Avigen Cleared to Resume Clinical Trial of Hemophilia B Treatment

“We are excited to be moving forward again on this trial,” said John Monahan, Ph.D., Avigen’s CEO and president. “We have been working closely with the FDA since the beginning of the year to ensure this trial would continue safely and effectively. We made several changes to the trial protocol to enhance patient monitoring and add dose cohorts while also enabling us to move forward at a better pace. We believe this revised trial design will enable Avigen, our collaborators and the FDA to be very comfortable with the methodology and will produce the appropriate data to effectively evaluate the safety and potential efficacy of Coagulin-B. We expect to begin treating subjects in the near future.”

Clinical Study Summary

Hemophilia is an inherited blood disorder caused by a deficiency in one of the blood’s clotting factors. Hemophilia B occurs when the gene required to produce factor IX (FIX) is absent or defective and affects 5,000 people in the U.S. and Europe. People living with hemophilia B bleed excessively when injured and can suffer from dangerous spontaneous internal bleeding that can lead to pain, swelling and permanent damage, especially in the joints. It is hoped that liver infusion of Coagulin-B will result in the production of stable, therapeutic levels of clotting factor, enabling patients to lessen or eliminate their dependence on expensive injected clotting factors.

Avigen’s Phase I clinical study is an open-label, dose escalation safety trial of Coagulin-B, Avigen’s adeno-associated virus (AAV) gene therapy vector containing the FIX gene, infused into the liver. To date, six subjects with severe Hemophilia B, with FIX levels below 1%, have received a single administration of Coagulin-B infused into the liver at three increasing dose levels. Subjects one through four received relatively low doses of vector. All of these patients tolerated the procedure well and showed no side effects or vector toxicity. While peak measurable levels of circulating FIX between 1 and 2% were observed, none of these patients exhibited sustained levels above the measurable 1.0% level. This response was in line with expectations given the low dose levels administered.

The two subjects in the third cohort received a higher dose, which was predicted to have a therapeutic effect based on the results of preclinical animal studies. Again, both subjects tolerated the procedure well. In December 2002, it was reported that subject five achieved circulating levels of FIX in excess of 10% of normal for approximately four weeks. Levels of 3% to 5% are therapeutic. In week four, this subject experienced a temporary elevation in the levels of two liver enzymes, at which point the circulating levels of FIX began to decline rapidly. The subject had no other symptoms and continued to feel healthy. The situation resolved without medical intervention. Subject six exhibited lower levels of circulating FIX for a few weeks and did not experience any elevation in liver enzymes.

A liver enzyme response to the AAV vector has never been observed in any of the preclinical animal studies or in any other subject in two clinical trials. In addition, in all of the animal studies once a stable expression level was achieved, it remained stable for the life of the cell that received the vector. For example, in Avigen’s hemophilia B preclinical studies, the first dog treated with Coagulin-B continues to express therapeutic levels of FIX more than four years later.

The company suspended enrollment of additional subjects while it gathered supplementary data from the participants to more fully understand these responses. After reviewing all of the additional data and conferring extensively with the FDA, the FDA gave Avigen clearance to continue.

“We were encouraged by the initial response of subject five. At greater than 10% of circulating levels of FIX for four weeks, his experience clearly demonstrated that our AAV vector delivery system can achieve significant levels of a critically important therapeutic protein. This level of protein production was orders of magnitude more protein than has typically been seen in other human gene therapy trials,” said John Monahan, Avigen’s President and CEO. “However, we must also seek to understand why the therapeutic response was not maintained in this particular situation. As we move the trial forward, we will collect the data we believe is required to more fully understand this response. Conducting human clinical trials for gene therapy must be a deliberate and methodical process as we are breaking new ground each step of the way. We are committed to doing the work necessary to achieve long-term results for patients with hemophilia B.”

Avigen is partnered with Bayer Corporation, a worldwide healthcare and life sciences company and leader in the development, manufacture and distribution of hemophilia products for the development and commercialization of Coagulin-B. Under the collaboration, Bayer will pay for all of the clinical and manufacturing costs for the planned Phase II/III clinical trials. Bayer will help Avigen conduct those trials and take part in the regulatory approval process worldwide.

About Avigen

Avigen, Inc., based in the San Francisco Bay Area, is a leader in the development of gene therapy products, based on its AAV (adeno-associated virus) delivery platform technology. Avigen’s proposed gene delivery products are designed for direct administration to patients in order to achieve expression of therapeutic proteins within the body. The company has two key product development programs. The first for hemophilia B is in phase I clinical trial. The company expects to file an IND for its second program, for Parkinson’s disease, shortly. Additional information on Avigen’s proprietary gene delivery products can be found at www.avigen.com

Investors Please Note:

The statements in this news release regarding Avigen’s expectations for treating subjects in the near future, for the benefits to be realized from the revised trial design, and for timing of a filing of an IND for Parkinson’s disease, are forward-looking statements. Actual results may differ materially from current expectations. For example: clinical trials advances may be delayed or not occur due to unanticipated difficulties in obtaining or maintaining approvals required by regulatory or institutional authorities, or due to unanticipated responses such as occurred with the participant who experienced elevated enzyme levels; and Avigen may experience difficulties in enrolling suitable trial participants, which would delay the commencement or continuation of the trials. In addition, there are many other risks and uncertainties inherent in the development of gene therapy products. Other risks relating to Avigen are detailed from time to time in documents filed by Avigen with the SEC, including Avigen's Quarterly Report on Form 10-Q for the period ended June 30, 2003, filed on August 8, 2003, under the caption "Risk Factors" in Item 2 of that report.

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Contact: Thomas J. Paulson
Vice President, Finance and CFO
Avigen, Inc.
1301 Harbor Bay Parkway, Alameda, CA 94502
Tel: 510-748-7159
FAX: 510-748-7155
Internet: tpaulson@avigen.com

Message posted by: Frank S. Zollmann