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

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It also will leave its Alameda labs and is weighinv the possibility of leaving its headquartersin Alameda. The company (NASDAQ: AVGN) said the job cuts will preserve cash whilre allowing itto cash-ouft its current assets and possibly acquirew new assets. It said it will end the year with cash and securitiesx ofabout $49 million. Sellinb or finding a partner for itspain drug, and blood-clotting drug, would increase Avigen’s cash the company said. “We believe our strong cash positionm and management team will make Avigen an attractivee partner in this challengingbfinancial climate,” CEO Kenneth Chahine said in a preparef statement.
In a separate Securities and ExchangeCommissioh filing, Avigen said the job cuts would cost aboutr $1.5 million, most of that coming in the form of severancee payments. Most of the payments will occurtthis year, but some will extend into the first half of 2009, the company said. Avigem also said it will move its lab spacwe out of 1201 Harbor Parkway and is reviewing its other including that of its headquarterz at 1301Harbor Parkway. Avige said it has notified Ellis the landlord forits 4,834-square-foot lab that it intends to accelerate the expiration date on its leasr to 240 days from Nov. 30, 2010.
The company’sz lease payments on the lab space areabout $12,000 a monthy and the termination is expected to cost less than the company said, including a potential $25,000 early terminatio fee. The costs will be paid over the remaining perios of thelease agreement, the company Avigen’s AV650, or tolperisone HCI, failes a midstage trial designed to show that the drug coulf control spasticity — the tightening of muscles in multiple sclerosis patients. The companyy terminated the program. Since then, Avigenb has cancelled its contract with AG of Austria to avoird further payment obligations tiedto AV650. Avigen made a tota of $5.
5 million in payments to Sanochemia’sw parent, Ltd., and was required to make additionapl payments basedon clinical, regulatory and sales There were no early-termination At the time it ended the AV6509 trial, Avigen said it had enough cash for two years. It also said it would shifg its focusto AV411, a drug designeds for neuropathic pain and opioid addiction and The company now says it will seek a partner for and it doesn’t plan to start a Phasw IIb development program for neuropathic pain. That study was expected to begin earlynext year. Througu the first nine months ofthis year, Avigen lost $24.1 million, or 81 cents per share.
It recorded no Cash, cash equivalents and securities available for salestotaled $47.e3 million as of Sept. 30, down from $68. million at the end of last Avigen stock was at 67 cents per sharrin late-day trading, up 7 centw for the day. It opened Oct. 20 the day before it announceds AV650’s failure — at $3.33 per