Aveo Pharmaceuticals Eyes $86.3M IPO

12/17/09

Aveo Pharmaceuticals indicated late yesterday that it wants to take the plunge into the public markets, filing papers with the SEC to raise up to $86.25 million in an initial public offering. It’s a brave move, considering that public markets have been stingy to biotech firms seeking IPOs in recent years.

The Cambridge, MA-based company launched a late-stage clinical trial for its lead drug, tivozanib, for treating kidney cancer, this month. The company is also known for its mouse models, which are genetically engineered to provide a more realistic facsimile of human cancer and used to predict whether experimental cancer drugs have a shot at working in humans.

Aveo, which has 134 employees, has been one of the high flyers in the Massachusetts biotech sectors since it spun out of labs at Dana-Farber Cancer Institute in Boston back in 2002. The company has raised an impressive $165 million, which includes $87 million in fees and payments from its pharmaceutical partners such as Biogen Idec (NASDAQ:BIIB), Merck & Co. (NYSE:MRK), and OSI Pharmaceuticals (NASDAQ:OSIP). All those firms have tapped Aveo for its cancer-drug-prediction technology involving the genetically engineered mice.

The other half of the money Aveo has raised has come from a large syndicate of venture backers, including Flagship Ventures, Highland Capital Partners, MPM Capital, Prospect Venture Partners, and Venrock Associates.

Luke dug deep into Aveo’s business over the summer, gaining insights from Aveo’s CEO, Tuan Ha-Ngoc, who talked about the firm’s partnership strategy and how it wants to bring its lead drug to market.

Aveo’s IPO filing follows Ironwood Pharmaceuticals’ own filing last month, which indicated the Cambridge-based company’s intention to raise up to $172.5 million in an IPO. Neither of these companies has a drug on the market, meaning that it could be several years before these firms turn a profit.

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