(1) Organization

AVEO Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company committed to developing targeted therapies through biomarker-driven insights to provide substantial improvements in patient outcomes where significant unmet medical needs exist. The Company’s proprietary platform has delivered unique insights into cancer and related diseases. The Company’s development programs, which seek to advance its clinical stage assets, are as follows:

(i)

Tivozanib: A potent, selective, long half-life vascular endothelial growth factor (“VEGF”) tyrosine kinase inhibitor (“TKI”) of VEGF receptors 1, 2 and 3. The Company is evaluating several potential paths for the development of tivozanib, including a second phase 3 trial of tivozanib in refractory renal cell carcinoma, or RCC, to support an application for U.S. regulatory approval; the filing of a Marketing Authorization Application to seek European regulatory approval for tivozanib in RCC on the basis of existing trial data; and a phase 2 study for tivozanib in the first line treatment of metastatic colorectal cancer, or CRC, in a subgroup of patients with low serum neuropilin-1 (below the median, representing 50% of the population), a cell surface protein that modulates blood vessel development. Furthermore, the Company has entered into agreements to allow it to monetize tivozanib in areas outside of the Company’s core strategic focus. The Company has granted Ophthotech Corporation an option to develop and commercialize tivozanib for use in non-oncologic ocular conditions, and the Company has sublicensed to a subsidiary of Pharmstandard OJCE exclusive rights to develop and commercialize tivozanib for all conditions (excluding non-oncologic ocular conditions) in Russia, Ukraine and the Commonwealth of Independent States (CIS).

(ii)

Ficlatuzumab: A potent hepatocyte growth factor inhibitory antibody. The Company has entered into a partnership with Biodesix, Inc. (“Biodesix”) to develop and commercialize ficlatuzumab with BDX004, a serum based diagnostic test. Pursuant to the Biodesix agreement, the Company has initiated a phase 2 confirmatory study of ficlatuzumab (the “FOCAL” study) in combination with erlotinib, an epidermal growth factor receptor (“EGFR”) TKI, in first line advanced non-small cell lung cancer patients who have an EGFR mutation and who are identified by the BDX004 test as being most likely to benefit from the addition of ficlatuzumab to erlotinib.

(iii)

AV-203: A potent anti-ErbB3 (also known as HER3) specific monoclonal antibody with high ErbB3 affinity. The Company has observed potent anti-tumor activity in mouse models. AV-203 selectively inhibits the activity of the ErbB3 receptor, and the Company’s preclinical studies suggest that neuregulin-1 (also known as heregulin), levels predict AV-203 anti-tumor activity in preclinical models. The Company has completed a phase 1 dose escalation study of AV-203. The Company is seeking to pursue further clinical development of AV-203 with a strategic partner.

(iv)

AV-380: A potent humanized IgG1 inhibitory monoclonal antibody targeting growth differentiating factor-15, (“GDF15”), a divergent member of the TGF-ß family, for the potential treatment or prevention of cachexia, a serious and common complication of advanced cancer and a number of chronic diseases including chronic kidney disease, congestive heart failure and chronic obstructive pulmonary disease. The Company has established preclinical proof of concept for GDF15 as a key driver of cachexia. In August 2015, the Company granted Novartis International Pharmaceuticals Ltd. (“Novartis”) an exclusive worldwide license to develop and commercialize AV-380 and related AVEO antibodies that bind to GDF15. Novartis is responsible for all further activities and costs to develop and commercialize AV-380.

As used throughout these condensed consolidated financial statements, the terms “AVEO,” and the “Company” refer to the business of AVEO Pharmaceuticals, Inc. and its subsidiaries, AVEO Pharma Limited and AVEO Securities Corporation, both of which are wholly-owned.

The Company has devoted substantially all of its resources to its drug discovery efforts, comprising research and development, conducting clinical trials for its product candidates, protecting its intellectual property and the general and administrative functions relating to these operations.

The Company has an accumulated deficit as of September 30, 2015 of approximately $488.4 million, and will require substantial additional capital for research and product development.