With several Neugene antisense compounds in or nearing clinical trials, AVI BioPharma Inc. raised $22.6 million through a direct equity placement.

"It gives us better than two years worth of cash," said Michael Hubbard, the Portland, Ore.-based company's director of investor relations. "I think for younger biotech companies, that's always a much stronger position when you have technology such as ours that has moved into human clinical trials."

Several unnamed institutional investors agreed to purchase the 6.9 million shares of AVI's common stock at $3.26 per share. Rodman & Renshaw LLC is acting as exclusive placement agent in the transaction. AVI's shares (NASDAQ:AVII) fell 11.6 percent, or 43 cents Tuesday, to close at $3.26.

Known for its pioneering efforts in antisense technology, AVI focuses on treatments for cardiovascular diseases, infectious diseases and cancer. The company's lead Neugene antisense compound is designed to target cell proliferation disorders, such as cardiovascular restenosis, cancer and polycystic kidney disease. Its compounds fight disease by targeting single-stranded RNA viruses, including West Nile virus, hepatitis C virus, dengue virus and Ebola virus. The company was founded in 1980 and went public in 1997.

Twice in the last month, AVI's stock has surged more than 24 percent on preclinical data validating the company's Neugene antisense technology. In mid-October, the company said results from four programs using its technology were successful in combating the Ebola and Marburg viruses and in interrupting the cellular mechanism that causes ricin and anthrax to induce lethal toxicity. Those programs are partially funded by the U.S. Department of Defense and are conducted in collaboration with the U.S. Army Medical Research Institute of Infectious Diseases at Fort Detrick, Md.

And in late October, AVI said preclinical research showed that its Neugene antisense agent inhibited each of the four serotypes of dengue virus, another program that, along with the Ebola, Marburg, ricin and anthrax programs, the U.S. Senate Committee on Appropriations supports as part of the fiscal year 2006 defense spending bill. AVI was allocated $22 million for those programs in early October. The dengue virus data were published in the November 2005 issue of Journal of Virology.

"I think it's very reasonable that if things proceed, we will be in clinical trials within a year" for dengue virus, Hubbard said.

The company also has several other programs. In the summer, studies conducted at the Scripps Research Institute in La Jolla, Calif., showed AVI's compounds were able to inhibit infection by the severe acute respiratory syndrome coronavirus.

In addition, the company began a safety and efficacy clinical trial in late September for AVI-4065 in healthy volunteers and patients with chronic active hepatitis C virus. The company said its product may offer a safer and more efficacious alternative to pegylated interferon and ribavirin, which are not well tolerated by some patients.

Also in September, AVI began patient enrollment in Germany for a Phase II study to evaluate its Resten-MP product in preventing cardiovascular restenosis. The product consists of AVI-4126, also called Resten-NG, delivered intravenously using AVI's microparticle delivery technology. In a different Phase II trial, Resten-NG was injected directly into the coronary artery using a special drug delivery catheter at the time of stent placement. The product demonstrated statistically significant efficacy in preventing restenosis and significantly reduced the neointimal growth that contributes to the failure of angioplasty intervention. Resten-NG targets c-myc, which is believed to regulate the genes that produce the pathology of restenosis.

While "there is certainly room for both products currently," Hubbard said AVI hopes that clinical trials will show that AVI-4126 used with bare-metal stents (Resten-MP) achieves the same efficacy as AVI-4126 used with drug-eluting stents, which are known to cause some long-term complications.

Despite criticism of antisense technology, an area in which there have been several clinical failures, such as Carlsbad, Calif.-based Isis Pharmaceutical Inc.'s Alicaforsen and Affinitak, and Berkeley Heights, N.J.-based Genta Inc.'s Genasense, AVI has remained focused on the science.

"We knew a long time ago that the so-called second-generation antisense was likely to run into some problems," Hubbard said. "We backed up and developed our third-generation Neugene technology for those very reasons."

In lieu of safety concerns with the technology's earlier compounds, AVI designed its Neugene technology, which so far has shown advantages over first- and second-generation antisense in terms of stability, efficacy, specificity, delivery and safety. The company has injected more than 250 people with its Neugene products and so far has not seen any serious adverse reactions.

"Whenever there's a technology that runs into some issues, I don't think people distinguish between the different generations," Hubbard said, adding that he hopes they will once Neugene proves itself.