1.	Nature of Business and Organization

AVEO Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company committed to developing targeted therapies through biomarker insights to provide substantial improvements in patient outcomes where significant unmet medical needs exist. AVEO’s proprietary platform has delivered unique insights into cancer and related disease. AVEO’s strategy for building value is to leverage these biomarker insights and partner resources to advance the development of its clinical pipeline.

The Company’s pipeline of product candidates includes tivozanib, a potent, selective long half-life vascular endothelial growth factor tyrosine kinase inhibitor of all three vascular endothelial growth factors, or VEGF TKI, for which the Company previously demonstrated tivozanib’s safety and efficacy in first and second line RCC. However, the U.S. Food and Drug Administration issued a complete response letter denying AVEO’s application for approval of the use of tivozanib in first line advanced RCC. The Company is planning to conduct a phase 3 trial of tivozanib in the third-line treatment of patients with refractory RCC to support a request for regulatory approval of tivozanib as a third-line treatment and to address the overall survival concerns presented in the June 2013 complete response letter from the FDA. A strategic partner has submitted a Marketing Authorization Application for tivozanib with the European Medicines Agency for the treatment of RCC in February 2016. Another strategic partner has submitted a registration dossier for tivozanib with the Ministry of Health of the Russian Federation for the treatment of RCC in December 2015 that was accepted in February 2016.

The Company also has a pipeline of monoclonal antibodies, including:

(i)

Ficlatuzumab, a potent anti-HFG antibody that inhibits the activity of the HGF/c-Met pathway for which the Company has completed a phase 2 clinical trial, and has entered into a partnership with Biodesix, Inc. (“Biodesix”) to advance clinical development,

(ii)

AV-203, a potent, high affinity inhibitor of ErbB3 function that has demonstrated anti-tumor activity in multiple preclinical models for which the Company has completed a phase 1 dose escalation trial,

(iii)

AV-380, a potent humanized IgG1 inhibitory monoclonal antibody targeting growth differentiating factor-15, or GDF15, a divergent member of the TGF-ß family, for the potential treatment or prevention of cachexia, which the Company has licensed to Novartis.

As used throughout these 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 an accumulated deficit as of December 31, 2015 of approximately $495.0 million, and will require substantial additional capital for research and product development. The Company believes that its existing cash and cash equivalents are sufficient to fund its operations through at least twelve months from the balance sheet date.