By Randall Osborne

West Coast Editor

With its cancer vaccine in Phase III trials and four antisense drugs lined up for the clinic this year, AVI BioPharma Inc. raised $20 million through a secondary public offering of 3 million shares at $7.25 per share.

Portland, Ore.-based AVI said two months ago it was aiming to sell the shares at $12 each. (See BioWorld Today, June 20, 2000, p. 1.)

"Right now, there's a cloud over antisense," said Denis Burger, AVI's CEO, adding that about 80 percent of the company's research and development budget is devoted to antisense drugs - which he said would become more respected with time.

"Not only have investment bankers lost a lot of money [on antisense], but there've been at least a half-dozen clinical trial failures."

A "perfect comparison" with antisense products, Burger said, is monoclonal antibodies, which were "huge disappointments" in the clinic after showing great initial promise in the 1970s.

"They virtually dropped off the face of the earth," he said, but then came approval in September 1998 of South San Francisco-based Genentech Inc.'s breast-cancer monoclonal antibody, Herceptin (trastuzumab).

"And you saw what happened to Abgenix and Medarex," Burger said. Abgenix Inc., of Fremont, Calif., and Medarex Inc., of Princeton, N.J., are successful makers of monoclonal antibodies in transgenic mice.

"We were the first antisense company in 1980," he said. "It caught fire in the late 1980s, and about that time is when we developed our third-generation NeuGene antisense platform."

NeuGenes are synthetic compounds that block the function of specific genetic sequences involved in disease. Because they are third-generation, Burger said, they lack the drawbacks of earlier-stage antisense drugs.

"The problems are well identified with second-generation agents," he said. "They're negatively charged and stick to everything, with a lot of non-specific activities. [Third generation] is an entirely different chemistry. We have absolute stability, and it's not broken down in the body, so there are no toxic side effects and it's more potent. We gave direct, intravenous bolus injections. We've hit the key pharmaceutical principles that you need to meet the promise antisense has had since the early 1980s."

The NeuGene compound Resten-NG is in Phase II trials for cardiovascular restenosis.

AVI's colorectal cancer vaccine, Avicine, was developed by ImmunoTherapy Corp., a Seattle-based cancer vaccine specialist, which in November 1997 merged with AntiVirals Inc. in a deal worth about $24 million to become AVI BioPharma. (See BioWorld Today, Nov. 7, 1997, p. 1.)

Avicine's target is human chorionic gonadotropin (hCG), a hormone that stimulates fetal development, which also is a tumor antigen on all major types of cancer. Avicine elicits a highly specific immune response to hCG.

Shares in the secondary financing were offered by an underwriting group led by Paulson Investment Company Inc., I-Bankers Securities Inc., and First Colonial Securities Group Inc. After the offering, AVI has 21.4 million shares outstanding.

The company's stock (NASDAQ:AVII) closed Wednesday at $7.187, up 12.5 cents.

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