By Matthew Willett
Avigen Inc. filed a shelf registration statement with the SEC for the sale of various securities worth up to $120 million.
Company officials say the registration is designed to preserve flexibility so they can take advantage of financing opportunities when they arise.
Avigen's stock (NASDAQ:AVGN) dropped $3.56 Wednesday, closing at $39.063.
"The reason for the registration of a dollar amount is to give us latitude and flexibility for whatever financial vehicle makes sense for us," Vice President of Finance and Chief Financial Officer Thomas Paulson said. "We did a financing earlier this year during a time when the market was moving up and down rather dramatically. A few weeks would have made a difference in terms of pricing the deal."
That financing, proposed in February, priced 1 million shares at $26 per share in April, grossing $26 million.
The Alameda, Calif., company also placed common stock and warrants worth $40 million privately last November with a group of American and European investors, and a previous private placement in May 1999 yielded the company $12 million.
Paulson said the company now holds its best cash position ever, with $75 million in the bank, but that future needs dictate being prepared. Clinical development costs loom for the company as initial data from early-stage research comes in.
"We're trying to be proactive in terms of moving the company forward," he said. "Our success, though it's early, is encouraging for the future, and we'd like to have a financial deal available if investor demand is there."
The company has several programs in the clinic, including a Phase I trial of Coagulin-B, a hemophilia B therapeutic the company has tested with eight patients at the Children's Hospital of Philadelphia and Stanford University. Five of six patients in that trial showed evidence of successful transferal of the gene for Factor IX.
"We hope to be able to expand the trial next year, and funding will be needed for that," Paulson said. "Soon after that we'll begin working on hemophilia A, a more common form of hemophilia, and we hope to file an IND on that next year."
Paulson told BioWorld Today the company also is developing a treatment for Gaucher's disease, as well as a Parkinson's disease therapeutic.
According to Paulson, the next step for the company is to make its development process multi-dimensional instead of linear.
"In effect what we'd like to do is expand these programs on multiple fronts," he said. "We've managed our resources prudently, moving one program and then another in a sort of sequential fashion. With added financing, we'd like to move on multiple fronts and do many programs simultaneously."