West Coast Editor

AVI BioPharma Inc. closed a private equity financing for just more than $22 million, selling about 2.9 million shares to institutional investors for $7.50 per share, or about a 10 percent discount to Monday’s closing price. Investors also received a warrant to buy about 585,000 shares at $10.50 each.

Portland, Ore.-based AVI, whose shares (NASDAQ:AVII) closed Tuesday at $8.04, down 32 cents, said the additional year of cash gained from the placement will be used for ongoing clinical trials and operations.

“We have a couple of years of cash right now,” said Alan Timmins, president and chief operating officer of AVI.

The company had about $25.6 million in cash, cash equivalents and short-term securities at the end of the year. It based its fourth-quarter earnings-per-share figures on about 23.2 million shares and posted a net loss of about $26.9 for the year.

The firm’s therapeutic cancer vaccine, Avicine, has completed three Phase II trials in colorectal and pancreatic cancer and is in a Phase III pivotal trial in colorectal cancer.

“That’s a multiyear [project],” Timmins said of the Phase III colorectal trial.

“There’s no other way to say it,” he said. “It’s a long-term study, based on survival, and the estimate [for a completion time] would be in years, not months.”

In the company’s other area of focus, antisense, AVI has its Neugene compounds, including Resten-NG, designed to treat cancer, cardiovascular restenosis and other cell proliferation disorders by inhibiting the production of the oncogene c-myc, a cellular transcription factor. The drug is in Phase II trials for restenosis and in Phase I/II trials for cancer and polycystic kidney disease.

“You’re seeing an increase in appreciation for antisense that started within the last couple of years in the research community,” Timmins said. “They’ve seen what a great tool it is in functional genomics applications,” he added, especially when “researchers have tough or interesting targets” that can’t be approached any other way.

“We’ve had a lot of preclinical success, and we’re working diligently with Medtronic [Inc., of Minneapolis].” Last year, AVI licensed Neugene rights for vascular disease to Medtronic in a potential $100 million deal. (See BioWorld Today, May 24, 2001.)

The Phase II restenosis program “is, in essence, their program,” Timmins told BioWorld Today. “They’re working with the drug in a stent format. It’s a coating, rather than delivered, for example, by balloon catheter. The coated-stent market is a big-ticket item.”