By Charles Craig

Aviron Inc., developing an influenza vaccine that is inhaled from a nasal spray rather than injected into the bloodstream, raised $15 million in a private placement to Swiss investors to support continued Phase III trials of the treatment.

Biotech Target S.A., of Zurich, purchased 1.7 million shares of Aviron for $8.75 per share, which represented an 8 percent discount to the company's trading price Monday. Biotech Target is part of Biotech Growth S.A., of Zurich, another fund with an equity stake in Aviron. Together the funds own 18 percent of Aviron.

Aviron's stock (NASDAQ:AVIR) closed Tuesday unchanged at $9.50.

The equity financing followed five months after Aviron's initial public offering. The Mountain View, Calif., company's debut in the public markets raised $16 million through the sale of 2 million shares at $8 per share. Aviron has 13.2 million shares outstanding.

Aviron's lead product is a flu vaccine derived from a cold-adapted, modified living influenza virus altered to make it non-virulent. In addition to delivery in a nasal spray, the vaccine differs from currently approved vaccines by activating antibodies against the virus in the mucosal immune system as well as the systemic immune system.

The company has completed Phase III trials of the vaccine in 1,600 children, ages 1 to 6. Results are expected in the third quarter of 1997.

Vera Kallmeyer, Aviron's vice president of corporate development, said the company initially planned to gather results from studies in children over two years old. But investigators said the 1996 flu season was severe enough to generate the data needed to support an FDA marketing application.

"We're using the same vaccine in the children's trial that we used in 92 adults in a challenge trial," she said. Results of the adult studies were reported last year and showed Aviron's vaccine protected 85 percent of those receiving the treatment. The vaccine demonstrated it was more effective than a flu shot, but the difference was not considered statistically significant.

Separate Phase III studies in adults and people over 65 years old will begin in the third quarter of 1997, at the start of this year's flu season.

Aviron expects to have data from trials in all three age groups ready for FDA review in 1998. If approved, the vaccine could be launched for the 1999 flu season.

In the Phase III adult studies, Kallmeyer said, the vaccine will be given to employees at large companies; the endpoints will be reduction in both absenteeism and use of health care services. The trials for older adults will combine Aviron's vaccine spray with the standard flu injection.

The $15 million private placement boosts Aviron's cash position to about $30 million. The money will fund the Phase III flu trials and the start of Phase II studies for evaluation of another intranasal vaccine against parainfluenza, a respiratory virus that causes croup, cough, fever and pneumonia in children.

Aviron said its $2 million-a-month burn rate will increase over the year as additional clinical trials get under way.

Aviron has a collaboration with South Korea-based Sang-A, a subsidiary of the Hanbo Group in Seoul, for manufacturing the vaccine and marketing it in Korea. *