Avigen, Inc., a biopharmaceutical company innovating therapeutics for neurological care, announced a significant restructuring of the company aimed at preserving cash and reassessing its strategic opportunities. As a result of the restructuring, which will involve staff reductions of over 70 per cent of the company's total workforce, Avigen expects to have sufficient cash to fund operations for over four years.
"Our deepest gratitude goes out to all the talented and dedicated employees who have worked so hard to complete a timely and well executed AV650 clinical programme, as well as enhance the value of our other clinical-stage drug candidates from our internal research and development," said Kenneth Chahine, Ph.D., J.D., Avigen's president and chief executive officer. "By reducing to only a core team, however, we can significantly lower our infrastructure costs, while retaining the know-how and expertise necessary to monetize our current assets and identify opportunities to acquire new assets. We believe our strong cash position and management team will make Avigen an attractive partner in this challenging financial climate."
According to an Avigen press release, the company expects to end 2008 with top-line cash and securities of approximately $49 million and believes this restructuring will extend its resources to support at least four years of operations, including providing funds to develop one asset to a meaningful value inflection point without additional equity financings.
Avigen's contract with Sanochemia Pharmaceutica AG regarding AV650 has been terminated to avoid further payment obligations on the part of Avigen.
Avigen believes the breadth and value of AV411 can be best realized with the support of a partner; therefore, Avigen intends to seek a partner and does not currently plan to initiate the phase 2b development program for neuropathic pain. Current and future National Institute on Drug Abuse-funded phase 2a trials in opioid withdrawal and methamphetamine relapse will continue.
Proceeds from the sale or partnering of Avigen's current assets (AV411 and AV513) could significantly increase its cash position and its ability to develop additional assets to meaningful value inflection points without additional equity financings.
"Our experienced team has faced similar challenges, and has demonstrated the ability to take decisive action to create valuable opportunities," said Dr. Chahine. "Given the current economic environment, we believe this strategy represents a sound plan that will not only withstand, but capitalize on, the current market conditions."
AV411 is a first-in-class orally bio-available small molecule, a glial attenuator that suppresses pro-inflammatory cytokines IL-1 beta, TNF alpha, and IL-6, and may upregulate the anti-inflammatory cytokine IL-10. While considered a New Molecular Entity (NME) in the United States and Europe, the drug was first approved in Japan more than 15 years ago. The drug has been prescribed to over one million patients for a different indication and has a good post-marketing safety profile in nearly 15,000 patients studied at the prescribed doses.
Glial activation in the brain and spinal cord contribute to the establishment and amplification of the chronic pain state. As part of its program investigating glial attenuation as a novel approach to the treatment of neuropathic pain, Avigen discovered that AV411 (ibudilast) was efficacious in standard preclinical models of opioid withdrawal. While ibudilast was initially developed as a non-selective phosphodiesterase (PDE) inhibitor for the treatment of bronchial asthma, its efficacy in neuropathic pain models appears to be independent of this activity. AV411 has advanced through Phase 1 and 2a clinical trials for neuropathic pain and is currently in a NIDA-funded trial with Columbia University addiction research specialists for opioid withdrawal. Additional preclinical research has revealed that AV411 can attenuate opioid-induced glial activation and both behavioral and neurochemical markers of opioid-induced reward and withdrawal. Moreover, collaborative studies with NIDA have revealed utility in methamphetamine relapse in animals which is being translated to a NIDA-funded exploratory clinical trial with UCLA investigators in 2009. Based on its research, Avigen has filed for patents protecting the use of AV411, as well as for patents on AV411 analogs which the company believes have the potential to be effective second generation molecules.