AVEO Gains on Tivozanib Agreement with Ophthotech
AVEO Pharmaceuticals, Inc.’s (AVEO) shares gained around 10.9% ever since the company announced a research and exclusive option agreement with Ophthotech Corporation (OPHT). Ophthotech’s shares also gained around 6.7% on the news.
The Agreement in Details
As per the agreement, Ophthotech will get the licence to investigate the potential of AVEO’s tivozanib outside Asia for the treatment of non-oncologic diseases of the eye. Tivozanib is a small molecule vascular endothelial growth factor (:VEGF) tyrosine kinase inhibitor. Ophthotech will be responsible for all research and development activities and costs related to tivozanib’s non-oncologic eye indication outside Asia.
AVEO will receive an upfront option fee of $500,000 under the deal. Moreover, AVEO is eligible to receive up to $8 million as milestone payments depending on the achievement of specified research, development and business goals during the option term.
Ophthotech on its part will have the right to exercise an exclusive option for additional development and commercialization rights to tivozanib and also other products containing the candidate for non-oncologic eye indications outside Asia. These rights depend on certain conditions like outcomes of a proof-of-concept study and the negotiation of a definitive license agreement. Ophthotech will also be responsible for development and commercialization activities and costs for tivozanib’s ocular indications if it exercises the option.
On exercising the option Ophthotech will make another payment of $2 million as option exercise fee to AVEO. AVEO may further receive up to $50 million and $45 million as clinical and regulatory-based and sales-based milestone payments respectively.
Our Take
We believe that Ophthotech may bring some hope for AVEO as far as tivozanib is concerned. AVEO has been struggling with tivozanib’s oncology indications since last year when the candidate received a complete response letter from the FDA for the advanced renal cell carcinoma indication. AVEO’s share price has not seen any major improvement since then.
Earlier this year, AVEO also announced the termination of its worldwide collaboration and license agreement with Astellas Pharma, Inc. (ALPMY) for tivozanib.
AVEO carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is AMAG Pharmaceuticals, Inc. (AMAG) carrying a Zacks Rank #1 (Strong Buy).
Read the Full Research Report on AMAG
Read the Full Research Report on AVEO
Read the Full Research Report on ALPMY
Read the Full Research Report on OPHT
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