AVGN Avigen (MM)

Dutton Associates initiates coverage of Avigen (Nasdaq:AVGN) with a speculative buy rating and a $8.00 target price. The 12-page report by Dutton senior analyst William R. Prather, R.Ph., M.D. is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading financial portals. Avigen is an early-stage biopharmaceutical company whose business strategy to date has been unique. The Company has licensed or otherwise patented compounds that already have a clinical track record. The Company's lead products, AV650 (tolperisone) and AV411 (ibudilast), have seen significant commercial experience internationally and we believe their safety profile is already established. Avigen embarked upon a new business strategy of focusing on therapeutics for neurological and neuromuscular disorders beginning in 2005. Because the Company is relatively early in exercising this new business strategy, we believe Avigen's market value will rise over the near term based on milestone announcements surrounding the Company's product portfolio. Additionally, we also compared Avigen with other early-stage companies involved in Phase I clinical trials, realizing that Avigen's value should be enhanced because of the assumed safety of AV650 and AV411 relative to their extensive clinical use internationally. Based on upcoming milestone announcements and comparing the current value of Avigen to other early-stage companies involved in Phase I clinical trials with their respective lead products, we have assigned a 12-month price target on the common stock of $8.00 and an investment rating of Speculative Buy. About Dutton Associates Dutton Associates is one of the largest independent investment research firms in the U.S. Its 31 senior analysts are primarily CFAs and have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors. The cost of enrollment in our one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $35,000 from the Company for 4 Research Reports with coverage commencing on 6/12/2006. We do not accept payment of our fees in company stock. Our principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures and analyst background at www.jmdutton.com before investing.