AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) Moves Ahead with the Restructuring

[[tagnumber 0]] [[tagnumber 1]] [[tagnumber 2]]Yesterday AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO) stock spiked out of the trading range after the company filed an agreement for its antibodies that will bring in an upfront payment and a potential milestone payments over the next years. AVEO looks like it can gain more today.[[tagnumber 1]] [[tagnumber 2]][[tagnumber 5]][[tagnumber 1]] [[tagnumber 2]]AVEO closed the last trading session at $1.70 for a share and a 45.30% increase from the previous session close. The trading volume exploded as well with over 38 million traded shares, though not being a record for the past six months. That breakout of the Bollinger band range made technical indicators reverse sharply and cross critical levels which should attract more traders to the stock and probably make the share price jump even higher to a new six–month high.[[tagnumber 1]] [[tagnumber 2]]There was major news on AVEO yesterday. The company filed an 8–K to announce a new license agreement with Novartis International Pharmaceuticals Ltd. Novartis has received the worldwide exclusive right to develop and sell AVEO‘s proprietary antibody AV–380 as well as related antibodies for treatment and prevention of various diseases.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]There will be an immediate result from the agreement as AVEO will receive a $15 million upfront cash payment, and potentially up to $308 million in milestone payments related to clinical trials, regulatory approvals and sales of any approved products conducted by Novartis.[[tagnumber 1]] [[tagnumber 0]][[tagnumber 16]][[tagnumber 1]] [[tagnumber 2]]That cash inflow will definitely be positive for AVEO which has so far accumulated nearly $500 million in deficit and continues to incur losses. This year, the company completed strategic restructuring that eliminated its internal research function and allocated the entire resources towards searching for partnerships for the further development of its product candidates.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]In May, AVEO also filed a shelf registration statement that covers the issuance of stocks, warrants or debt instruments for up to $100 million. That imposes dilution risks that should be considered, given the low value of AVEO shares.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]]