ALAMEDA, Calif., Feb. 6, 2008 (PRIME NEWSWIRE) -- Avigen, Inc. (Nasdaq:AVGN), a biopharmaceutical company innovating therapeutics for neurological care, today reported financial results for its fourth quarter and full year ended December 31, 2007. At December 31, 2007, Avigen had approximately $78 million in financial assets, including cash, cash equivalents, and available-for-sale securities and restricted investments, compared with approximately $85 million at September 30, 2007 and $71 million at December 31, 2006. More complete financial results are detailed in the financial tables below.
"2007 was very successful for Avigen as we delivered on the aggressive goals set for the company at the beginning of the year," said Kenneth G. Chahine, Ph.D., J.D., Avigen's President and Chief Executive Officer. "At Avigen, we remain focused on our strong applied discovery approach where we identify and develop compounds with attractive safety profiles that are new molecular entities to the U.S. market. Our strategy is designed to mitigate the risk of bringing innovative therapies to U.S. patients. Our lead compounds, AV650 and AV411, were identified through our applied discovery approach in 2006 and were elevated into Phase II clinical development during 2007. In the coming months, the timely and reliable completion of our clinical trials will be our top priority."
AVIGEN 2007 HIGHLIGHTS
* Enrolling subjects in an ongoing European multi-center AV650
Phase II trial at doses up to 900 mg in patients with
spasticity associated with multiple sclerosis
* Enrolling subjects in an ongoing U.S. AV650 Phase II trial
at 450 mg, the currently approved dose level in Europe, in
patients with spasticity associated with spinal cord injury
* Reported positive initial results from an Australian AV411
Phase IIa exploratory clinical trial demonstrating favorable
safety and tolerability at escalating doses in patients.
The study provided valuable insight into the responsiveness
of patients suffering from neuropathic pain and will be used
to set the target dosage range in larger Phase II studies
* Initiated U.S. clinical development for AV411 and continue
to enroll subjects in an ongoing Phase I maximum tolerated
dose study which will also assess the effect of food on drug
metabolism
* Completed a public offering of Avigen common stock grossing
$30.6 million before payment of commissions and other expenses
* Successful launch of tolperisone in Germany by Sanochemia
Pharmazeutica AG, marketed by Orion Corporation under the
brand name Viveo(r). Sanochemia is Avigen's partner and
manufacturer of AV650 (tolperisone) for the North American
market.
Financial Results
Avigen reported a net loss of $25.2 million, or $0.90 per share, for the year ended December 31, 2007, compared to a net loss of $24.3 million, or $1.03 per share, in 2006. The 2006 period included $3.0 million of in-license fees related to the acquisition of North American rights to AV650.
During 2007, Avigen completed a public offering of 4.4 million shares of its common stock and raised $28.5 million after underwriter fees and expenses. In 2006, Avigen issued 3.9 million shares of its common stock through a private placement and raised $19.4 million, net of expenses.
Avigen reported no revenue for 2007 compared to revenue of $103,000 for 2006. The 2006 revenue represented income from Avigen's participation with the University of Colorado on a grant funded by the National Institutes of Health.
Research and development expenses for 2007 and 2006 were $20.8 million and $15.2 million, respectively. This increase reflects approximately $4.9 million in higher external development expenses in 2007 associated with the planning and operation of multiple clinical trials for AV650 and AV411 during the year.
General and administrative expenses were $8.5 million and $8.9 million for 2007 and 2006, respectively. The decrease is primarily due to lower personnel-related costs, partially offset by higher non-cash expense for share-based compensation during 2007.
In-license fees of $3.0 million in 2006 represented a payment in connection with Avigen's in-license of the North American development and commercial rights to AV650. There were no in-license fees in 2007.
Impairment losses related to long-lived assets were $450,000 in 2006 and represented an estimated asset retirement obligation for one of the company's building leases that is scheduled to expire in May 2008. There was no change in the estimate of this obligation during 2007. Avigen currently subleases a significant portion of the facility and expects that the expiration of the master lease and subleases will reduce its annual overhead costs by approximately $500,000.
Net interest income and other expenses were $3.4 million and $2.6 million in 2007 and 2006, respectively. The 2007 period benefited from a higher average balance in Avigen's investment portfolio as a result of the proceeds from the common stock offering completed during the year as well as a general increase in market interest rates. Sublease income was $703,000 and $565,000, respectively, in 2007 and 2006, and directly reduced the company's ongoing operating expenses for leased facilities.
Fourth Quarter Results
For the three months ended December 31, 2007 and 2006, Avigen reported a net loss of $6.7 million, or $0.23 per share, and $5.7 million, or $0.23 per share, respectively. The 2006 period included $450,000 of impairment losses related to long-lived assets described above.
Research and development expenses for the fourth-quarter of 2007 and 2006 were $5.7 million and $4.0 million, respectively. This increase primarily reflects approximately $1.3 million in higher external development expenses in the 2007 period and tracks directly with the increase in number and complexity of ongoing clinical trial activities for AV650 and AV411.
General and administrative expenses for the fourth-quarter of 2007 and 2006 were $2.1 million and $2.2 million, respectively.
Net interest income and other expenses were $877,000 for the fourth quarter of 2007 compared to $741,000 for the same period in 2006. Sublease income was $180,000 for the fourth quarter of 2007 compared to $141,000 for the same period in 2006, reflecting additional small subleases entered into during 2007.
Avigen's operating expenses for 2007 were in line with Management's expectations and reflected a significant increase in support for clinical development activities during the year. Operating expenses are expected to continue to increase in 2008 to support ongoing clinical trials and additional planned clinical development activities as the company's programs progress. The company believes its financial resources will be able to fund its planned operating expenses for at least two years.
Conference Call Information
Avigen management will host a conference call and webcast today, Wednesday, February 6, 2008, at 1:00 p.m. EST (10:00 a.m. PST). This webcast can be accessed from the Avigen website at www.avigen.com. The conference call can be accessed by dialing 888-713-4205 for domestic callers and 617-213-4862 for international callers. The participant passcode is 16083697. A web replay will also be available following the call on the company's website until it releases its first quarter 2008 financial results. Rebroadcast of the call will be available approximately one hour after the live call by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers. The passcode is 57208063.
About Avigen
Avigen is a biopharmaceutical company focused on developing and commercializing small molecule therapeutics to treat serious neurological disorders, including neuropathic pain and neuromuscular spasm and spasticity. Avigen's strategy is to complete the requirements of clinical development for each of the candidates in its product pipeline, and continue to look for opportunities to expand its pipeline through a combination of internal research, acquisitions, and in-licensing, with the goal of becoming a fully integrated commercial biopharmaceutical company that remains committed to its neurology products. Avigen is currently developing AV650 for spasticity and neuromuscular spasm and AV411 for neuropathic pain. Additionally, the company is advancing AV513, a novel therapy for the treatment of multiple bleeding disorders, including hemophilia A and B, toward clinical trials. For more information about Avigen, consult the company's website at www.avigen.com.
The Avigen, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=2981
Statement under the Private Securities Litigation Reform Act
The statements in this press release relating to Avigen's expectations regarding the timely and reliable completion of its clinical trials, its expectations regarding the use of data from the completed AV411 Phase IIa trial to design larger Phase II studies, it expectations regarding the current U.S. Phase I trial of AV411, its expectations regarding the reduction of annual overhead costs related to expiring 2008 lease agreements, its expectations regarding its 2007 operating expense levels, its expectations regarding how long its financial resources will last, its expectations regarding its approach to smart drug development, and its goal of becoming a fully integrated commercial biopharmaceutical company remaining committed to its neurology products are forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others, the fact that development of small molecule therapeutics and other therapeutic discovery and development is a time- and resource-intensive process, which may result in the expenditure of a significant amount of time and resources with no progress towards clinical trials or marketable product resulting from the effort; the risk that Avigen will not be able to obtain regulatory approvals for its drug products, which is required prior to marketing drug products; and the risk that early positive preclinical and clinical results will not guarantee that the potential products will ultimately be effective in treating the indications for which they are developed, or exhibit the unique properties they appear to possess. In addition, there are many other risks and uncertainties inherent in the development of drug products. Other risks and uncertainties relating to Avigen are detailed in reports filed by Avigen with the Securities and Exchange Commission, including Avigen's Quarterly Report on Form 10-Q for the period ended September 30, 2007, under the caption "Risks Related to Our Business" in Item 2 of Part I of that report, which was filed with the SEC on November 8, 2007.
AVIGEN, INC.
SELECTED FINANCIAL INFORMATION
STATEMENTS OF OPERATIONS
(In thousands, except shares
and per share information)
Three months ended Year ended
------------------------ ------------------------
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2007 2006 2007 2006
------------------------ ------------------------
(unaudited) (unaudited) (a)
Revenue $ -- $ -- $ -- $ 103
Operating
expenses
Research and
development 5,669 3,953 20,818 15,219
General and
administrative 2,119 2,217 8,496 8,860
Impairment
loss
related to
long-lived
assets -- 450 -- 450
In-license fees -- -- -- 3,000
----------------------------------------------------
Total operating
expenses 7,788 6,620 29,314 27,529
Loss from
operations (7,788) (6,620) (29,314) (27,426)
Sublease income 180 141 703 565
Net interest
income and
other expense 877 741 3,447 2,605
----------------------------------------------------
Net loss $ (6,731) $ (5,738) $ (25,164) $ (24,256)
====================================================
Basic and
diluted net
loss per common
share $ (0.23) $ (0.23) $ (0.90) $ (1.03)
====================================================
Shares used in
basic and
diluted net
loss per
common share
calculation 29,637,596 25,072,576 27,962,202 23,509,378
====================================================
CONDENSED BALANCE SHEETS
Dec. 31 Dec. 31
2007 2006
------------------------
(In thousands) (unaudited) (a)
Cash, cash equivalents and
available-for-sale securities $ 68,686 $ 60,340
Restricted investments - current 428 8,000
Accrued interest and other current assets 1,495 1,097
------------------------
Total current assets 70,609 69,437
Restricted investments 9,000 2,428
Property and equipment, net 1,263 2,709
Deposits and other assets 197 443
------------------------
Total assets $ 81,069 $ 75,017
========================
Current liabilities 3,441 9,970
Long-term obligations 7,796 1,570
Stockholders' equity 69,832 63,477
------------------------
Total liabilities and stockholders' equity $ 81,069 $ 75,017
========================
(a) Derived from audited financial statements.