AVEO Pharma licenses RON-targeted antibodies to Johnson & Johnson unit for up to $555 million

In a second significant deal this year, US cancer drug developer AVEO Pharmaceuticals (Nasdaq: AVEO) has entered into an exclusive license agreement with Centocor Ortho Biotech, a subsidiary of health care giant Johnson & Johnson (NYSE: JNJ), for the worldwide development and commercialization of its internally-discovered antibodies targeting the RON (Recepteur d’Origine Nantais) receptor.

Initially, AVEO will receive $15 million, the first half of which is as an up-front payment from Centocor Ortho Biotech. Through a separate equity private placement and stock purchase agreement, the second half will come through the sale of newly-issued shares of AVEO common stock to Johnson & Johnson Development Corp at a purchase price of $17.11. Under the terms of the deal, AVEO is also eligible to get up to $540 million in milestone payments based on the achievement of specified development, regulatory and commercialization goals.

Double-digit royalties on sales