Demand for Avigen Inc. pushed the gene therapy company's initialpublic offering (IPO) up 200,000 shares to 2.5 million, generating$20 million in another successful showing for a biotechnology firmspecializing in genomics-related drug development.
Alameda, Calif.-based Avigen Inc.'s IPO was priced at $8, whichwas midway in the projected range of $7 to $9 per share. The stock(NASDAQ:AVGN) debuted two days ago and closed Thursday at$11.75, a 47 percent increase.
Companies practicing genomics have been well received on WallStreet for the past several years. Although Avigen may havebenefited from the enthusiasm, its IPO differs from others in twoareas.
Avigen does not have a drug candidate in clinical trials and it has yetto sign a corporate partnership with a big pharmaceutical firm.Achievement of at least one of those milestones has been touted as anessential part of going public.
Millennium Pharmaceuticals Inc., of Cambridge, Mass., andMicrocide Pharmaceuticals Inc., of Mountain View, Calif., recordedsuccessful recent public market debuts. And both had severalpotentially lucrative pharmaceutical alliances under way to helpsupport their IPOs.
Millennium, a disease gene discovery company, raised more than $50million in its offering earlier this month. The stock closed $7 higherthan the $12 per-share IPO price on opening day.
Microcide _ whose research includes decoding bacterial genomes fornew strategies in overcoming the microbes' deftness in resistingantibiotics _ generated $35 million a week ago. On the first day oftrading, the company's shares closed $4.50 higher than the $14 IPOprice.
Avigen is developing gene therapies to treat a variety of diseasesincluding cancer, metabolic disorders and blood cell deficiencies.Company officials have described their research as a means ofapplying the enormous amount of genetic information beinggenerated worldwide.
Avigen uses adeno-associated viral vectors to deliver genes in vivo tocorrect genetic deficiencies or attack invading pathogens.
Its most advanced programs are in preclinical studies for treatment ofbrain tumors and anemia. For brain tumors, Avigen delivers athymidine kinase gene into cancer cells where it expresses an enzymethat makes the tumor more susceptible to the antiviral drug,ganciclovir. In anemia, the company uses its adeno-associated viralvectors for delivering intramuscularly the gene that produceserythropoietin, which is a protein that boosts red blood cellproduction.
When Avigen registered for its offering in April 1996, the companyanticipated selling 2.3 million shares to raise about $18 million. Atthe end of 1995 Avigen had $74,000 in cash and a net loss of $1.6million for the last six months of the year. (See BioWorld Today,April 23, 1996, p. 1.)
Following the IPO, Avigen has seven million shares outstanding.Underwriters Wedbush Morgan Securities, of Los Angeles, andSands Brothers & Co. Ltd., of New York, have options to buyanother 375,000 shares to cover overallotments. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.