Organization

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

AVEO Pharmaceuticals, Inc. (the “Company”) is a commercial stage, oncology-focused biopharmaceutical company committed to delivering medicines that provide a better life for patients with cancer. The Company currently markets FOTIVDA® (tivozanib) in the United States. FOTIVDA is the Company's first commercial product and was approved by the U.S. Food and Drug Administration (“FDA”) for marketing and sale in the United States on March 10, 2021 for the treatment of adult patients with relapsed or refractory advanced (“R/R”) renal cell carcinoma (“RCC”) following two or more prior systemic therapies. The Company markets and sells FOTIVDA in the United States through its commercial infrastructure, and has made FOTIVDA available to patients through a network of specialty pharmacies and distributors. The Company continues to develop tivozanib in immuno-oncology combinations and other novel targeted combinations in RCC and other indications, and the Company has other investigational programs in clinical development.

FOTIVDA is an oral, next-generation vascular endothelial growth factor receptor (“VEGFR”) tyrosine kinase inhibitor (“TKI”). The FDA approval of FOTIVDA is based on the Company’s pivotal Phase 3 randomized, controlled, multi-center, open-label clinical trial comparing tivozanib to an approved therapy, Nexavar® (sorafenib), in RCC patients whose disease had relapsed or become refractory to two or three prior systemic therapies, which the Company refers to as the TIVO-3 trial. The approval is also supported by three additional trials in RCC and includes safety data from over 1,000 clinical trial subjects.

Based on FOTIVDA’s demonstrated anti-tumor activity, tolerability profile and reduction of regulatory T-cell production, the Company and its collaboration partners are continuing to develop tivozanib in RCC and in additional cancer indications with significant unmet medical needs including, hepatocellular carcinoma (“HCC”) and tumors that are resistant to immunotherapy, or immunologically cold tumors, in combination with immune checkpoint inhibitors (“ICIs”). In addition, the Company is evaluating tivozanib as a monotherapy in cholangiocarcinoma (“CCA”). The Company and the Company’s collaboration partners or independent investigators sponsor the development of tivozanib through preclinical studies and clinical trials conducted under collaboration agreements and investigator sponsored trial (“IST”) agreements or the Company's Cooperative Research and Development Agreement (“CRADA”) with the National Cancer Institute’s Surgical Oncology Program (“NCI-SOP”).

The Company is also seeking to advance its pipeline of four wholly owned immunoglobulin G1 (“IgG1”) monoclonal antibody product candidates, ficlatuzumab, AV-380, AV-203 and AV-353, to position each product candidate for further development. The Company currently expects to begin enrollment in the fourth quarter of 2022 for the Company’s Phase 1b clinical trial to evaluate the safety and efficacy of AV-380 in cancer patients receiving existing standard of care therapies. The Company also anticipates initiating its potential Phase 3 registrational clinical trial in human papillomavirus (“HPV”) negative recurrent or metastatic head and neck squamous cell carcinoma (“R/M HNSCC”) in the first half of 2023.

On October 18, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with LG Chem, Ltd., a corporation organized and existing under the laws of the Republic of Korea (“LG Chem”), and Acacia Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of LG Chem (“Merger Sub”), pursuant to and subject to the terms and conditions of which Merger Sub will be merged with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of LG Chem (the “Merger”). For additional information regarding the pending Merger please see Note 10 “Subsequent Events”. This does not assume the consummation of our pending transaction with LG Chem unless specifically stated otherwise.

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

Liquidity and Going Concern

In accordance with Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a

going concern within one year after the date that the consolidated financial statements are issued. The Company’s financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. Through September 30, 2022, the Company has financed its operations primarily through private placements and public offerings of its common stock, license fees, milestone payments and research and development funding from strategic partners, FOTIVDA commercial sales receipts and debt facilities. The Company has devoted substantially all of its resources to its drug development efforts, comprising research and development, manufacturing, conducting clinical trials for its product candidates, commercializing FOTIVDA, protecting its intellectual property and general and administrative functions relating to these operations.

The future success of the Company is dependent on its ability to continue to commercialize FOTIVDA in the United States, expand the commercial opportunity of tivozanib for the treatment of RCC and to position the Company’s other product candidates for further development by partners with the Company retaining all, or a portion of, the North American oncology commercial rights related to these product candidates. Ultimately, the Company is focused on its ability to create shareholder value. On March 10, 2021, the FDA approved FOTIVDA in the United States for the treatment of adult patients with R/R RCC following two or more prior systemic therapies. The Company’s future product revenues will depend upon the size of markets in which FOTIVDA, and any future products, receive approval, and its ability to achieve sufficient market acceptance, reimbursement from third-party payors and adequate market share for FOTIVDA and any future products in those markets. The likelihood of the Company’s long-term success must be considered in light of the expenses, difficulties and potential delays that may be encountered in the development and commercialization of new pharmaceutical products, competitive factors in the marketplace and the complex regulatory environment in which the Company operates. Absent the realization of sufficient revenues from product sales to support the Company’s cost structure, the Company may never attain or sustain profitability.

The Company has incurred recurring losses and cash outflows from operations since its inception, including an accumulated deficit of $696.3 million as of September 30, 2022. The Company anticipates that it will continue to incur significant operating expenses for the foreseeable future as it commercializes FOTIVDA in the United States and continues its planned development activities for its clinical and preclinical stage assets. The Company may require substantial additional capital to continue to advance its pipeline of clinical and preclinical stage assets to position each product candidate for further development by partners and the timing and nature of these activities will be conducted subject to the availability of sufficient financial resources, from product sales of FOTIVDA in the United States and potential future partnerships.

As of November 7, 2022, the date of issuance of these consolidated financial statements, the Company expects that its cash, cash equivalents and marketable securities of $77.4 million as of September 30, 2022, along with net product revenues from product sales of FOTIVDA in the United States, will be sufficient to fund its current operations for more than twelve months from the date of filing this Quarterly Report on Form 10-Q.

Management’s expectations with respect to its ability to fund current planned operations is based on estimates that are subject to risks and uncertainties, including, without limitation, risks related to its ability to generate sufficient product revenue from sales of FOTIVDA in the United States and to effectively manage expenses. If actual results are different from management’s estimates, the Company may need to seek additional strategic or financing opportunities sooner than would otherwise be expected. However, there is no guarantee that any of these strategic or financing opportunities would be executed or executed on favorable terms, and some could be dilutive to existing stockholders. If the Company is unable to obtain additional capital on a timely basis, it may be forced to significantly curtail, delay or discontinue one or more of its planned research or development programs or be unable to expand its operations or otherwise capitalize on the commercialization of its product.