Avanir needs financing to continue operations past 2007, launch Neurodex

By Elaine Rigoli

Tampa, Fla., Aug. 10 - Avanir Pharmaceuticals Inc. said Thursday that in order to maintain sufficient cash and investments to fund future operations and to prepare for the commercialization of Neurodex, it needs to raise additional capital prior to the anticipated launch in early fiscal 2007, which begins Oct. 1.

Avanir said it may seek additional capital at any time prior to the planned launch of Neurodex and may do so through various financing alternatives, including licensing or sales of technologies and drug candidates, selling shares of common or preferred stock or through the issuance of one or more forms of senior or subordinated debt.

The balance of securities available for sale under Avanir's existing shelf registration was roughly $63.8 million at June 30, according to the company's 10-Q report filed with the Securities and Exchange Commission.

The company said the anticipated offering proceeds plus cash, cash equivalents, investments in securities and restricted investments of approximately $38.2 million at June 30, as well as anticipated future cash flows generated from licensed technologies and sales from the shipments of FazaClo should be sufficient to sustain the planned level of operations for at least the next 12 months.

During fiscal 2006, Avanir expects to earn $7 million to $8 million from research and development services that it is providing under collaborative agreements. These payments will fully offset the expenses that Avanir incurs in connection with providing those services.

Avanir said it does not expect to earn any additional milestones under the AstraZeneca or the Novartis license agreement in the fourth quarter of fiscal 2006 ending Sept. 30.

Based in San Diego, Avanir develops therapeutic products for the treatment of chronic diseases.

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