AVEO Pharmaceuticals, Inc. - Special Call

| About: AVEO Pharmaceuticals, (AVEO)

AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO)

June 11, 2013 8:00 am ET

Executives

David B. Johnston - Chief Financial Officer and Principal Accounting Officer

Tuan Ha-Ngoc - Chief Executive Officer, President and Director

William J. Slichenmyer - Chief Medical Officer

Analysts

Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division

Salveen J. Richter - Canaccord Genuity, Research Division

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

Michael G. King - JMP Securities LLC, Research Division

Brian Klein - Stifel, Nicolaus & Co., Inc., Research Division

Operator

Thank you for holding, and welcome to the AVEO Oncology's Conference Call. [Operator Instructions] Please be advised that this call is being taped at the company's request, and will be archived in the company's website for 2 weeks from today. At this time, I would like to introduce Mr. David Johnston, Chief Financial Officer of AVEO. Please go ahead.

David B. Johnston

Thank you, operator, and thank you, all, for joining us this morning. With me today is Tuan Ha-Ngoc, our President and Chief Executive Officer; and Bill Slichenmyer, Chief Medical Officer. Let me remind everyone that certain matters discussed today may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about AVEO's future expectations, plans and prospects, financial projections, clinical development and regulatory timelines and the potential approval and success of our product candidates. These statements involve important risk and uncertainties, including those that are described in the risk factors section of our most recent Form 10-Q filed with the SEC and available online at sec.gov. While these forward-looking statements represent our views as of today, these should not be relied upon as representing our views in the future. We may update these statements in the future but I'm not taking on an obligation to do so. So with that, I will now turn the call over to Tuan.

Tuan Ha-Ngoc

Thank you, Dave. As we announced yesterday, we have recently received the Complete Response letter or CRL from the FDA for the application of tivozanib for the treatment of advanced RCC. While it is not surprising, given the position of the FDA doing our ODAC panel last month, we are still disappointed that the FDA did not approve our application. We continue to believe that tivozanib has been demonstrated to be a safe and effective treatment option for kidney cancer. Overall, we think this is the last of patients that would have been helped by tivozanib.

Let me now pass the call to Bill.

William J. Slichenmyer

Thanks, Tuan. In the Complete Response letter, as well as at ODAC, the primary concern was the overall survival or OS trend in our pivotal trial, which favored the control arm, sorafenib. We continue to believe that the significant difference in the use of the second-line therapies, particularly the very high use of colozenib in the control arm following sorafenib caused this trend.

Speaking briefly to the second deficiency mentioned in the Complete Response letter on the dissolution for tivozanib, the registration lots provided in our NDA meet the tighter specifications as stated by the FDA. We have the necessary data to support the change in this solution specifications. This will be reflected in our next filing and can be met for our commercial lots. Ultimately, this could have been addressed before the PDUFA date and we do not believe this was an obstacle for our approval.

Focusing then on the overall survival trend noted in the Complete Response letter. In 2 early conversations with the FDA during meetings in 2008 and 2009, both prior to initiation of the TIVO-1 study, the FDA and AVEO acknowledged that overall survival in our pivotal trial would be compounded by the subsequent use of anticancer therapies just as it has been in other RCC pivotal trials. We did not expect that to be an impediment to approval, any more than it had been in these earlier studies.

As it turned out, the extent of compounding was flagged as a concern by the FDA and was the focus of discussion at our ODAC meeting last month. We believe that the compounding of overall survival in TIVO-1 was due both to the impact of the echo comparator [ph] and the imbalance in the use of second-line therapies. In other words, as we stated at ODAC, we believe that the patients who survived longer in the control arm did so because the majority of patients received 2 drugs in succession instead of a single drug.

We enabled patients in the TIVO-1 study who are randomized to the control group to receive tivozanib as a second-line therapy after their cancer continue to progress on sorafenib. This kind of protocol is often referred to as a one-way crossover. This one-way crossover was described in a companion protocol to our TIVO-1 study, which we submitted to the FDA in September 2009. AVEO did not receive feedback from the FDA on the companion protocol, which is not uncommon. We, likewise, received no comments on this element of our protocol when we submitted it to other regulators around the world. For these reasons, we were surprised by the intensity of the criticism regarding the crossover at ODAC.

We decided to offer tivozanib as a second-line therapy following sorafenib with the best of intentions. Consistent with our belief in the benefit that tivozanib could bring to all RCC patients, it was our and the investigator's conclusion that making tivozanib available in this way was the right thing to do for patients participating in the trial. All prior first-line pivotal trials and RCC, such as those for sorafenib, sunitinib and pazopanib, included a one-way crossover to the investigational drug as part of their design and went on to receive FDA approval. The big difference between those other trials and TIVO-1 was that our trial used an active comparator in the first line instead of placebo or alpha interferon.

Since ODAC, we have received questions about FDA's recommendation for a second study. Let me walk you through our thinking on that and provide some context. Let's start with the pre-NDA meeting we had in May 2012. At that meeting, we discussed with the agency the results from an interim analysis of overall survival along with other efficacy and safety data. The agency expressed concern about the adverse trend in OS. Directly from the FDA's minutes from that meeting, I quote, "The agency expressed a concern about the adverse trend in overall survival. Further discussion of these findings will be required at the time of filing, and if the application is filed, there will be a review issue that could affect the provability. The FDA recommended that the sponsor conduct a second adequately powered randomized trial in a population comparable to that in the U.S."

At that time, the agency requested that the NDA submission include the results from the final OS analysis which was expected sometime after August 2012. After the pre-NDA meeting, we conducted an extensive analysis and concluded that our data package, as submitted, was sufficient for approval and that if another trial were to become necessary, it could be conducted in a post-marketing study. More specifically, we thought the package was sufficient for approval because the study had met its primary endpoint, PFS, versus an active comparator, something no other agent has achieved in the first-line setting to date. There were no major issues regarding the safety profile. The central question raised was about OS as secondary endpoint. We believe that the OS results were compounded by the fact that the majority of patients in the control arm received 2 drugs rather than 1. Moreover, when the final OS results became available in September 2012, the difference between the arms was not statistically significant. Thus, we believe it was likely that tivozanib would be approved and proceeded with the NDA submission later that month.

The NDA was accepted for filing by the agency in November 2012. An important communication from the agency was the day-74 letter, which was routinely issued by the agency at the time that they make a decision on whether to accept an NDA for filing or to issue a refusal to file. The day-74 letter for an accepted filing typically identifies important review issues. If the agency had felt that our package was unacceptable, they could've issued a refusal to file or RTS. They did not do so. In our case, the letter indicated that the overall survival results would be an issue for discussion at ODAC. There was no mention in this letter about the need for an additional study. Following the filing of the NDA, the FDA initiated other activities including clinical site and supply chain inspections and sent us regular follow-up questions.

All of these communications came as we also discussed with the FDA about various designs for an additional trial. As of the ODAC meeting, we had reached no conclusion on whether or what trial would be required. At no time in the communications to the FDA say that a study would be required prior to approval. In fact, as recently as March 2013, minutes from the meeting with the FDA stated that, "The review of the NDA continues and no final decision has been made as of this point."

In sum, before I hand the call back to Dave, let me say that our the communications with the agency leading up to the ODAC meeting led us to expect a balanced discussion of tivozanib's benefits and risks. The outcome was not as expected and is disappointing to us all.

David B. Johnston

Thanks, Bill. We believe AVEO has been transparent about the data, the concerns expressed by the FDA and our understanding of the risks that are involved. When we first heard the FDA's concern in May of last year, we felt the best manner in which to address the overall survival concern was to promptly engage in discussions with the FDA to further clarify their issues in an attempt to determine path forward. In response to our request for a meeting, the agency initially informed us that the meeting would not occur until September. It was subsequently rescheduled for the end of August. With this timing, and the earnings release in 10-Q scheduled for early August, we elected to disclose the FDA's concern with the OS trend in our first 10-Q and earnings release following the pre-NDA meeting. We did not believe that the FDA had decided their application could not be approved without a second trial. Instead, as you guys heard from Bill, we understood the FDA might require such a trial and we thought if that were to be the case, the agency would likely require it after approval. Pending clarification, we determined the most prudent path forward was to disclose the FDA's concern as to the OS data itself. We saw the FDA's acceptance of our NDA filing as reinforcing the view that the NDA package was complete and sufficient to support the approval. As we just heard from Bill, we believe this was further supported in the day-74 letter and pre-approval activities like the clinical manufacturing site audits and the routine nature of the FDA's follow-up questions. We believe the FDA still hadn't made a firm decision on this front as noted in the briefing books, in which it was looking to ODAC to help them make such a decision.

Based on our numerous favorable interactions with the medical oncology community regarding the TIVO-1 data, we viewed ODAC as an important opportunity to discuss the full tivozanib data, provide additional analyses concerning the overall survival trend and demonstrate the approvability of tivozanib to a panel of practicing oncologists. Consistent with our view that tivozanib had a reasonable chance of being recommended for approval for the treatment of RCC, AVEO began judiciously building on our commercial team. There's always a balance between managing the risk of non-approval and being ready for a successful drug launch. As we communicated in early 2013, we plan to hire 40 field sales representatives contingent upon our positive recommendation from ODAC. Given the outcome for ODAC, we did not move forward with these plans.

As I think about the future, we recently disclosed that our partner, Astellas, informed us that based upon the FDA's position at ODAC, they do not intend to file for approval in Europe. Additionally, they indicated they do not intend to fund further development of tivozanib for the treatment of RCC in the U.S. However, joint development in colorectal and breast cancer is continuing. Thus, it is a great regret that we announced last week that we do not have plans to continue development of tivozanib in RCC. This is a very difficult decision. Equally as challenging was last week's announcement of a strategic restructuring of AVEO. The restructuring is expected to extend our cash runway for at least 2 years while maintaining the resources needed to develop tivozanib and other indications, including colorectal and breast cancer, as well as advancing our pipeline of antibodies. So with that, we are concluding our formal remarks and we'll open the lines for questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] And the first question comes from Geoff Meacham from JPMorgan.

Geoffrey C. Meacham - JP Morgan Chase & Co, Research Division

I know you -- last week, you said you stopped enrolling in the TAURUS study. Just wondering if you could give us some metrics on how many patients were enrolled and what you're planning to do with that data? And then, also, just in your discussions with Astellas, was there any talk about RCC and combining potentially with an mTOR or PD-1 as a potential path forward? I know that when we talk to physicians, they said maybe the way that RCC would be more combination therapy going forward.

William J. Slichenmyer

Thanks for the question. The TAURUS study, for those who may not be familiar with it is a study in which we are comparing tivozanib versus Sutent in a study designed around the primary endpoint of patient preference. The planned sample size was 160 patients. We have enrolled 49 and have stopped enrollment at this point. We do plan to proceed to gather the data, and importantly, make sure that all of the patients on the study were benefiting from tivozanib are able to continue receiving the drug. In terms of your question about possible future combinations of tivozanib with an mTOR inhibitor or a PD-1 agent, these are ideas that we have kicked around some with our colleagues at Astellas as well as with some experts in RCC. But at this point, we have no specific plans to move ahead with any of those in RCC.

Operator

Your next question comes from Salveen Richter from Canaccord.

Salveen J. Richter - Canaccord Genuity, Research Division

Just wondering how we should think about IP as it relates to the outlook for the BATON program. And then also, with the proposed dissolution acceptance criteria, how that might affect the BATON trials, if at all?

William J. Slichenmyer

Let me answer the question about the dissolution first, we do not anticipate any impact on our clinical programs from this point from the FDA. It's one -- we have the data available already, it's just simply a matter of restating the criterion and moving ahead with this implementation. And sorry, remind me the first part of your question.

David B. Johnston

Salveen, with the question about the intellectual property.

Salveen J. Richter - Canaccord Genuity, Research Division

Exactly, the runway there and the outlook.

David B. Johnston

Yes, so the runway forward is tivozanib has patent protection through 2022, with expected extension to 2025.

Operator

The next question comes from Adnan Butt from RBC Capital Markets.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

I have 2 questions. First, from the events that transpired, it seemed that the FDA wanted a second study, but the company went ahead and filed regardless of the FDA's communication. Did AVEO ever directly ask the FDA if a second study was needed? That's the first question. And then in terms of the second question, with the outcome of this decision, has it impacted enrollment in the ongoing studies in any way?

William J. Slichenmyer

So in terms of did we directly ask the agency if another study was needed. What we did ask was whether or not or in what way this request for another study might impact the fileability of our NDA, and we did not get a clear answer prior to the submission on that question other than for them to say that they would evaluate it at the time of their filing decision. And as we now know, they accepted the NDA for filing. We have subsequently suggested a couple of times to the agency that we view this as a post-approval study and the agency did not commit to agreeing with that or to disagreeing with that. And so it was left somewhat unclear to us and had been up until the ODAC meetings.

David B. Johnston

Yes, except that I would say that probably the most direct answer that we did receive from the FDA was in our March 2013 meeting with them, where we wanted to confirm that after all this back and forth that the application was under review and we said that if it was not, we would want to know. If this was a pre-approval requirement and the FDA quote was "The review with the NDA continues and no final decision has been made as of this point." And as you heard Bill say, it was obviously the primary question at ODAC. So the FDA, to us, had not decided. It clearly not decided that this was a pre-approval requirement.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

Okay. In terms of the impact on enrollment and ongoing studies.

William J. Slichenmyer

Yes. We have not seen any impact on enrollment other than those -- the TAURUS study from which we have chosen to hold at the moment.

Tuan Ha-Ngoc

And the colorectal study has been fully enrolled.

William J. Slichenmyer

Yes, that's right.

Operator

Your next question comes from Mike King from JMP Securities.

Michael G. King - JMP Securities LLC, Research Division

I just wanted to ask what kind of post-approval study would you have contemplated? That would be the first question. And then the second question is, typically, [indiscernible] enrollment in the [indiscernible] Why that path wasn't contemplated.

David B. Johnston

Mike, your signal broke up there for a minute. I can address at least part of your question that we heard and that was about what kind of study design. We did -- we have, for a period of months, starting from the pre-NDA meeting up until the ODAC meeting, had intermittent communications with the agency about study design. Our first proposal is for a study that was COMPARZ like, for those of you familiar with the COMPARZ trial, which was a head-to-head comparison of Votrient and Sutent with a non-inferiority design, PFS was the primary endpoint. We had initially suggested something similar to that. The agency provided feedback to us with suggestions for different designs and we subsequently gone back and forth with them on a couple of different alternatives, and not yet reach an agreement on what that study might be. But as you heard at this point, we do not plan to move ahead with that next study. And then unfortunately, we could not make out the rest of your question. So can you try and repeat it for us, please?

Michael G. King - JMP Securities LLC, Research Division

So the question was typically speaking, [indiscernible] the panels spring, so that the members of the panel could gain comfort that any questions that they may have at the panel meeting may get resolved in the post-approval setting. So why -- can you say why you hadn't done something similar at the time?

David B. Johnston

Mike, this is Dave. Unfortunately, the first part of your question, you completely broke up again, I apologize. So can you start -- just ask the part of your question very quickly before you break up and then we'll try to answer.

Michael G. King - JMP Securities LLC, Research Division

Why wasn't your trial up and running at the time of the [indiscernible]?

William J. Slichenmyer

So from the time that we first heard from the agency about their concern, which is at the pre-NDA meeting, we reached out to them to propose a study design just a few weeks later and it was not until the end of August that we then got some feedback from them, found that they do not agree with what we had decided or what we had proposed, I should say. Even if we had gotten their bio [ph] at that time and started to move towards implementation, the study, I think, probably would not have been up and running at the time of ODAC. And even if it had been, I'm not sure that would've changed the outcome of the vote. Some of the advice that we got along the way was that if there's an ongoing next study, it makes it easy for the panel members to vote to simply wait for more data. So I'm not sure that, that would've changed the outcome even if we haven't been able to proceed that quickly.

Operator

Our next question is from Brian Klein from Stifel.

Brian Klein - Stifel, Nicolaus & Co., Inc., Research Division

So you consistently stated that you believe tivozanib is an active agent for RCC. So I'm just wondering, what is it that specifically is precluding you guys from moving forward in RCC? Is it the cost of the trial? Is it the timing requirement? What was the handle -- the straw that broke the camel's back in terms of moving forward in RCC for you guys specifically outside of the partnership with Astellas? And then my second question is, what do you think is different about the other indications, breast and CRC, that you think will allow you guys to succeed there?

David B. Johnston

Great. So I'll answer the first one, Brian, and then I'll hand it over to Bill for the second. The straw that broker the camel's back was actually Astellas deciding that they did not want to proceed forward. But I got to be frank and that it was a challenging target under any circumstances. To do another first-line trial would've been very expensive and it would probably have taken at least 3 years just to execute the trial and probably would have been at least 4, maybe 5 years, before we had an approvable drug. Economically, that becomes very difficult and very expensive. But certainly, when Astellas said that they no longer had any interest in funding the U.S. development of RCC, that actually made the conversation very short. But you're right, it's an active drug. It's a shame, and that's why it's such a regrettable decision. And I'm going to pass the other question over to Bill.

William J. Slichenmyer

Yes. So regarding a question of why we believe that tivozanib can be successful in breast and colorectal cancer, we have seen evidence with sort of the other anti-angiogenic agents, principally ficlatuzumab [ph] activity in these diseases demonstrating that anti-angiogenic approaches can be beneficial in some patients. When we think about some of the challenges faced by other VEGF TKIs in these settings, chiefly, it's been related to the toxicity of these drugs, and especially when they're given in combination with chemotherapy in the subsequent need for dose reductions and interruptions. As we showed in our TIVO-1 study and also in Phase Ib combination studies of tivozanib with paclitaxel or tivozanib with FOLFOX, our drug has been associated with lower rates of dose reductions and interruptions than the other TKIs. And so we think that tivozanib can be can successful where others have not. And I would lay upon that the benefit of our Human Response Platform, which has allowed us to prospectively define biomarker populations within the species types, in which we believe tivozanib will provide an even more significant benefit than has been seen in the past. So we look forward to the results of these studies in the second half of 2014.

Brian Klein - Stifel, Nicolaus & Co., Inc., Research Division

Great. Thanks. And then there's one quick follow-up. Given what we've learned from the TiVo studies, would you anticipate having to run 2 randomized Phase III studies for both CRC and breast?

William J. Slichenmyer

That's something that we would need to discuss with the agency when we get a little further along in the program. It would be premature, I think, to speculate on that at this point.

Operator

Thank you. There are no further questions. So ladies and gentlemen, this concludes your conference call for today. Thank you for your participation. You may now disconnect.

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