Three years after Novartis stepped up and chipped in a $15 million upfront in a $326 million deal to partner with Aveo $AVEO on their drug to block GDF15, the pharma giant is retreating from the pact and dumping its alliance.
Aveo’s filing with the SEC on the matter says that the worldwide development and licensing pact will conclude August 28, 15 days after the third anniversary of the collaboration.
Novartis has informed the Company that the AV-380 Program is an important asset and that the previously disclosed development delays, and ultimately the Novartis decision not to pursue further development, is the result of changes in management and strategic priorities within Novartis.
However, Aveo — unhappy with Novartis’ performance to date — still has a bone to pick with the pharma giant. The termination news arrived just one day after Aveo filed a dispute notification with Novartis about their diligence requirements on developing the drug, and if they can’t agree to the resolution, little Aveo is threatening to retaliate with arbitration as they wind down the deal.
By blocking GDF15 researchers believe that the drug could be used to treat severe weight loss — cachexia — in cancer patients by triggering a switch from a catabolic to an anabolic state.
Little Aveo has had plenty of ups and downs along the way, particularly after the former management team was charged with failing to tell investors about FDA demands for another tivo trial. Former Aveo CFO David Johnston is still fighting those charges, though former CEO Tuan Ha-Ngoc settled up last fall, paying $80,000 without admitting or denying the charges. Since then the new crew has won a European approval this year and is running a registration trial for the US.
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