Avigen Closes $21.2 Million Private Placement of Common Stock
May 15 2006 - 7:00AM
PR Newswire (US)
ALAMEDA, Calif., May 15 /PRNewswire-FirstCall/ -- Avigen, Inc.
(NASDAQ:AVGN), a biopharmaceutical company focused on unique small
molecule therapeutics to treat chronic neurological conditions,
today announced that on May 12, 2006, it completed a private
placement of common stock with institutional investors of
approximately $21.2 million. Under the terms of the transaction,
Avigen sold approximately 3.9 million shares of common stock at a
purchase price of $5.37 per share. The transaction did not include
any warrants or other enhancements. RBC Capital Markets acted as
sole bookrunning manager and lead placement agent, and CIBC World
Markets acted as co-placement agent for the offering. Investors in
the transaction included Biotechnology Value Fund, Apex Capital,
Federated Kaufman Fund, and Fort Mason Capital LP. "We believe the
quality and terms of this transaction not only validate our
strategy, but more importantly, that the additional capital allows
us to expand the development programs within our pipeline and
advance multiple clinical programs in parallel," commented Ken
Chahine, Ph.D., J.D., Avigen's President and Chief Executive
Officer. "We began the year with a strong cash position and a
focused clinical development plan based around our lead neurologic
compounds, including AV650, for the treatment of spasticity and
neuromuscular spasm, and AV411, for the treatment of neuropathic
pain. Since then, we have identified several additional
opportunities with significant value that we believe should be
pursued more aggressively. Specifically, the proceeds of this
financing transaction will allow us to pursue the development of
AV650 for acute muscle spasm and AV411 for chemotherapeutic induced
neuropathic pain. The funding will also allow us to advance the
development of AV513, our oral drug candidate for the treatment of
hemophilia, which has progressed more quickly than initially
anticipated." The shares of Common Stock sold to the investors have
not been registered under the Securities Act of 1933. Accordingly,
these securities may not be offered or sold in the United States,
except pursuant to an effective registration statement or an
applicable exemption from the registration requirements of the
Securities Act. Avigen has agreed to file a registration statement
covering resale of these securities by the investors. This press
release shall not constitute an offer to sell or the solicitation
of an offer to buy the Common Stock. About Avigen Avigen is a
biopharmaceutical company focused on unique small molecule
therapeutics and biologics to treat serious neurological disorders,
including spasticity and neuromuscular spasm and neuropathic pain.
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.
Avigen's goal is to become a fully integrated commercial
biopharmaceutical company committed to its small molecule and
biologics neurology products. The company currently has in
development AV650 for spasticity and neuromuscular spasm and AV411
for neuropathic pain. Additionally, the company has in development
a compound for the treatment of hemophilia A and B, AV513. For more
information about Avigen, consult the company's website at
http://www.avigen.com/ Statement under the Private Securities
Litigation Reform Act This press release contains forward-looking
statements, which include Avigen's belief that its drug candidates
have expanded clinical utility or will offer scientific, clinical,
or commercial advantages, Avigen's belief that AV513 has
significant value, and Avigen's intended use of the proceeds from
the private placement and the benefits that it expects to obtain
from the application of the proceeds. 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 possibility that Avigen may alter its development plans or may
use the funds received in the private placement for other reasons
not currently anticipated. Other risks and uncertainties relating
to Avigen are detailed in reports filed by Avigen with the
Securities and Exchange Commission, including Avigen's Annual
Report on Form 10-K for the period ended December 31, 2005, under
the caption "Risk Factors" in Item 1A of Part I of that report,
which was filed with the SEC on March 16, 2006. DATASOURCE: Avigen,
Inc. CONTACT: Michael Coffee, Chief Business Officer of Avigen,
Inc., +1-510-748-7372, or fax, +1-510-748-7155, or Web site:
http://www.avigen.com/
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