Aveo Nabs $20M From Extended Deal with OSI Pharma
Aveo Pharmaceuticals has insisted it can bankroll its operations this year through partnerships, not venture capital, and now its proving the point again. The Cambridge, MA-based biotech company has nabbed $20 million by extending a partnership with Melville, NY-based OSI Pharmaceuticals (NASDAQ: OSIP).
The new deal between the two companies, which first teamed up in 2007, calls for Aveo to provide OSI with expanded access to its mouse model for cancer; the technology provides a more realistic facsimile of human cancer than traditional lab mice do. In return, OSI will fork over $5 million in upfront cash, and pay $15 million to boost its equity stake in Aveo. OSI, which co-markets the lung cancer drug erlotinib (Tarceva) with Genentech, is also agreeing to provide undisclosed research funding to Aveo for two years, and will give the smaller company a chance to collect milestone payments and product royalties if the partnership develops successful drugs.
The deal is another example of how Aveo, which I profiled in this space three weeks ago, has been on a roll. The company showed off promising results in late May for its lead drug for kidney cancer, tivozanib. Designed to work by blocking the formation of the blood vessels that nourish tumors, the drug could challenge big-time competitors from Pfizer and Bayer. Aveo plans to advance that drug into the highly expensive world of Phase III clinical trials later this year, and to keep advancing its other drugs in clinical development, while scraping up cash to pay all those bills through partnerships like this one with OSI.
“We’re trying to build a sustainable biotech company,” says Elan Ezickson, Aveo’s chief business officer. “We’re fortunate in this financial environment to bring in resources without giving up rights to develop our own drugs.”
OSI, like a lot of cancer-drug developers, has reason to want a more precise mouse model for the disease. For one, the technology could help OSI find biomarkers that might identify patients who are likely to respond to, or resist, new therapies.
“Our initial collaboration with AVEO has convinced us that these platforms represent a valuable and integral component in our ongoing efforts,” said Colin Goddard, OSI Pharmaceuticals’ CEO, in a statement.