Avigen has outlined the prospects of a sale of all or some of its assets following a series of moves it made after announcing that AV650 failed a Phase IIb trial in October. With its stock down 85 percent over three months, Avigen has terminated all contracts with its partner Sanochemia to avoid future obligations; terminated all trials for AV650; expanded its efforts to find a partner for AV411 while deferring a mid-stage trial for neuropathic pain; laid off 70 percent of its staff and added $7 million in cash by selling its early-stage AV513 program to Baxter.
In a release, Avigen noted that it will begin 2009 with $56 million in cash. And the company adopted a shareholders rights plan designed to steer clear of any hostile takeover for a bargain basement rate.
Aside from continuing efforts to earn cash from AV411, Avigen made it crystal clear that it's interested in an M&A move.
The company's balance sheet creates an "opportunity for an attractive return on their investment. We recognize that the distribution of cash is one option. Any decision, however, must responsibly weigh this choice against the value that management's unique know-how and proven track record could garner from monetizing the remaining company assets, selling the company, or pursuing acquisition opportunities--any one of which could result in returns that exceed the current liquidation value."
- read the Avigen release