Aveo Oncology, based in Cambridge, Mass., has appointed Michael P. Bailey as the company’s president, CEO and director, effective immediately. Aveo also said it will eliminate the company’s internal research function, as well as certain corporate support positions, to align corporate resources with the company’s future strategic plans, focusing on advancement of its pipeline in the clinical setting.
The restructuring, which includes departure of Aveo’s chief scientific officer, Jeno Gyuris, Ph.D., will result in a reduction of approximately two thirds of Aveo’s workforce, or 40 positions, leaving the company with 20 full-time positions. The restructuring will be substantially completed by Jan. 15. Aveo expects the related severance and outplacement charges of approximately $4.5 million incurred in connection with the restructuring will be included in its results of operations for the first quarter of 2015.
The reduction in force is expected to reduce compensation expenses annually by approximately $6 million and will reduce Aveo’s facilities requirements by up to 80% of its current space, including the elimination of lab and vivarium needs.
“Since its founding, Aveo has benefited significantly from research, making the decision to eliminate this function particularly difficult,” said Bailey. “With our current pipeline, including AV-380, now past the research stage, it is critical that we focus on streamlining operations by aligning our current resources with our future needs. This change provides us with an opportunity to evaluate biomarker-driven clinical strategies and partnerships to advance our pipeline without continuing to incur internal research expense.”
Bailey joined Aveo in 2010 as its chief commercial officer and, in 2013, he was appointed chief business officer, assuming additional responsibilities including business development, program and alliance management and technical operations. Previously, Bailey was senior vice president, business development and chief commercial officer of Synta Pharmaceuticals.
Bailey, who currently is chief business officer of Aveo, succeeds Tuan Ha-Ngoc, who will become chairman of Aveo’s board of directors. Current board chair Henri A. Termeer will become lead outside director.