Thursday, February 17, 2011

AVEO, Astellas form potential $1.4B drug development deal

By Michelle Lang

Cambridge-based AVEO Pharmaceuticals Inc. and Astellas Pharma Inc., of Tokyo, have formed a development and commercialization deal in which AVEO (Nasdaq: AVEO) will bring in $125 million upfront and up to $1.3 billion in potential milestone payments.

The agreement centers around the development of tivozanib, AVEO’s lead treatment for renal cell carcinoma (RCC), currently in Phase 3 clinical trials.

As part of the deal, AVEO will be responsible for tivozanib’s commercialization in North America, while Astellas will lead commercialization of the drug candidate in the European Union. The development and commercialization costs for North America and the EU will be split equally between the two companies, though Astellas will cover costs for commercialization outside of North America and the EU. A separate deal has Kyowa Hakko Kirin responsible for development and commercialization of tivozanib in Asia.

The $125 million upfront payment includes a $75 million license fee and $50 million in research and development funding from Astellas. AVEO’s potential $1.3 billion milestone payments consist of $575 million from clinical and regulatory milestones and more than $780 million of commercial milestones.