Avigen Inc., a four-year-old gene therapy company, is going public inan effort to raise more than $18 million for development of its genedelivery technology, whose most advanced applications are inpreclinical testing for treatment of brain tumors and anemia.
The Alameda, Calif., company registered for an initial public offering(IPO) of 2.3 million shares at a projected price range of $7 to $9,which would generate gross proceeds of between $16.1 million and$20.7 million. Underwriters are Wedbush Morgan Securities, of LosAngeles, and Sands Brothers & Co. Ltd., of New York.
At the end of 1995, Avigen said it had $74,000 in cash and reported anet loss of $1.6 million for the last six months of the year. Followingthe IPO, the company will have about 6.8 million shares outstanding.
Avigen uses adeno-associated viral vectors for delivery of genes invivo to both dividing and non-dividing cells to treat diseases. Adeno-associated viruses (AAV) infect most people, but do not causedisease. Their only link to adenoviruses, which cause the commoncold and other more serious infections, is by name _ a result of beingfirst isolated as a contaminant in preparation of adenoviruses.
While AAVs may be considered safer and more efficient than othervectors _ such as adenoviruses and retroviruses _ in deliveringtherapeutic genes to the nuclei of cells, producing large enoughquantities of AAV vectors was a challenge.
In its prospectus, Avigen said it solved that problem by developing aproprietary production method using key genes from adenoviruses,rather than the entire pathogen, to make AAV vectors, which needhelp from another virus to replicate. Avigen's manufacturing processis designed to eliminate the danger of contamination of the vectors byinfectious adenoviruses.
The AAV vectors produced contain the therapeutic human gene inplace of their two viral genes and, when delivered in vivo, deposit theDNA sequence in the nucleus of the cells. Avigen also has a targetedvector integration (TVI) system designed to insert larger pieces ofDNA directly into a specific site on a chromosome.
Avigen's two most advanced initial programs, which are in thepreclinical stage, target potential gene therapy treatments for braintumors and anemia.
For brain tumors, a thymidine kinase (TK) gene is delivered to thecancer cells where it expresses the TK enzyme, which makes thetumor more susceptible to the approved antiviral drug, ganciclovir.The AAVs either are injected directly into the tumor or appliedduring surgery.
In the treatment of anemia, AAV vectors containing a gene forerythropoietin are administered intramuscularly to boost productionof red blood cells.
Among the other AAV gene therapy programs in the research stageare those aimed at liver and prostate cancer and hemophilia. Thecompany's TVI gene therapy research is directed at stem cells fortreatment of blood and infectious diseases.
Avigen's officials have described their DNA delivery business as away of making use of the enormous amount of gene discoveryinformation being developed by genomics researchers.
President and CEO John Monahan was vice president of research anddevelopment at Somatix Therapy Corp., of Alameda, Calif., prior tojoining Avigen in 1992. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.