AVEO Enters into Worldwide License and Development Agreement with Schering-Plough for AV-299, AVEO’s Novel Anti-HGF Antibody

AVEO Pharmaceuticals, Inc.

AVEO Enters into Worldwide License and Development Agreement with Schering-Plough for AV-299, AVEO’s Novel Anti-HGF Antibody

April 4, 2007

Company to Participate in Development and Commercialization

CAMBRIDGE, MA April 4, 2007 – AVEO Pharmaceuticals, Inc., a biopharmaceutical company focused on the discovery and development of novel cancer medicines, today announced it has entered into an exclusive worldwide agreement with Schering-Plough Corporation to develop and commercialize AV-299. AV-299, an antibody discovered by AVEO, is a highly potent antagonist of hepatocyte growth factor/scatter factor (HGF/SF) which has demonstrated excellent efficacy in preclinical models of human cancer. It is expected to enter clinical trials in early 2008. AVEO’s Human Response Prediction™ (HRP™) platform will be utilized to guide the clinical development of AV-299.

Under the terms of the agreement, AVEO will have primary responsibility for clinical development of AV-299 through proof-of-concept in man. AVEO will also apply its HRP™ platform during a multi-year translational research program designed to discover biomarker profiles of patients most likely to benefit from treatment with AV-299. Results of this research will be used to design the optimal clinical development plan for AV-299. AVEO retains the option to co-promote AV-299 in the United States for certain oncology indications.

In consideration of the exclusive worldwide license, AVEO will receive a $7.5 million upfront payment and a $10 million equity investment from Schering-Plough. Schering-Plough will fund all research and development expenses. Milestone payments for the successful development and commercialization of AV-299, if all approvals in multiple indications and all sales milestones are achieved, could exceed $460 million. Upon commercialization, AVEO is eligible to receive royalties on net sales. The transaction is subject to clearance under the Hart, Scott, Rodino Antitrust Improvements Act (HSR).

“AV-299 has the potential to be a breakthrough cancer medicine, addressing large unmet needs across multiple tumors, given its mechanism of action targeting the HGF/c-Met pathway” said Tuan Ha-Ngoc, AVEO’s President and CEO. “AVEO sought a strategic partner early to maximize the breadth and depth of AV-299’s development program. Schering-Plough is the ideal partner because of their biopharmaceuticals experience, commercial capabilities and their identification of oncology as a targeted strategic area. Moreover, Schering-Plough recognized our corporate desire to continue to lead the development of AV-299 through proof of concept in man and to retain an option to co-promote the product in the U.S. Both of these elements are very important for us as we continue to advance our two lead clinical programs, AV-951 and AV-412.”

About AV-299 Program

AV-299 is a highly potent antagonist of hepatocyte growth factor/scatter factor (HGF/SF), which has demonstrated excellent efficacy in preclinical models of human cancer. The HGF/c-Met pathway is frequently deregulated in different types of human cancers and is thought to play an important role in regulating tumor growth, invasion and metastasis. Utilizing its proprietary technology platform, AVEO has developed substantial evidence of the importance of the HGF pathway in tumor maintenance. The diverse biological roles of the HGF/c-Met pathway make the selection of patients most likely to respond to anti-HGF therapies especially difficult. To guide the clinical development of AV-299, AVEO is using its proprietary preclinical models of human cancer to identify specific populations of tumors in which the HGF/c-Met pathway plays a critical role in tumor maintenance, as opposed to those in which the pathway is activated but not essential. AVEO’s Human Response Prediction™ platform provides AVEO with unique insight into the biology of anti-HGF therapies, and positions it to move AV-299 forward into clinical development.

AVEO’s AV-299 program exemplifies the progress AVEO has made in discovering drugs that target functionally-relevant tumor maintenance genes identified and validated by AVEO in its proprietary in vivo cancer models.

About AVEO’s Human Response Prediction™ Platform

AVEO’s Human Response Prediction platform is based on AVEO’s proprietary, genetically-defined mouse models of human cancer. Each of these models is engineered to contain signature genetic mutations that are present in human disease. Beyond these cancer-initiating engineered mutations, the resultant tumors acquire common and distinct spontaneous mutations during tumor progression, providing additional natural genetic variation more akin to the range of genetic heterogeneity encountered across different primary human tumors. The tumor-to-tumor genetic variation in the system provides the opportunity to identify genetic correlations between responding and non-responding tumor populations, and to apply such genetic profiles in clinical development.

About AVEO

AVEO is a private biopharmaceutical company focused on the discovery and development of novel cancer therapeutics. The company utilizes its proprietary, genetically-defined cancer models for the identification and validation of novel cancer targets, and has begun to build an impressive portfolio of drug discovery and development programs around these high-value targets. AVEO also uses its Human Response Prediction™ Platform to identify genetic profiles that correspond with patient responsiveness. AVEO expects to commence Phase 2 clinical studies by mid-2007 for AV-951, its oral, second-generation VEGF receptor inhibitor and most advanced clinical program. AV-412, AVEO’s EGFR/HER2 inhibitor, is currently in Phase I clinical trials. AV-299, a novel anti-HGF mAb, is currently being manufactured by XOMA under a supply agreement in anticipation of entering the clinic in early 2008. AVEO is located in Cambridge, Massachusetts. For more information, please visit the company's website at www.aveopharma.com.

Contacts

AVEO Pharmaceuticals, Inc.
Tuan Ha-Ngoc
President & CEO
thangoc@aveopharma.com
(617) 299-5969

Noonan Russo (Media)
Benjamin Carmichael
Account Executive
Benjamin.Carmichael@eurorscg.com
(212) 845-4242

Noonan Russo (Media)
Greg Geissman
Director of Media Relations
Greg.Geissman@eurorscg.com
(619) 814-3510