Avigen to cut 70 percent of workforce, leave Alameda labs - San Francisco Business Times:

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It also will leave its Alamedz labs and is weighing the possibility of leaving its headquarteresin Alameda. The company (NASDAQ: AVGN) said the job cuts will preservse cash while allowing itto cash-ouft its current assets and possiblg acquire new assets. It said it will end the year with cash and securitiesa ofabout $49 million. Selling or findint a partner for itspain drug, and blood-clotting drug, AV513, would increasew Avigen’s cash position, the company said.
“We believwe our strong cash position and management team will make Avigemn an attractive partner in this challenging financial CEO Kenneth Chahine said in a prepared In a separate Securities and ExchangCommission filing, Avigen said the job cuts would cost abouft $1.5 million, most of that coming in the form of severancre payments. Most of the paymenta will occur this but some will extend into the firsg halfof 2009, the company said.
Avigen also said it will move its lab spacs out of 1201 Harbor Parkwayg and is reviewing itsotherr space, including that of its headquarters at 1301 Harbor Avigen said it has notified Ellizs Partners, the landlord for its 4,834-square-foot lab space, that it intendsw to accelerate the expiration date on its lease to 240 days from Nov. 30, 2010. The company’ws lease payments on the lab spac e areabout $12,000 a month and the terminatio n is expected to cost less than the company said, including a potential $25,000 earlu termination fee. The costs will be paid over the remainingt period of the lease thecompany said.
Avigen’s AV650, or tolperisone HCI, failed a midstage tria designed to show that the drug coule controlspasticity — the tightening of muscles — in multiplw sclerosis patients. The company terminatedd the program. Since then, Avigen has cancelled its contract with AG of Austriqa to avoid further payment obligations tiedto AV650. Avigen made a tota l of $5.5 million in payments to Sanochemia’d parent, Ltd.
, and was required to make additionall payments basedon clinical, regulatory and sales There were no early-termination At the time it ended the AV650 Avigen said it had enough cash for two It also said it would shifg its focus to a drug designed for neuropathidc pain and opioid addiction and The company now says it will seek a partnetr for AV411, and it doesn’t plan to startt a Phase IIb development program for neuropathix pain. That study was expectedd to begin earlynext year. Througn the first nine months of this Avigenlost $24.2 million, or 81 cents per It recorded no revenue. Cash, cash equivalents and securitiex available for salestotaled $47.3e million as of Sept.
30, down from $68.87 million at the end of last year. Avige n stock was at 67 cents per sharein late-da y trading, up 7 cents for the day. It openecd Oct. 20 — the day before it announcer AV650’s failure — at $3.33 per