Novartis AG terminated a licensing agreement signed in August 2015 with AVEO Pharmaceuticals Inc. for a proprietary antibody that could help treat cachexia, a metabolic syndrome that appears alongside diseases such as cancer, chronic kidney disease, congestive heart failure and chronic obstructive pulmonary disease.
The Swiss pharmaceutical giant originally agreed to pay $15 million upfront, with AVEO potentially eligible to receive $311 million under certain milestone payments, as well as royalties on future sales of the AV-380 program.
Novartis told AVEO that the asset was an important one and that the termination is a result of changes in its management and strategic priorities, AVEO said in an SEC filing.
The Cambridge, Mass.-based company had sent a compliance notice to Novartis on June 28 regarding delays in the development of the AV-380 program. The management teams of both companies plan to meet to find a solution, and AVEO may launch arbitration proceedings if they are unable to resolve the dispute at the management level, the company added.
As a part of the termination, effective Aug. 28, AVEO will receive all preclinical, technical, manufacturing and other data and assets developed by Novartis for AV-380.