AVEO Pharmaceuticals, Inc.

Good afternoon and welcome to the Avio Oncology Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone who wishes or requires any assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I will now turn the call over to Mr. Hans Wisdom of LifeSky Advisors. Please go ahead, sir.

Thank you, operator. Good afternoon, and thank you all for joining us on today's conference call to discuss Aveo's second quarter 2022 financial results. I'm joined today by Michael Bailey, Chief Executive Officer, Mike Ferraresso, Chief Commercial Officer, Eric Lucera, Chief Financial Officer, and Jeb LaBelle, Chief Operating Officer. Before we begin today's call, let me remind you that during this discussion, we will be making forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to important risks and uncertainties, including those that are detailed in today's press release and in the Risk Factor Summary and Risk Factors section of our most recent quarterly report on Form 10-Q, which is on file with the SEC. that may cause actual results to differ materially from those results expressed in such statements. Furthermore, we caution you that these forward-looking statements represent our views only as of today, and we do not assume any obligation to update these statements, whether as a result of new information, future events, or otherwise, except as required by law. With that, I will now turn the call over to Aveo's President and Chief Executive Officer, Michael Bailey. Michael?

Thank you, Hans, and thank you to everyone for joining us on today's call. I am pleased to report that this quarter our commercial team continued to build on the success of the Fativda launch and steadily increased market adoption as we kicked off the second year of commercial sales for Fativda. This positive momentum is reflected in both the number of prescriptions filled, which increased to 18% in the second quarter compared with the first quarter of 2022, and the U.S. Fativda net product revenue, which was $25 million for the second quarter, a 24% increase compared to the first quarter of 2022. While several factors help drive our success, we believe the most important one is that Fativda is fulfilling a significant unmet need by providing an evidence-based, effective, and well-tolerated treatment option for RCC patients who have relapsed or become refractory to two or more prior therapies. This fact was further recognized on June 17th of 2022 when the National Comprehensive Cancer Network, or NCCN, elevated FATIVTA to category one status. FATIVTA is now the only treatment with category one in that setting of RCC patients who have received two or more prior therapies. As background, the NCCN clinical practice guidelines are recognized standard for clinical policy in cancer care and are developed through a review of evidence and recommendations from physicians and oncology researchers. The current NCCN RCC guidelines make treatment recommendations for first line or subsequent therapy options for RCC patients and are referenced in the development of all other clinical pathways and formularies. Importantly, Category 1 is the highest category recommendation offered by the NCCN and reflects positive clinical evidence and perception of the product among the expert NCCN panel members. In addition, the Fativita launch was recently recognized by ZS Associates as an over-performing launch in its analysis of U.S. emerging pharma and biotech companies with first-time launches. And finally, Aveo and our PR agency were recognized during the 28th Annual Communicator Awards for excellence in our multimedia and PR campaigns. Mike Ferraresa will discuss this external recognition in more depth in a moment. With the strong sales trend demonstrated in the first two quarters of 2022 and the recent NCCN status elevation, we continue to be confident in our $100 to $110 million guidance for Fortivita U.S. net product revenue for fiscal year 2022. Furthermore, with growing recognition of our commercial acumen supported by the strong trajectory of Fortivita launch, we believe that there is an opportunity to leverage our commercial capabilities by identifying additional assets to potentially add to our commercial stage portfolio. We recently enhanced this effort and look forward to providing future updates on our progress. Turning to our clinical trial activity, we continue to align our R&D investments with our overall corporate strategy of focusing on the U.S. market opportunity for our portfolio while leveraging partnerships outside of North America to provide R&D funding for our development assets. Consistent with this strategy, we are working to expand the commercial opportunity of Tivozanib for the treatment of RCC, and our focus, our pipeline, R&D spend exclusively on development initiatives that get our antibody assets to key partnership inflection points. We believe this strategy will create partnering opportunities that can advance these assets with minimal investment from Aveo. During the second quarter, we sought to further refine this focus strategy by streamlining our planned R&D spend for the second half of the year, which resulted in a $10 to $20 million reduction in our full year 2022 R&D guidance. Eric will provide updated OPEX detail and guidance for the full year 2022 in a moment. With that as an update on our broader strategy, let me offer a quick overview for each program in our pipeline. During the second quarter, at the ASCO Annual Meeting in June of 2022, we presented two posters with new clinical data for Tivozinib. One poster featured updated data from a long-term and conditional overall survival analysis of Tivo3, both of which show improvements in overall survival relative to serafinib a non-selective VEGF TKI. The second poster at ASCO included data from a subgroup analysis of patients with non-clear cell renal cell carcinoma who had no prior VEGF-targeted treatment. This comes from a previously published Phase II randomized discontinuation trial. The analysis concluded that tavozinib demonstrated activity and a favorable safety profile in patients with non-clear cell RCC. On the clinical front, the Phase III Tenevo II trial, which is evaluating the combination of tavozinib and Optivo versus tavozinib monotherapy for the treatment of RCC patients progressing on a prior IO therapy, continues to enroll patients. We expect to be fully enrolled in the second quarter of 2023. If successful, the data from this trial has the potential to support an FDA approval of Tivozinib in combination with Nivolumab or Opdivo in relapsed refractory RCC, and this would expand the market opportunity for Fatibda into the larger second-line relapsed refractory RCC setting. In the deductive trial evaluating Tivozinib and Dervolumab in HCC, earlier this year, we announced encouraging data from the first-line cohort. Given the strength of this data and consistent with our focus R&D spend initiatives, we in AstraZeneca have decided to focus our evaluation on the first-line population and close down further enrollment for the second-line cohort of the study, which to date has enrolled five of 20 planned patients. Aveo is committed to providing tavozinib drug supply should AstraZeneca pursue a registrational study in the first line, but Aveo does not intend to fund further development for tavozinib in HCC or liver cancer. Turning to ficletuzumab, we believe this asset is well positioned to potentially address a significant unmet need that exists for patients with HPV-negative recurrent or metastatic head and neck cancer. A patient population whose prognosis is very challenging. After being granted fast-track designation by the FDA in the fourth quarter of 2021, we have announced two clinical trial collaboration and supply agreements, one with Merck KGAA, Darmstadt, Germany, in January, and one with Eli Lilly that we announced this quarter. These collaborations not only offset clinical trial costs by providing cetuximab, marketed as Erbitux, for the potential Phase III study, but we believe they also serve as validation of the strength of the data supporting the combination of ficletuzumab and cetuximab. Also of note, we recently completed full-scale drug substance manufacturing for ficletuzumab, which we believe strongly positions ficletuzumab as a potential phase three ready partnering opportunity. We plan on continuing to discuss trial designs with the FDA and to continue to seek a strategic partner to help initiate and fund a potential registration trial in the first half of 2023. For AB380, we remain on track to initiate a phase 1B clinical trial in GDF15 expressing cancer patients during the second half of this year. where we hope to generate additional data supporting the dosing, safety, and anti-GDF-15 activity of AV380 in cancer patients. We believe this Phase 1b data in hand, we will be in a strong position to find a partner for this potential blockbuster asset. All in all, we are pleased with our continued progress. In particular, we are pleased with the success to date with the Fatibda launch and the external recognition we have received which highlights the strength of our commercial capabilities and we believe creates the potential to leverage our commercial organization as a strategic asset in the future to attract additional potential commercial opportunities. I would like to turn the call over to Mike Ferraresso to walk us through more detailed commercial update, including second quarter 2022 metrics. Mike?