngoc, Aveo's president and CEO. Aveo sought a strategic partner early to maximize the breadth and depth of AV-299's development program. Schering-Plough is the ideal partner because of [its] biopharmaceuticals experience, commercial capabilities and [its] identification of oncology as a targeted strategic area. Moreover, Schering-Plough recognized our corporate desire to continue to lead the development of AV-299 through proof of concept in man and to retain an option to co-promote the product in the U.S. Both of these elements are very important for us as we continue to advance our two lead clinical programs, AV-951 and AV-412.

AV-299 is a highly potent antagonist of hepatocyte growth factor/scatter factor (HGF/SF), which has demonstrated excellent efficacy in preclinical models of human cancer. The HGF/c-Met pathway is frequently deregulated in different types of human cancers and is thought to play an important role in regulating tumor growth, invasion, and metastasis. Utilizing its proprietary technology platform, Aveo has developed substantial evidence of the importance of the HGF pathway in tumor maintenance.

The diverse biologic roles of the HGF/c-Met pathway make the selection of patients most likely to respond to anti-HGF therapies especially difficult. To guide the clinical development of AV-299, AVEO is using its proprietary preclinical models of human cancer to identify specific populations of tumors in which the HGF/c-Met pathway plays a critical role in tumor maintenance, as opposed to those in which the pathway is activated but not essential. Aveo's human response prediction platform provides Aveo with unique insight into the biology of anti-HGF therapies, and positions it to move AV-299 forward into clinical development.


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