Avalon Pharmaceuticals Closes $20 Million in Private Placement of Common Stock and Warrants to Institutional Investors
May 29 2007 - 7:16PM
PR Newswire (US)
GERMANTOWN, Md., May 29 /PRNewswire-FirstCall/ -- Avalon
Pharmaceuticals, Inc. (NASDAQ:AVRX), today announced that it closed
the sale of common stock and common stock warrants to institutional
investors that was previously announced on May 25, 2007. The
Company sold 3,838,772 shares of its common stock at $5.21 per
share. The investors will also receive warrants to purchase up to
959,694 shares of Avalon's common stock at an exercise price of
$6.00 per share. The warrants will expire in five years. Gross
proceeds of the sale were $20 million. Participants in the
transaction included Passport Management LLC, Federated Kaufmann
Fund, Merlin Nexus, Hunt BioVentures, Special Situations Life
Sciences Fund, Biotechnology Value Fund and other select
institutional investors. Proceeds will be used to fund further
development of Avalon's lead oncology drug, AVN944, and the
continued advancement of its Beta catenin, Aurora pathway, Survivin
and Myc inhibitor programs. "We are pleased to have attracted such
a high quality group of investors in this offering," said Kenneth
C. Carter, Ph.D., President and CEO of Avalon. "This financing
provides Avalon with the resources for the next two years, during
which time we expect to reach several key milestones in the
development of our pipeline. Of particular note, AVN944 should move
into Phase II clinical trials for the treatment of solid and liquid
tumors in the second half of 2007, our Beta catenin inhibitor
program is expected to progress through pre-clinical studies and
enter the clinic in 2008 and our Aurora Pathway inhibitor program
should follow it by 6-8 months." Rodman & Renshaw, LLC served
as lead placement agent for the transaction. Trout Capital LLC
acted as co-placement agent for the transaction. The shares were
issued in a private placement under Regulation D of the Securities
Act of 1933, as amended. The shares therefore have not been
registered under the Act or any state securities law or regulation
and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements. About Avalon Pharmaceuticals Avalon Pharmaceuticals
is a biopharmaceutical company using its proprietary technology,
AvalonRx(R), to discover and develop cancer therapeutics. Avalon
has a lead product in Phase I clinical development (AVN944 - IMPDH
inhibitor), as well as preclinical programs to discover inhibitors
for the beta-catenin and aurora pathways now in late stage lead
candidate optimization. Avalon also has discovery programs on
modulators of survivin function and a drug discovery program
targeting the MYC oncoprotein, one of the most important and
previously intractable cancer targets. The company has value
generating partnerships with Merck, MedImmune, Medarex, and
Novartis. Avalon Pharmaceuticals was established in 1999 and is
headquartered in Germantown, Md. About AVN944 AVN944 is an oral
small molecule drug candidate that inhibits inosine monophospate
dehydrogenase (IMPDH), an enzyme that is critical for cells to be
able to synthesize guanosine triphosphate (GTP), a molecule
required for DNA synthesis and cellular signaling. Avalon filed an
IND with the FDA in August 2005 and initiated U.S. Phase I clinical
trials in January 2006 for use of AVN944 for the treatment of
hematological cancers. Interim data from the study, announced in
December 2006, indicate that AVN944 is well tolerated, has
dose-dependent pharmacokinetics, induces biomarkers of programmed
cell death in cancer cells from patients, and has resulted in
stabilized disease after a one-month treatment cycle in half of the
patients that have been treated thus far. Comprehensive data on the
biological and clinical activity of AVN944 from the Phase I study
and the initiation of multiple Phase II studies are expected by
midyear 2007. About AvalonRx(R) AvalonRx(R) is a comprehensive,
innovative and proprietary suite of technologies based upon
large-scale gene expression analysis. This platform facilitates
drug discovery by expanding the range of therapeutic targets for
drug intervention, including targets and target pathways frequently
considered intractable using conventional HTS approaches. It allows
more informed decisions about which compounds to advance towards
clinical trials, and facilitates drug development through
identification of biomarkers of efficacy. The analysis of the
selected biomarkers can aid in the stratification of patients or
provide early indicators of response. Safe Harbor Statement This
announcement contains, in addition to historical information,
certain forward-looking statements that involve risks and
uncertainties. Such forward-looking statements include, among
others, statements regarding (i) the use of the proceeds of the
offering in the further development of AVN944 and in the continued
development of additional pipeline programs), (ii) the potential to
advance Avalon's preclinical programs and (iii) the potential to
advance AVN944 in clinical trials, including the anticipated timing
of the commencement of Phase II clinical trials. Such statements
reflect the current views of Avalon management and are based on
certain assumptions. Actual results could differ materially from
those currently anticipated as a result of a number of factors,
risks and uncertainties, including the risk that our discover
programs may not be successful, the risk that AVN944 will not
progress successfully in its clinical trials, and other risks
described in our filings with the SEC. Contacts: Avalon
Pharmaceuticals, Inc. Russo Partners, LLC Gary Lessing Wendy Lau
(Media) Executive Vice President & CFO Tel: (212) 845-4272 Tel:
(301) 556-9900 Fax: (301) 556-9910 The Trout Group LLC Email: Chad
Rubin (Investors) Tel: (212) 477-9007 ext. 47 DATASOURCE: Avalon
Pharmaceuticals, Inc. CONTACT: Gary Lessing, Executive Vice
President & CFO of Avalon Pharmaceuticals, Inc.,
+1-301-556-9900, Fax: +1-301-556-9910, ; or Media, Wendy Lau of
Russo Partners, LLC, +1-212-845-4272, or Investors, Chad Rubin of
The Trout Group LLC, +1-212-477-9007 ext. 47, both for Avalon
Pharmaceuticals, Inc.
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