By Mary Welch
Avigen Inc. completed a $12 million private placement of its common stock with overseas investors, bringing to about $20 million the amount the Alameda, Calif., company has raised in the past year.
Avigen will use the funds to underwrite clinical trials of a hemophilia B treatment using its gene therapy delivery system. The system employs adeno-associated viral (AAV) vectors, which are used to deliver genes in vivo to correct genetic deficiencies or attack invading pathogens. Avigen filed an investigational new drug application in November and expects Phase I trials to start this year.
¿We were really pleased because it is a relatively tough market, but we found a lot of interest internationally,¿ said Thomas Paulson, chief financial officer. ¿In Hong Kong, there seems to be a lot of interest in establishing a general hi-tech presence, not just for biotech. They want to catch up to the U.S. and have a technology infrastructure that supports investing as well as potential collaborative work.¿
This latest round involved placement agents in Japan, Hong Kong and Europe. Some 2 million shares were sold at around $6 apiece, which was the market price. ¿There was no discounting,¿ Paulson emphasized.
The shares were sold in two separate closings. There now are 12.1 million Avigen shares outstanding.
Last August, Avigen raised about $2.8 million in a round of financing done primarily with European investors. In December, the company added $5.8 million to its coffers with a private financing round performed largely with U.S. investors. The company¿s fiscal year ends June 30.
¿So for fiscal year 1999, we raised about $20 million from investors around the world,¿ Paulson said. ¿I think one reason we¿ve been successful is that our technology has captured their imaginations and they are excited that we¿re applying the technology to the hemophilia area.
¿This should last us to the end of 2000,¿ he said.
Avigen¿s gene therapy products are based on gene delivery systems called vectors. AAV vectors are derived from AAV, a common non-pathogenic human virus. AAVs infect most people, but do not cause disease. It¿s a human parvovirus, with a single-stranded, 4.7 kilobase DNA genome. Its viral DNA integrates in the chromosome, settles down in a state of latency and waits for the arrival of a pathogenic virus. To produce an AAV vector, the virus is modified by removing the viral genes and replacing them with genes for therapeutic proteins in the nucleus of the cells.
Avigen is preparing to begin clinical trials in hemophilia B as soon as the FDA gives the go-ahead. Manufacturing scale-up is under way. The trial will be run at Children¿s Hospital in Philadelphia. It will test Avigen¿s approach, which involves using a single intramuscular injection of an AAV vector containing the gene for coagulation factor IX.
Data from a study using a canine hemophilia model showed a single intramuscular administration resulted in long-term production of factor IX in a dose-related manner.
¿We have had success in treating every animal, and each has responded positively in a clotting time close to near-normal levels. One dog has gone two years and still is producing near-normal levels of blood clotting,¿ he said.
Not far behind are clinical tests for hemophilia A, a market five times larger than hemophilia B, Paulson said.
Since its founding in 1992, Avigen has touted its technology as having a number of applications, including treatment of brain tumors, anemia, sickle cell anemia, Parkinson¿s disease, glioma and Hurler¿s disease. However, now the company is focusing almost exclusively on hemophilia, Paulson said.
¿The disease has the most clearly defined proof of principle for gene therapy ever demonstrated,¿ he said. ¿In addition, you don¿t have to deal with long-term survival or disease. And the gene is well characterized.¿
Avigen realizes that as its technology advances through clinical trials, it becomes more attractive to potential partners. ¿We don¿t have any partners as of yet,¿ Paulson said. ¿But we see that as a definite possibility. For the right terms we will entertain the idea of partnering, and as you go through preclinical and clinical trials the value of the partnership goes up correspondingly.
Avigen¿s stock (NASDAQ:AVGN) closed Tuesday at $5.25, down 12.5 cents. n