AVEO Pharmaceuticals, Inc. ( AVEO ) reported a fourth-quarter 2013 loss of 32 cents per share (excluding one-time expenses), narrower than the year-ago loss of 43 cents per share and the Zacks Consensus Estimate of a loss of 40 cents. The narrower year-over-year loss was primarily due to lower operating expenses. Investors however reacted negatively to the news with the shares falling 4.74%.ASTELLAS PHARMA (ALPMY): Get Free ReportALEXION PHARMA (ALXN): Free Stock Analysis ReportAVEO PHARMACEUT (AVEO): Free Stock Analysis ReportBIOGEN IDEC INC (BIIB): Free Stock Analysis ReportTo read this article on Zacks.com click here.
The company's total collaboration revenue for the fourth quarter was $0.3 million as compared to $15.5 million in the year-ago period. Revenue in the fourth quarter 2012 was boosted by milestone payments and research funding from partners.
AVEO reported a full-year 2013 loss of $1.94 per share, narrower than the Zacks Consensus Estimate of a loss of $2.12 and the 2012 loss of $2.58 per share. Full year collaboration revenues of $1.3 million were much lower than $19.3 million recorded in 2012.
In the fourth quarter of 2013, research and development (R&D) expenses were $11.9 million, down 50.5% year over year. The decrease in R&D expenses was primarily because of a decrease in personnel-related expenses. A decrease in expenses pertaining to the development of ficlatuzumab and tivozanib also led to the reduction in R&D costs. General and administrative expenses decreased 52.5% to $4.5 million, reflecting cost efficiencies post restructuring initiatives and lower pre-commercialization costs associated with tivozanib.
Post termination of its development and commercialization agreement with Astellas Pharma, Inc. ( ALPMY ) for the oncology candidate, tivozanib, AVEO expects to gain full rights to the candidate in August.
AVEO has several other candidates in its pipeline including ficlatuzumab (phase II - first line non-small cell lung cancer), AV-380 (first human trial planned for the second half of 2015 - cancer cachexia) and AV-203 (phase I). Currently, AVEO is actively looking for a partner to support the development of AV-203, ficlatuzumab and tivozanib.
However, Biogen Idec Inc. ( BIIB ) currently has an option to develop AV-203 in ex-North America territories. Thus, AVEO plans to amend its agreement with Biogen before it enters into a collaboration agreement for AV-203. Meanwhile, AVEO also plans to evaluate partnership opportunities to develop AV-380 for the treatment of cachexia associated with other indications such as chronic kidney disease, congestive heart failure and chronic obstructive pulmonary disease.
AVEO's shares have plunged more than 75% over the last one year given the disappointing news related to tivozanib. We expect the company to increase its focus on other pipeline candidates including AV-380. In the near term, we believe that investor focus will remain on the company's ability to secure a lucrative partnership deal.
AVEO carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Alexion Pharmaceuticals, Inc. ( ALXN ) carrying a Zacks Rank #1 (Strong Buy).