(1) Organization

AVEO Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company dedicated to advancing a broad portfolio of targeted therapeutics for oncology and other areas of unmet medical need. The Company’s proprietary platform has delivered unique insights into cancer and related disease. The Company’s strategy 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. In June 2013, the U.S. Food and Drug Administration issued a complete response letter denying the Company’s application for approval of the use of tivozanib in first-line treatment of advanced renal cell carcinoma (“RCC”), citing concerns regarding the negative trend in overall survival in the Company’s pivotal phase 3 trial. Subject to the availability of sufficient financial resources, the Company is planning to conduct a second phase 3 trial of tivozanib in the third-line treatment of patients with refractory RCC in order to address the overall survival concerns presented in the June 2013 complete response letter from the FDA and to support a request for regulatory approval of tivozanib in the United States as a third-line treatment and as a first-line treatment. The Company is also planning to conduct a phase 1/2 trial of tivozanib in combination with an immune checkpoint (PD-1) inhibitor for the treatment of RCC. The Company is evaluating all options for funding, including partnerships, for the clinical and regulatory advancement of tivozanib as a single agent and in combination. In February 2016, a strategic partner submitted a Marketing Authorization Application for tivozanib with the European Medicines Agency (“EMA”) for the treatment of RCC. The application was validated in March 2016, confirming that the submission was complete and that the EMA would initiate its review process. 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 for review 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 and 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 and for which the Company has completed a phase 1 dose escalation trial and has entered into a partnership with CANbridge Life Sciences Ltd. (“CANbridge”) to advance clinical development;

(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 International Pharmaceutical Ltd. (“Novartis”); and

(iv)

AV-353, a potent inhibitory antibody specific to Notch 3, which has demonstrated an ability in preclinical models to potentially reverse disease phenotype for pulmonary arterial hypertension (“PAH”), and for which the Company is currently seeking a partner to advance development in PAH.

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

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 general and administrative functions relating to these operations.

The Company has an accumulated deficit as of March 31, 2016 of approximately $502.7 million, and is subject to a number of risks including the need for substantial additional capital for research and product development. The Company will need additional funding to support its planned operating activities, and the timing and nature of activities contemplated for 2016 and thereafter will be conducted subject to the availability of sufficient financial resources.