Aviron Inc., which postponed its initial public offering (IPO) inAugust because of poor market conditions, completed a scaled-downversion Tuesday, selling 2 million shares at $8 per share for $16million.

When the Burlingame, Calif., company registered for the IPO inJune, it planned to sell 3 million shares at a projected price of $11 to$12 per share. The offering, delayed in late July during a summerslump in biotechnology stocks, was revived in the fall with moremodest expectations.

Underwriters are Roberston, Stephens & Co., Bear, Stearns & Co.Inc. and Hambrecht & Quist LLC, all of New York.

Aviron's stock (NASDAQ:AVIR) debuted Tuesday and closed at $8.

In addition to the 2 million shares sold, South Korean drug makerSang-A Pharm Co. Ltd. will purchase 222,222 shares in a privateplacement at the IPO price, giving Aviron another $1.8 million.

The equity investment by Sang-A, a subsidiary of Seoul-based HanboGroup, is part of a May 1995 agreement between the two companieson development of Aviron's lead product candidate, an influenzavaccine that is administered in a nasal spray.

Sang-A has rights to manufacture the vaccine and to sell it in SouthKorea.

As of June 30, 1996, Aviron had $10 million in cash and reported anet loss of $7.9 million for the first six months of the year.

Despite postponing its IPO in July, Aviron in August proceeded witha Phase III trial of the flu vaccine in children, ages 1 to 6. Enrollmentis on track with about 1,400 children participating to determine if thevaccine can protect them against the virus during the current fluseason. Results are expected next year.

A separate Phase III study for adults is scheduled to begin in 1997.

The vaccine is a cold-adapted, modified living influenza virus alteredto make it non-virulent. In addition to being delivered in a nasal sprayrather than injected into the bloodstream, Aviron's product differsfrom currently approved vaccines by activating antibodies against thevirus in the mucosal immune system as well as the systemic immunesystem.

The flu vaccine was licensed from the University of Michigan in AnnArbor and is being evaluated under a collaborative research anddevelopment agreement with the National Institutes of Health inBethesda, Md.

Two other Aviron vaccines are expected to begin clinical trials in1997. A Phase II study of a parainfluenza vaccine is scheduled to getunder way to test its ability to protect children from the respiratoryvirus, which causes croup, cough, fever and pneumonia.

And two Phase I trials are planned of a vaccine against Epstein-Barrvirus (EBV), which causes infectious mononucleosis, and may be afactor in some cancers and lymphoma. The EBV vaccine is underdevelopment in collaboration with London-based SmithKlineBeecham plc.

However, in its IPO prospectus, Aviron noted Chiron Corp., ofEmeryville, Calif., filed a lawsuit in Superior Court in San Mateo,Calif., in July accusing a former Chiron employee of improperlyproviding Aviron with proprietary information for its EBV vaccinepatents.

Chiron seeks monetary damages and an injunction against using thepatents. Aviron denied the allegations, saying the Chiron informationis not used in any Aviron products. n

-- Charles Craig

(c) 1997 American Health Consultants. All rights reserved.