AVEO Oncology announced plans to cut its workforce by two-thirds, end its internal research functions, and vacate up to 80 percent of its facilities, including laboratory and vivarium locations. The biotechnology company was co-founded by Ronald DePinho, president of MD Anderson Cancer Center.
The restructuring would leave about 20 full-time positions.
The company also announced several changes in its leadership and board of directors, in a move to focus on the clinical setting, including the departure of Jeno Gyuris, AVEO’s chief scientific officer.
Michael Bailey was named the company’s president and CEO, after previously serving as chief business officer. He replaces Tuan Ha Ngoc, who will become chairman of the board of directors. The current chair, Henri Termeer, will become lead outside director. Additionally, Michael Needle was appointed chief medical officer.
“Since its founding, AVEO has benefited significantly from research, making the decision to eliminate this function particularly difficult,” Bailey said in a statement Jan. 7. “This change provides us with an opportunity to evaluate biomarker-driven clinical strategies and partnerships to advance our pipeline without continuing to incur internal research expense.”
DePinho, who at the time served as an AVEO board member, recommended the company’s stock in a May 18, 2013, appearance on the CNBC program “Closing Bell with Maria Bartiromo.”
Announcing the latest round of cuts, the company said it expects the restructuring and layoffs to cost approximately $4.5 million in severance and outplacement charges. The staff reduction is expected to save approximately $6 million annually.
Bailey joined AVEO in 2010 as chief commercial officer. Previously, he served as senior vice president and chief commercial officer of Synta Pharmaceuticals. He also held leadership positions at ImClone Systems, and worked on the development of Erbitux (cetuximab) and Cyramza (ramucirumab).
Needle, a hematologist/oncologist, most recently served as chief medical officer of Array BioPharma. Before that, he served as chief medical officer for the Multiple Myeloma Research Foundation. Needle also served as vice president of clinical affairs at ImClone.
In May 2013, an application for tivozanib in renal cell carcinoma, co-developed by AVEO and Astellas Pharma Inc., was considered by the FDA Oncologic Drugs Advisory Committee—which recommended against approval, and the drug was subsequently rejected by the FDA itself. In the submitted trial, survival was worse in the tivozanib arm than the control arm containing sorafenib (The Cancer Letter, May 3, 2013).
In the days following that vote from ODAC, AVEO’s stock dropped from over $7.50 to about $2.50 a share, and never fully recovered. At this time, AVEO’s stock price sits at $0.81, down from $2.01 a year ago.
Recently, the European Medicine Agency confirmed that tivozanib is eligible to be submitted for a marketing authorization in renal cell carcinoma, an indication in which tivozanib has previously been granted an orphan drug designation. AVEO said it is also exploring the use of tivozanib in non-oncologic diseases of the eye, in collaboration with Ophthotech.