Stock buyers are putting their faith in AVEO Oncology Inc. to the tune of about $50 million in gross proceeds, coming the firm's way through a public offering expected to close later this month.

CFO David Johnston acknowledged that while the $7.50-per-share price of 6.6 million shares to be sold represents a 7.6 percent discount to the previous day's last trade, it's "right in the wheelhouse" of similar deals.

"If you look at the last 20 follow-on offerings in this deal size, the $40 million to $75 million range, the mean [discount] is about 8.4 percent, and the median is about 6.2 percent," he said.

Cambridge, Mass.-based AVEO's shares (NASDAQ:AVEO) closed Thursday at $7.61, down 51 cents.

Tivozanib – an oral, once-daily, VEGF receptor tyrosine kinase inhibitor, partnered by AVEO with Astellas Pharma Inc., of Tokyo – turned up pleasing results in the Phase III trial that compared progression-free survival rates with Nexavar (sorafenib, Onyx Pharmaceuticals Inc.) in kidney cancer, but overall survival (OS) rates caused some eyebrows to rise. Specifically, OS showed somewhat greater in the control arm than in the tivozanib arm. (See BioWorld Today, Jan. 4, 2012, and Aug. 6, 2012.)

The OS glitch is "something that we have addressed with the FDA," Johnston said, and AVEO will be presenting more OS data at the American Society of Clinical Oncology's Genitourinary Cancers Symposium in Orlando, Fla., next month, along with some data from subpopulations.

But it all "simply confirms what we've already said," Johnston told BioWorld Today. Most of the control arm patients received tivozanib as a second-line therapy, once they had progressed on Nexavar, he said. "In the tivozanib arm, because of where the trials were done and the design of the trial, the great majority received no active second-line treatment." Johnston said. "So it's effectively one drug vs. two drugs. We think it makes perfect sense" that the OS would differ somewhat.

The company has begun a Phase II study with tivozanib in triple-negative breast cancer (TNBC), an indication that has gotten plenty of attention lately.

In November, published results from preclinical work with Rockville, Md.-based EntreMed Inc.'s oral Aurora A angiogenic kinase inhibitor lifted the shares almost 25 percent. Clinical Cancer Research included a paper that suggested the compound, ENMD-2076, acts potently against breast cancer cell lines that lack expression of the estrogen and progesterone receptors, while also lacking HER2 amplification, i.e., TNBC. That form of the disease makes up only about 15 percent of all breast cancer cases, but the unmet need is great. (See BioWorld Today, Nov. 27, 2012, and Dec. 10, 2012.)

AVEO's TNBC trial in 147 patients began enrolling late last year to test tivozanib plus paclitaxel against paclitaxel plus placebo. "We think the addition of a VEGF therapy with paclitaxel has the potential to work especially well in the triple-negative population, because there's a natural biomarker in that population where a majority of those patients, something over 50 percent, are high expressers of hypoxia inducement factor [HIF-1]," Johnston said. Research has shown the new blood vessel growth mediated by HIF-1 needs VEGF in order to happen.

"Some other VEGF therapies, especially tyrosine kinase inhibitors, have been tried in that setting and have not done well," probably because toxicity caused dose reductions, he said. The "more benign tolerability profile" for tivozanib gets around this, he added.

AVEO ended 2012 with $160 million in cash, "a really strong financial position for a company like ours to be in," Johnston said. "This added cushion [of $50 million] truly wasn't specifically designed to extend the runway," although it does. "We didn't want to run that [$160 million] down too far," he said. "You should always raise cash when you can in these situations, and this seemed like an opportune time."

Johnston said AVEO expects to face an Oncologic Drugs Advisory Committee in the second quarter, and tivozanib bears a PDUFA date of July 28. The latest stock sale "allows us, coming out of ODAC, to have about a year's worth of cash," he said.

In other financing news:

• Alnylam Pharmaceuticals Inc., of Cambridge, Mass., said the underwriters of its previously announced public offering of common stock have exercised their option to purchase an additional 1.2 million shares at the public offering price of $20.13 per share. As a result, the company will issue a total of 9.2 million shares in the offering and will receive aggregate net proceeds, after underwriting discounts and commissions and other estimated offering expenses, of approximately $173.8 million. The offering is expected to close on or about Jan. 22. (See BioWorld Today, Jan. 17, 2013.)

• KaloBios Pharmaceuticals Inc., of South San Francisco, set the terms on its previously disclosed initial public offering. The company had targeted a maximum price of $60 million, and now aims to raise $50 million by offering 3.9 million shares at a price range of $12 to $14. (See BioWorld Today, Oct. 8, 2012.)

• Medicago Inc., of Quebec City, said it gained a $15 million loan from an undisclosed pharma company. The principal of the loan is repayable on Jan. 14, 2014, but can be extended by Medicago at its option until Jan. 14, 2016, and will bear an interest rate of not more than 10 percent per year. Interest on this loan will be paid quarterly. Medicago and its partner are continuing discussions to finalize a licensing agreement, which may also include co-promotion rights of Medicago vaccines in certain markets and, if successfully concluded, will result in the principal of the loan being applied as up-front payments upon the execution of the licensing agreement.

• Pacira Pharmaceuticals Inc., of Parsippany, N.J., priced its private offering of $110 million in aggregate principal amount of its 3.25 percent convertible senior notes due 2019. The company also granted the initial purchasers a 30-day option to purchase up to an additional $10 million in aggregate principal amount of the notes on the same terms and conditions to cover sales in excess.