Avigen says 4Q net income $7.1 million, has cash to fund next three years

By Angela McDaniels

Seattle, Feb. 16 - Avigen Inc. said fourth-quarter 2005 net income increased to $7.1 million, or $0.34 per share, from a net loss of $5.7 million, or $0.28 per share, for the fourth quarter of 2004.

For the full year, Avigen reported a net loss of $14.7 million, or $0.71 per share, compared with $23.9 million, or $1.17 per share, for 2004.

More positively, the company predicted that the $70 million in financial assets it had at Dec. 31 - including cash, cash equivalents, available-for-sale securities and restricted investments - will support its operating plans for three years.

Meanwhile, the company said its revenue for the fourth quarter ended Dec. 31 was $12,002,000 versus 2005 revenue, which came to $12,026,000.

A payment from Genzyme Corp. in connection with the divestiture of Avigen's gene therapy assets made up the bulk of the revenue for the year, according to the release.

In comparison, revenue for the three and 12-month periods ended Dec. 31, 2004 were $35,000 and $2.2 million, respectively, the later reflecting recognition of deferred revenue associated with the termination of Avigen's gene therapy collaboration with Bayer Corp. for hemophilia.

"Our objectives in 2005 were to complete our exit from gene-therapy, reduce our cash burn and expand our pipeline with complimentary products that we believe we will be able to commercialize successfully. We achieved each of these objectives," president and chief executive officer Kenneth G. Chahine said in the release.

Avigen further predicted that it will experience cost savings due in 2006 due to lower staff levels and the company's expectation that it will not continue to experience significant impairment charges associated with long-lived assets, which are related to its efforts to sublease portions of its operating facilities in order to reduce costs.

The company said it plans to raise additional funding through public or private equity financing or collaborative arrangements, however, in order to cover future increases in operating expenses related to the development and commercialization of its products.

Avigen is a development-stage biopharmaceutical company based in Alameda, Calif., that develops small molecule therapeutics and biologics to treat serious neurological disorders.

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