By Frances Bishopp

Staff Writer

Aviron Inc., whose stock has surged approximately 84 percent since the news of its Phase III clinical trial of its influenza vaccine hit the streets two weeks ago, has filed for a public offering of 2.5 million common shares of common stock.

The offering could raise approximately $60 million for the Mountain View, Calif.-based company, which focuses on vaccine technology. Aviron's stock (NASDAQ:AVIR) closed Monday at $23.75, down $1.25. The stock was trading a little over $13 when the Phase III results were reported on July 15, 1997.

The offering is being managed by an underwriting group led by Robertson, Stephens & Co., of San Francisco; Bear, Stearns & Co. Inc., of New York; and Hambrecht & Quist L.L.C., of San Francisco.

Aviron's vaccine, which is administered in a nasal spray, was shown to be effective at preventing flu in healthy, young children. The attenuated (weakened) live-virus vaccine provided 93 percent protection against influenza. Only one percent of 1,070 children who received the vaccine developed culture-confirmed influenza during last year's flu season vs. 18 percent of 532 children the same age who received placebo.

A live virus vaccine exposes the immune system to the weakened virus, which is sufficiently infectious to stimulate a lasting immune response to the natural (or wild type) virus. All of the live virus vaccines in use today are strains derived from natural infections of humans.

Aviron, which collaborated with the National Institute of Allergy and Infectious Diseases on the vaccine, will file a product license application (PLA) with the FDA before mid-year 1998. The PLA will include the use of the vaccine for children and healthy adults.

Aviron, which had originally postponed its initial public offering (IPO) in August 1996 due to poor market conditions, completed the IPO in November 1996, raising $16 million. The company sold 2 million shares at $8 per share.

In addition to the 2 million shares sold, South Korean drug maker Sang-A Pharm Co. Ltd., of Seoul, purchased 222,222 shares in a private placement at the IPO price, giving Aviron another $1.8 million.

As of June 30, 1997, Aviron had $22.3 million in cash and a net loss of $10.6 million for the first six months of 1997.

After the offering, Aviron will have approximately 15.7 million shares outstanding.

Aviron Developing Other Vaccines

Recently, Aviron filed an investigational new drug application for a live, intranasal vaccine for parainfluenza virus type 3 for prevention of croup and will initiate Phase II clinical trials for this vaccine by the end of 1997,

Aviron also is developing a subunit vaccine for Epstein-Barr virus in collaboration with SmithKline Beecham plc, of London, which is expected to enter Phase I/II clinical trials in Europe by the end of 1997.

In addition, Aviron is using its "rational vaccine design" technology to discover new live virus vaccines. Rational vaccine design involves the deletion or modification of virulence proteins, the alteration of the virus' genetic control signals to slow down its replication and the addition of antigenic information to enhance the virus' stimulation of the immune system.

Vera Kallmeyer, chief financial officer at Aviron, told BioWorld Today the company anticipates using the money primarily for the clinical trials, manufacturing and marketing of its cold-adapted flu vaccine and for research and development of its other vaccine programs.

"This new funding will last us until mid-1999," Kallmeyer said. *