Novartis Terminates 2015 Aveo’s Antibody AV-380 Program

Novartis has struck down its development deal with Aveo for the company’s proprietary antibody AV-380, as well as other antibodies that inhibit growth differentiation factor 15. Novartis initially struck the licensing agreement with Aveo in 2015. The deal was worth an estimated USD 326 million, which included USD 15 million in upfront payments and USD 311 million in milestones. Aveo said that Novartis’ decision to terminate the AV-380 program is without cause and triggers the termination of all licenses and other rights granted by Aveo to Novartis with regard to the AV-380 program. Additionally, the agreement calls for Novartis to transfer all preclinical, technical, manufacturing and other data to Aveo.

At the time the initial deal was announced Aveo’s AV-380 asset was seen as a potentially promising treatment for cachexia secondary to multiple disease states, including cancer, chronic kidney disease, congestive heart failure and chronic obstructive pulmonary disease. That promising treatment though has not gone as far, or as rapidly, as Aveo likely hoped. Cambridge, Massachusetts-based Aveo quietly announced the end of the AV-380 agreement in a filing with the US Securities and Exchange Commission this week. According to the filing, Novartis announced its termination one day after Aveo reached out to the Swiss company regarding the slow development of the asset. Aveo said it provided Novartis with a notice that disputed Novartis’ compliance with the obligations laid out in the 2015 licensing agreement.

One day after Aveo reached out, Novartis announced it was discontinuing the program and returning the asset to Aveo. In the filing, Aveo said that Novartis said the AV-380 Program is an important asset, however, developmental delays and a shift in management and strategic priorities at the Swiss pharma company resulted in the termination of the agreement. The termination is expected to be finalized on August 28, 60 days after Novartis announced the termination of the development agreement. Aveo said it hopes to settle matters at the managerial level, but if dispute resolution procedures cannot be resolved there, then it will likely seek arbitration. The dispute resolutions could run parallel to the termination process, Aveo said. While Novartis will return the asset, Aveo said in the filing that Novartis has not included any of the potential milestone or other potential payments under that USD 311 million licensing agreement. That loss of income will not impact Aveo’s cash guidance, the company said in its filing. It has however caused some investors to balk at the stock this morning, causing the price to dip in morning trading. – PharmaBiz