Avi Biopharma Inc - Prospectus filed pursuant to Rule 424(b)(5) (424B5)
March 31 2008 - 6:05AM
Edgar (US Regulatory)
PROSPECTUS SUPPLEMENT NO. 2
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Registration
No. 333-138299
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(To Prospectus Dated November 22, 2006)
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Rule 424(b)(5) Prospectus
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528,848
Shares
AVI
BioPharma, Inc.
Common
Stock
This prospectus supplement
supplements the prospectus filed by AVI BioPharma, Inc. on November 22,
2006 as supplemented on December 13, 2007.
This
is an offering of $696,016.85
of our common stock. We are
offering all of the shares of common stock pursuant to this prospectus
supplement. Our common stock is quoted on the Nasdaq Global Market under the
symbol AVII. The last reported sale price of the common stock on March 27, 2008 was $1.77 per share.
Investing
in our common stock and warrants involves risks. See Risk Factors beginning
on page S-4 of the accompanying prospectus and Forward-Looking
Information on page S-2 of
this prospectus supplement.
This
is supplement no. 2 to the prospectus dated November 22, 2006.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the accuracy or adequacy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
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Per Share
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Total
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Public Offering Price
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$
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1.3161
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$
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696,016.85
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Proceeds, before expenses, to AVI BioPharma
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$
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1.3161
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*
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$
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696,016.85
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*
This price represents the price per share for shares of our common stock issued
pursuant to the terms of the Agreement and Plan of Merger by and among the
Company, EB Acquisition Corp., a Delaware corporation, and Ercole Biotech, Inc.
a Delaware corporation, and Stockholder Representative dated March 12,
2008.
March 28, 2008
You
should only rely on the information contained in, or incorporated by reference
in, this prospectus supplement and the accompanying prospectus. We have not
authorized anyone to provide you with different information and if anyone
provides you with different or additional information, you should not rely on
it. We are not making an offer of these securities in any state where the offer
of these securities is not permitted. You should not assume that the
information contained in this prospectus supplement, the accompanying
prospectus and the documents incorporated by reference is accurate as of any
date other than the dates of the specific information.
TABLE OF
CONTENTS
Prospectus
Supplement
Unless we have indicated, or the context otherwise requires, references
in this prospectus supplement to AVI BioPharma, we, us, or similar terms,
are to AVI BioPharma, Inc.
S-1
ABOUT THIS
PROSPECTUS SUPPLEMENT
We are providing this information to you about this offering of common
stock in two parts. The first part is this prospectus supplement, which
provides the specific details regarding the offering. The second part is the
accompanying base prospectus, which provides general information. Generally,
when we refer to this prospectus, we are referring to both documents
combined. Some of the information in the base prospectus may not apply to this
offering.
You should also read and consider the information in the documents that
we have referred you to in Where You Can Find More Information on page S-6
of this prospectus supplement. The information incorporated by reference is
considered to be part of this prospectus supplement, and information that we
file later with the SEC will automatically update and supersede this
information, except for any information updated or superseded by information
contained directly in the prospectus or this prospectus supplement.
If information in this prospectus supplement is inconsistent with the
accompanying prospectus, you should rely on this prospectus supplement.
FORWARD-LOOKING
INFORMATION
This prospectus supplement and the accompanying prospectus and the
information incorporated by reference herein and therein contain
forward-looking statements regarding our plans, expectations, estimates and
beliefs. Our actual results could differ materially from those discussed in, or
implied by, these forward-looking statements. Forward-looking statements are
identified by words such as believe, anticipate, expect, intend, plan,
will, may, and other similar expressions. In addition, any statements that
refer to expectations, projections or other characterizations of future events
or circumstances are forward-looking statements. We have based these
forward-looking statements largely on our expectations. Forward-looking
statements in this report include, but are not necessarily limited to, those
relating to:
·
our
intention to introduce new products;
·
receipt
of any required FDA or other regulatory approval for our products;
·
our
expectations about the markets for our products;
·
acceptance
of our products, when introduced, in the marketplace;
·
our
future capital needs;
·
results
of our research and development efforts, and
·
success
of our patent applications.
Forward-looking statements are subject to risks and uncertainties,
certain of which are beyond our control. Actual results could differ materially
from those anticipated as a result of the factors described in the Risk
Factors and detailed herein and in our other Securities and Exchange
Commission filings, including among others:
·
the
effect of regulation by the FDA and other governmental agencies;
·
delays
in obtaining, or our inability to obtain, approval by the FDA or other
regulatory authorities for our products;
·
research
and development efforts, including delays in developing, or the failure to
develop, our products;
·
the
development of competing or more effective products by other parties;
·
the
results of pre-clinical and clinical testing;
·
uncertainty
of market acceptance of our products;
·
problems
that we may face in manufacturing, marketing, and distributing our products;
·
our
inability to raise additional capital when needed;
·
delays
in the issuance of, or the failure to obtain, patents for certain of our
products and technologies; and
·
problems
with important suppliers and business partners.
Because of these risks and uncertainties, the forward-looking events
and circumstances discussed in this prospectus supplement or incorporated by
reference might not occur. Factors that cause actual results or conditions to
differ from those anticipated by these and other forward-looking statements
include those more fully described in the Risk Factors section and elsewhere
in this prospectus supplement.
S-2
Except
for our ongoing obligations to disclose material information as required by the
federal securities laws, we undertake no obligation to release publicly any
revisions to any forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events. All
of the above factors are difficult to predict, contain uncertainties that may
materially affect our actual results and may be beyond our control. New factors
emerge from time to time, and it is not possible for our management to predict
all of such factors or to assess the effect of each factor on our business.
About AVI
BioPharma, Inc.
We are a biopharmaceutical company developing therapeutic products
principally based on third-generation NEUGENE® antisense technology. Our
principal products in development target life-threatening diseases, including
cardiovascular, infectious, and genetic diseases. Currently approved drugs or
other therapies for these diseases often prove to be ineffective or produce
undesirable side effects. Our pre-clinical and clinical studies indicate that
our technology may lead to development of drugs that we believe offer more
effective treatment options with fewer side effects than currently approved
products. A patent estate including 186 patents (foreign and domestic) issued
or licensed to us and 192 pending patent applications (domestic and foreign)
protects our technologies. Our lead product candidate, Resten-NG®, which is
targeted at cardiovascular disease, addresses a market we believe may exceed $3
billion worldwide.
Our
executive offices are located at One S.W. Columbia, Suite 1105, Portland,
OR 97258. Our telephone number is (503) 227-0554, fax number is (503)
227-0751, and our website address is www.avibio.com. The information on our
website is not incorporated by reference into this prospectus.
This prospectus includes our trademarks and registered trademarks,
including NeuGene®, Avicine®, Resten-NG®, Resten-CP, and Oncomyc-NG. Each
other trademark, trade name or service mark appearing in this annual report
belongs to its holder.
S-3
PROSPECTUS
SUPPLEMENT SUMMARY
The following information supplements, and should be
read together with, the information contained or incorporated by reference in
other parts of this prospectus supplement and in the accompanying prospectus.
This summary highlights selected information from this prospectus supplement
and the accompanying prospectus to help you understand our business. Because
the following is only a summary, it does not contain all of the information
that may be important to you. You should carefully read this prospectus
supplement and the accompanying prospectus before deciding whether to invest in
our common stock. You should pay special attention to the Risk Factors
section beginning on page
S-4
of the accompanying prospectus to determine whether an
investment in our common stock is appropriate for you.
The
Offering
Common
stock offered by us
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528,848 shares
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Common
stock to be outstanding after the offering
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70,957,958
shares
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Use
of proceeds
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The
shares are being issued as payment by the Company as a result of the
acquisition of Ercole Biotech, Inc. in satisfaction of various
employment claims, severance agreements and other obligations of Ercole
Biotech, Inc.
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Risk
factors
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See
Risk Factors beginning on page S-4 and Forward-Looking Information
on page S-2 of this
prospectus supplement for a discussion of material risks that prospective
purchasers of our common stock should consider.
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Nasdaq
Global Market Symbol
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AVII
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The
number of shares of common stock to be outstanding after the offering is based
on the number of shares outstanding as of March 28, 2008. As of that date, we had 70,957,958 shares of common
stock outstanding, including 5,647,016
shares the Company anticipates will
be issued in connection with the Companys acquisition of Ercole Biotech, Inc.
pursuant to the terms of the Agreement and Plan of Merger by and among the
Company, EB Acquisition Corp., a Delaware corporation, and Ercole Biotech, Inc.
a Delaware corporation, and Stockholder Representative dated March 12,
2008, but does not include:
·
7,216,260
shares of common stock underlying options outstanding at a
weighted average exercise price of $3.57
per share;
·
14,302,396 shares of common stock
underlying warrants outstanding at a weighted average exercise price of $7.92
per share; and
·
1,778,710 shares available for future
grant under our stock option plan and 208,585
shares available for future
issuance under our employee stock purchase plan.
RISK
FACTORS
Investment
in our securities involves a high degree of risk. You should carefully consider
the risks described in the section entitled Risk Factors in any prospectus as
well as in the section entitled Managements Discussion and Analysis of
Financial Condition and Results of Operations contained in our most recent
annual report on Form 10-K, which has been filed with the SEC and are
incorporated herein by reference in their entirety, as well as other
information in this prospectus and any other documents or reports incorporated
by reference herein before purchasing any of our securities. Each of the risks
described in these sections and documents could materially and adversely affect
our business, financial condition, results of operations and prospects, and
could result in a loss of your investment.
S-4
USE OF
PROCEEDS
The shares are being issued as payment by the Company as a result of
the acquisition of Ercole Biotech, Inc. (Ercole) in satisfaction of
various employment claims, severance agreements and other obligations of
Ercole. The Company expects the purchasers to dispose of the shares in the open
market from time to time following the date of this prospectus supplement. For
additional information on the Ercole acquisition see our recent current reports
on Form 8-K which have been filed with the SEC on March 25, 2008 and
March 13, 2008.
DILUTION
The net tangible book value of our common stock on December 31, 2007 was approximately $23.3 million, or approximately $0.3618
per share. Net tangible book value per share is equal to the amount of our
total tangible assets, less total liabilities, divided by the aggregate number
of shares of common stock outstanding. Dilution in net tangible book value per
share represents the difference between the amount per share paid by purchasers
of shares of common stock in this offering and the net tangible book value per
share of our common stock immediately after this offering. After giving effect
to the sale of the shares of common stock in this offering at a sales price of
$1.3161
per share, our net tangible book value at December 31,
2007 would have been approximately $23.3 million, or approximately $0.9573 per share. This represents an
immediate dilution of $0.3588 per share to new investors purchasing shares of
common stock in this offering. The following table illustrates this dilution:
Public offering price per share
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$
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1.3161
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Net tangible book value per share as of December 31,
2007
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$
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0.3618
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Decrease per share attributable to new investors
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0.0030
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Net tangible book value per share as of December 31,
2007 after giving effect to this offering
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0.3588
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Dilution per share to new investors
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$
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0.9573
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The foregoing table does not take into account further dilution to new
investors that could occur upon the exercise of outstanding options having a
per share exercise price less than the per share offering price to the public
in this offering. As of December 31, 2007, there were 64,449,094
shares
of common stock outstanding, which does not include:
6,304,453
shares of common stock issuable upon exercise of options outstanding at
a weighted average exercise price of $4.60 per share;
13,856,411
shares of common stock issuable upon exercise of warrants outstanding at a
weighted average exercise price of $8.12
per share; and
1,834,535
shares available for future grant under our
stock option plan and 208,585 shares available for future issuance under our
employee stock purchase plan.
PLAN OF
DISTRIBUTION
The
Company directly placed the securities with the purchasers in connection with
the satisfaction of various employment claims, severance agreements and other
obligations of Ercole. See Use of Proceeds.
LEGAL
MATTERS
The
validity of the shares of common stock being offered hereby has been passed
upon for AVI BioPharma, Inc. by Davis Wright Tremaine LLP of Portland,
Oregon.
EXPERTS
The financial statements of AVI
BioPharma, Inc. as of December 31, 2007 and 2006, and for each of the
years in the three-year period ended December 31, 2007, and managements
assessment of the effectiveness of internal control over financial reporting as
of December 31, 2007 have been incorporated by reference herein and in the
registration statement in reliance upon the reports of KPMG LLP, independent
registered public accounting firm, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
S-5
WHERE YOU
CAN FIND MORE INFORMATION
We are a reporting company and file annual, quarterly and current
reports, proxy statements and other information with the SEC. We have filed
with the SEC a registration statement on Form S-3 under the Securities Act
with respect to the units we are offering under this prospectus. This
prospectus does not contain all of the information set forth in the
registration statement, as amended, and the exhibits to the registration
statement. For further information with respect to us and the securities we are
offering under this prospectus, we refer you to the registration statement, as
amended, and the exhibits and schedules filed as a part of the registration
statement. You may read and copy the registration statement, as amended, as
well as our reports, proxy statements and other information, at the SECs
Public Reference Room at Room 100 F Street N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for more information about the
operation of the Public Reference Room. The SEC maintains an Internet site at
http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC.
Most of our SEC filings are also accessed
through our website at www.avibio.com.
INFORMATION
INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference in this prospectus the
information in other documents that we file with it, which means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information in documents that we file later with the SEC will
automatically update and supersede information contained in documents filed
earlier with the SEC or contained in this prospectus or a prospectus
supplement. We incorporate by reference in this prospectus the documents listed
below and any future filings that we may make with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange
Act of 1934, as amended, prior to the termination of the offering under this
prospectus:
The following documents filed with the SEC are incorporated by
reference in this prospectus:
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Annual
Report on Form 10-K for the year ended December 31, 2007;
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·
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Current
Reports on Form 8-K filed on March 25, 2008,
March 13,
2008, March 3, 2008; February 13, 2008; and February 7, 2008;
and
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·
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The
description of our common stock contained in our registration statement on
Form 8-A filed on May 29, 1997.
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We will furnish without charge to you, on written or oral request, a
copy of any or all of the documents incorporated by reference, including
exhibits to these documents. You should direct any requests for documents to:
AVI BioPharma, Inc.
Investor Relations
One S.W. Columbia
Suite 1105
Portland, OR 97258
Attn: Michael C. Hubbard
(503) 227-0554
S-6
528,848 Shares
Common
Stock
PROSPECTUS SUPPLEMENT
March 28, 2008
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