Avigen Announces Restructuring and Strategic Direction

ALAMEDA, Calif., Nov 3, 2008 (GlobeNewswire via COMTEX News Network) -- Avigen, Inc. (Nasdaq:AVGN), a biopharmaceutical company innovating therapeutics for neurological care, today 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 percent 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 program, 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."

Highlights:


-- Avigen 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."

About AV411

AV411 is a first-in-class orally bioavailable 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. Additional information on AV411 can be found on Avigen's website at www.avigen.com.

About Avigen

Avigen is a biopharmaceutical company focused on developing and commercializing unique small molecule therapeutics to treat serious neurological disorders, including neuropathic pain and opioid addiction and withdrawal. Avigen's strategy is to complete the requirements of clinical development for each of the candidates in its product pipeline, and continue to look for opportunities to expand its pipeline through a combination of internal research, acquisitions and in-licensing, with the goal of becoming a fully integrated commercial biopharmaceutical company that remains committed to its neurology products. Avigen is currently developing AV411 for neuropathic pain, as well as opioid withdrawal and addiction in collaboration with NIDA. Additionally, the company is advancing AV513, a novel therapy for the treatment of multiple bleeding disorders, including hemophilia A and B, toward clinical trials. For more information about Avigen, consult the company's website at www.avigen.com.

The Avigen, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2981

Statement under the Private Securities Litigation Reform Act

This press release contains forward-looking statements, which include, among others, statements relating to Avigen's expectations that the current restructuring and staff reduction will reduce its infrastructure costs and extend its financial resources to support at least four years of operations without additional equity financings; that it will retain the know-how and expertise necessary to monetize its current assets; that it will be able to identify and acquire new assets; that it will be able to secure a partner to initiate the AV411 Phase 2b development program for neuropathic pain; that current and future National Institute on Drug Abuse-funded trials in opioid withdrawal or methamphetamine relapse will continue; that Avigen can avoid further payment obligations to Sanochemia beyond those already paid; that it will be able to take any asset to a meaningful value inflection point with or without additional equity financings; that it can generate any proceeds from the sale or partnering of current assets; and that the Company's current strategy will allow it to withstand or capitalize on the current market conditions. These risks and uncertainties include: unexpected expenses incurred with respect to the restructuring may occur; savings from the restructuring may not be as much as Avigen expects due to unexpected impediments to reducing expenses; in this economic environment, Avigen may not be able to find a partner for AV411 on terms favorable to Avigen; that costs necessary to bring products to a meaningful inflection point may be more than Avigen expects; and those detailed in reports filed by Avigen with the Securities and Exchange Commission, including Avigen's quarterly report on Form 10-Q for the period ended June 30, 2008, under the caption "Risks Related to Our Business" in Item 2 of Part I of that report, which was filed with the SEC on August 11, 2008.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Avigen, Inc.

Avigen, Inc.
Michael Coffee, Chief Business Officer
510-748-7372
IR@avigen.com
1301 Harbor Bay Parkway
Alameda, CA 94502

Avigen Announces AV650 Did Not Meet Efficacy Endpoints in Phase 2b Clinical Trial for Spasticity in Patients With Multiple Sclerosis

ALAMEDA, Calif., Oct 21, 2008 (GlobeNewswire via COMTEX News Network) -- Avigen, Inc. (Nasdaq:AVGN), a biopharmaceutical company innovating therapeutics for neurological care, today announced that the top-line data from its Phase 2b study of AV650 (tolperisone HCl) for the treatment of spasticity associated with multiple sclerosis (MS) did not achieve statistical significance on its primary endpoint of a reduction from baseline of patients' Ashworth scores as compared to placebo. The reduction of muscle spasm, a secondary endpoint, also failed to achieve statistical significance. There were no safety issues. The trial was adequately powered, and all statistical parameters were in line with expectations.

"We are disappointed with the result of this trial," said Kenneth Chahine, Ph.D., J.D., Avigen's President and Chief Executive Officer. "We had hoped AV650 would become an important new treatment option for people in the United States who currently suffer from spasticity. While we will continue to review the additional data from the trial and consider further options, we are confident in the trial design and the quality of the top-line results.

"We will now shift our focus and resources toward the clinical development of our AV411 program. At the end of 2008, we will have approximately $50 million of cash and securities. This represents approximately 2 years of cash and provides a strong foundation for advancing the development of AV411 for neuropathic pain and opioid addiction and withdrawal."

About the Trial

This double-blind, randomized clinical trial was conducted in 27 MS centers in Germany and other European countries to evaluate safety, tolerability, pharmacokinetics and efficacy in up to 150 MS patients suffering from spasticity. This trial was being conducted to Good Clinical Practice standards by a leading international clinical research organization. Following a five-week double blind assessment, patients were offered the opportunity to continue for up to twelve months in an open-label safety phase. The primary efficacy endpoint was the Ashworth scale, a standard tool used in the clinic to measure increased resistance to passive limb movement. Secondary endpoints included Brief Pain Index (BPI), painful spasm diaries, and clinical impression of change.

Avigen is a biopharmaceutical company focused on developing and commercializing small molecule therapeutics to treat serious neurological disorders, including neuropathic pain and opioid addiction and withdrawal. Avigen's strategy is to complete the requirements of clinical development for each of the candidates in its product pipeline, and continue to look for opportunities to expand its pipeline through a combination of internal research, acquisitions, and in-licensing, with the goal of becoming a fully integrated commercial biopharmaceutical company that remains committed to its neurology products. Avigen is currently developing AV411 for neuropathic pain, as well as opioid withdrawal and addiction in collaboration with the National Institute on Drug Abuse. Additionally, the company is advancing AV513, a novel therapy for the treatment of multiple bleeding disorders, including hemophilia A and B, toward clinical trials. For more information about Avigen, consult the company's website at www.avigen.com.

The Avigen, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2981

Statement under the Private Securities Litigation Reform Act

The statements in this press release relating to Avigen's expectations regarding the quality of the top-line results from the AV650 Phase 2b spasticity trial and its consideration of further options based on a review of additional data from the trial, its expectation regarding the level of its financial resources at December 31, 2008 and how long its financial resources will last, its expectation regarding shifting resources toward the clinical development of AV411, and its goal of becoming a fully integrated commercial biopharmaceutical company remaining committed to its neurology products, are forward-looking statements. These risks and uncertainties include, among others, the fact that development of small molecule therapeutics and other therapeutic discovery and development is a time- and resource-intensive process, which may result in the expenditure of a significant amount of time and resources with no progress towards clinical trials or marketable product resulting from the effort; the risk that Avigen will not be able to obtain regulatory approvals for its drug products, which is required prior to marketing drug products; and the risk that early positive preclinical and clinical results will not guarantee that the potential products will ultimately be effective in treating the indications for which they are developed, or exhibit the unique properties they appear to possess. In addition, there are many other risks and uncertainties inherent in the development of drug products. Other risks and uncertainties relating to Avigen are detailed in reports filed by Avigen with the Securities and Exchange Commission, including Avigen's Quarterly Report on Form 10-Q for the period ended June 30, 2008, under the caption "Risks Related to Our Business" in Item 2 of Part I of that report, which was filed with the SEC on August 11, 2008.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Avigen, Inc.

Avigen, Inc.
Michael Coffee, Chief Business Officer
510-748-7372
IR@avigen.com

Avigen Completes Multi-Center AV650 Phase 2b Spasticity Trial in Patients With Multiple Sclerosis

Top Line Data Expected in Q4 2008

ALAMEDA, Calif., Sep 18, 2008 (GlobeNewswire via COMTEX News Network) -- Avigen, Inc. (Nasdaq:AVGN), a biopharmaceutical company innovating therapeutics for neurological care, today announced the completion of the double-blind portion of its Phase 2b trial for AV650 (tolperisone HCl) in the treatment of spasticity associated with multiple sclerosis (MS). This Phase 2b spasticity trial is evaluating the safety, tolerability and efficacy of AV650 in MS patients at doses up to 900mg/day for one month followed by an open-label safety extension. The trial is being conducted in top MS centers in Germany and several other European countries.

"The completion of this trial in less than a year marks a significant milestone for the AV650 program and Avigen," said Kenneth Chahine, Ph.D., J.D., Avigen's President and Chief Executive Officer. "The rapid enrollment further supports the need for new and non-sedating agents to treat spasticity, and we have confidence that our planned Phase 3 trials can be completed in a similar timeframe. While the blinded portion of the trial is complete and will report before the end of 2008, more than 90% of the patients have elected to participate in the on-going open-label extension and will continue to receive AV650 for up to an additional twelve months."

Avigen is developing AV650 for commercialization in the North American market for the treatment of disabling neuromuscular spasticity and spasm under a license and supply agreement with Sanochemia Pharmazeutika AG, Vienna, Austria. AV650 is considered a New Chemical Entity (NCE) in the United States.

Tolperisone is an orally administered, centrally acting small molecule marketed for the treatment of neuromuscular spasticity and spasm in Europe and Asia. Avigen's U.S. development program is designed to build on the extensive ex-U.S. safety and efficacy experience with this compound. Versions of tolperisone have been approved for marketing in Germany for over 10 years. Sanochemia and its European marketing partner, Orion Pharma, currently market a proprietary 150mg tablet formulation of tolperisone in Germany under the brand name Viveo(r).

Spasticity is considered one of the main symptoms of the more than 2.5 million people with MS worldwide, affecting up to 60% of this population. Randall Schapiro, M.D, Director of The Schapiro Center for Multiple Sclerosis at the Minneapolis Clinic of Neurology and Clinical Professor of Neurology at the University of Minnesota, commented, "MS patients must cope with significant side effects from currently available treatments for spasticity, including drowsiness, fatigue and cognitive impairment. These side effects do affect their quality of life. We recognize the need for better-tolerated, non-sedating therapies in the United States, and we are encouraged by the European experience of tolperisone."

About the Trial

This double-blind, randomized clinical trial is being conducted in 27 MS centers in Germany and other European countries. It will evaluate safety, tolerability, pharmacokinetics and efficacy in up to 150 MS patients suffering from spasticity. This trial is being conducted to Good Clinical Practice standards by a leading international contract research organization. Following a four-week double blind assessment, patients are offered the opportunity to continue for up to twelve months in an open-label safety phase. The primary efficacy endpoint is the Ashworth scale, a standard tool used in the clinic to measure increased movement. Secondary endpoints include Brief Pain Index (BPI), painful spasm diaries, and clinical impression of change.

About Neuromuscular Spasm and Spasticity

Chronic or recurrent muscle spasm is a sudden, violent, painful contraction of muscles typically associated with serious neurological disorders such as Lou Gehrig's disease (ALS), multiple sclerosis, stroke, spinal cord injury, and cerebral palsy. These painful muscle spasms are often, but not always, associated with spasticity, an abnormality in muscle "tone." Spastic limbs become stiff and rigid because the muscles fail to relax, lacking normal regulation by the damaged nervous system. Both spasticity and sudden, painful muscle spasms can occur as complications of the neurological disorders mentioned above. Spasticity is a common symptom in multiple sclerosis, which affects 2.5 million worldwide.

About Avigen

Avigen is a biopharmaceutical company focused on developing and commercializing small molecule therapeutics to treat serious neurological disorders, including neuropathic pain and neuromuscular spasm and spasticity. Avigen's strategy is to complete the requirements of clinical development for each of the candidates in its product pipeline, and continue to look for opportunities to expand its pipeline through a combination of internal research, acquisitions, and in-licensing, with the goal of becoming a fully integrated commercial biopharmaceutical company that remains committed to its neurology products. Avigen is currently developing AV650 for spasticity and neuromuscular spasm and AV411 for neuropathic pain, as well as opioid withdrawal and addiction in collaboration with the National Institute of Drug Abuse. Additionally, the company is advancing AV513, a novel therapy for the treatment of multiple bleeding disorders, including hemophilia A and B, toward clinical trials. For more information about Avigen, consult the company's website at www.avigen.com.
Statement under the Private Securities Litigation Reform Act

The statements in this press release relating to Avigen's expectations regarding the timely and reliable completion of its clinical trials, its expectations regarding reporting AV650 Phase 2 top-line data in the fourth quarter of 2008, its expectations regarding initiating and completing planned Phase 3 clinical trials in a similar timeframe to the Phase 2b spasticity trial in patients with MS, and its goal of becoming a fully integrated commercial biopharmaceutical company remaining committed to its neurology products are forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others, the fact that development of small molecule therapeutics and other therapeutic discovery and development is a time- and resource-intensive process, which may result in the expenditure of a significant amount of time and resources with no progress towards clinical trials or marketable product resulting from the effort; the risk that Avigen will not be able to obtain regulatory approvals for its drug products, which is required prior to marketing drug products; and the risk that early positive preclinical and clinical results will not guarantee that the potential products will ultimately be effective in treating the indications for which they are developed, or exhibit the unique properties they appear to possess. In addition, there are many other risks and uncertainties inherent in the development of drug products. Other risks and uncertainties relating to Avigen are detailed in reports filed by Avigen with the Securities and Exchange Commission, including Avigen's Quarterly Report on Form 10-Q for the period ended June 30, 2008, under the caption "Risks Related to Our Business" in Item 2 of Part I of that report, which was filed with the SEC on August 11, 2008.

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Avigen, Inc.

Avigen, Inc.
Michael Coffee, Chief Business Officer
510-748-7372
Fax: 510-748-7155
1301 Harbor Bay Parkway
Alameda, CA 94502

Avigen Receives Approval to Initiate AV650 Phase II Clinical Development

Avigen to Present at Cowen and Company Annual Health Care Conference

Webcast Scheduled for 9:30 a.m. (ET) on Thursday, March 15, 2007

ALAMEDA, Calif., March 14, 2007 (PRIME NEWSWIRE) -- Avigen, Inc. (Nasdaq:AVGN) a biopharmaceutical company developing innovative therapies for the treatment of neurological conditions, today announced it was given approval from the U.S. Food and Drug Administration to commence Phase II clinical development of AV650 (tolperisone). AV650 is a New Chemical Entity (NCE) in the United States. Tolperisone is approved in several EU member countries for the treatment of spasticity and muscle spasms. Avigen's initial Phase II trial will assess the safety, tolerability, and initial efficacy, as well as AV650's lack of sedation, in spinal cord injury patients suffering from spasticity. This study will be a multi-center, double-blind, placebo-controlled trial and will explore doses up to the EU approved dose of 450 mg per day.

"This is an important step for Avigen and for the clinical development of AV650 for the treatment of spasticity," said Avigen President and Chief Executive Officer Kenneth Chahine, Ph.D., J.D. "It signifies not only the first time that AV650 is studied in the United States, but also the first time that lack of sedation will be formally assessed in patients with spasticity.

"This trial is part of Avigen's overall development plan for AV650," added Chahine. "Going forward, we intend to study AV650 at higher doses and in a variety of patient populations to fully explore its efficacy and safety profile."

Patricia Nance, M.D., clinical professor, Department of Physical Medicine and Rehabilitation, University of California, Irvine noted, "Many patients suffering from spasticity find it difficult to tolerate currently available therapies due to sedation and other factors. We are encouraged by the European experience with AV650 and the promise that AV650 can provide patients relief of spasticity symptoms without the limiting side effects associated with these therapies."

About AV650

AV650 is being developed in the North American market for the treatment of disabling neuromuscular spasticity and spasm under a license and supply agreement with Sanochemia Pharmazeutika AG. AV650 is an orally administered centrally acting small molecule marketed for the treatment of neuromuscular spasticity and spasm in Europe and Asia, including Germany, Switzerland, Austria, and Japan. Avigen's development program will build on the extensive ex-U.S. safety and efficacy experience with this compound.

About Neuromuscular Spasm and Spasticity

Chronic or recurrent muscle spasm is a sudden, violent, painful contraction of muscles typically associated with serious neurological disorders such as Lou Gehrig's disease (ALS), multiple sclerosis, stroke, spinal cord injury, and cerebral palsy. These painful muscle spasms are often, but not always, associated with spasticity, an abnormality in muscle "tone." Spastic limbs become stiff and rigid because the muscles fail to relax, lacking normal regulation by the damaged nervous system. Both spasticity and sudden, painful muscle spasms can occur as complications of the neurological disorders mentioned above.

About Avigen

Avigen is a biopharmaceutical company focused on unique small molecule therapeutics and biologics to treat serious neurological disorders, including neuropathic pain and neuromuscular spasm and spasticity. Avigen's strategy is to complete the requirements of clinical development for each of the candidates in its product pipeline, and continue to look for opportunities to expand its pipeline through a combination of internal research, acquisitions, and in-licensing, with the goal of becoming a fully integrated commercial biopharmaceutical company committed to its small molecule and biologics neurology products. The company currently has in development AV650 for neuromuscular spasm and spasticity and AV411 for neuropathic pain. Additionally, the company has in development a compound for the treatment of hemophilia A and B, AV513. For more information about Avigen, consult the company's website at http://www.avigen.com.

Statement under the Private Securities Litigation Reform Act

This press release contains forward-looking statements, which include, among others, statements relating to Avigen's intention to study AV650 at doses higher than 450 mg per day in a variety of patient populations, its belief that AV650 may be able to provide patients relief of spasticity symptoms without the limiting side effects associated with other therapies, its belief that it will be able to build on ex-U.S. Tolperisone safety and efficacy experience, and its intention of completing the requirements of clinical development for each of the candidates in its product pipeline; looking for opportunities to expand its pipeline through a combination of internal research, acquisitions, and in-licensing; and becoming a fully integrated commercial biopharmaceutical company. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include those detailed in reports filed by Avigen with the Securities and Exchange Commission, including Avigen's quarterly report on Form 10-Q for the period ended September 30, 2006, under the caption "Risk Factors" in Item 1A of Part 2 of that report, which was filed with the SEC on November 2, 2006.

Webcast

Michael Coffee, Chief Business Officer, will present information about Avigen's AV650 development plan at Cowen and Company's 27th Annual Health Care Conference on Thursday, March 15, 2007, from 9:30 to 10:05 a.m. ET. The presentation will be webcast live and archived on Avigen's website at www.avigen.com.

The Avigen, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2981

This news release was distributed by PrimeNewswire, www.primenewswire.com

SOURCE: Avigen, Inc.

Avigen, Inc.
Michael Coffee, Chief Business Officer
(510) 748-7372
Fax: (510) 748-7155
ir@avigen.com
http://www.avigen.com
1301 Harbor Bay Parkway,
Alameda, CA 94502