Dive Brief:
- Novartis has walked away from its 2015 deal with Aveo Pharmaceuticals, according to an Aveo 8-K filing. The Swiss pharma had exclusive worldwide rights to develop and commercialize Aveo's antibody AV-380 and related GDF15 inhibitory antibodies.
- The move follows a prod from Aveo last week in the form of notice under the license agreement’s dispute resolution provisions, regarding Novartis' compliance with diligence obligations.
- Aveo will gain access to all preclinical, technical, manufacturing and other data from Novartis. The termination will be effective from Aug. 18. The spat with Novartis doesn't seem to have done the stock value any great harm. After a quick dip on the news, Aveo closed almost 8% up the day before the Independence Day holiday.
Dive Insight:
Pharma giant Novartis has blamed restructuring for its delays and subsequent exit of the deal with Aveo Pharmaceuticals, also known as Aveo Oncology. Signed in August 2015, the pact was worth up to $326 million including reimbursement, clinical, sales and regulatory-based milestone payments. AV-380 is in preclinical development for the treatment of cachexia (weight loss) in advanced cancer.
According to the filing, Novartis informed Aveo 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, the notice filed by Aveo suggests that all wasn't well with the collaboration, and dispute resolution looks set to rumble on in parallel to the termination process: "The next step… will be discussions between the Company and Novartis management. If the parties are unable to resolve the dispute at the management level, an arbitration could be commenced."
Novartis has been though some significant management changes over the last year, following a number of years of restructuring and three years of falling core operating profits. In September 2017, the company announced that CEO Joseph Jimenez would step down and global head of drug development and CMO Vasant Narasimhan would take up the reins of the company in February 2018. The company's full-year earnings report in January predicted a return to growth in 2018.
In March 2018, as part of an executive committee reshuffle, the Swiss company split into two divisions, Technical Operations and Business Services. That same month, GlaxoSmithKline bought out Novartis' 36.5% stake in the two companies' consumer healthcare joint venture, making the U.K.-based pharma sole owner. This followed up a complex asset swap between the two companies set up three years ago.