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Genzyme acquires Avigen gene therapy assets
February 2006
by Jeffrey Bouley  | 
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CAMBRIDGE, Mass.—Genzyme Corp. made an up-front cash payment of $12 million to acquire an extensive array of gene therapy assets from Avigen Inc., including rights to a broad patent estate focused on adeno-associated virus (AAV) technology. In addition to the cash payment, Genzyme will make potential milestone and royalty payments based on the development, approval and sale of products developed under the intellectual property portfolio.
 
This means that Genzyme now has all of Avigen's non-pain-related AAV assets, which is in keeping with Avigen's strategy to discontinue AAV gene therapy funding in order to focus exclusively on development of traditional pharmaceutical products.
 
"We have been assembling a strong management team with outstanding experience in small molecules and biologics and are now positioned to redirect our resources from viral-based gene therapy to fully commit to more traditional drug development," says Dr. Kenneth Chahine, Avigen's president and CEO. "Although Avigen has been a leader in the AAV field, when the challenges ahead are viewed objectively, we believe that focusing our existing resources on traditional pharmaceuticals offers a greater potential to increase shareholder value than staying the course and investing our existing capital in viral-based gene therapy programs."
 
Genzyme, however, is happy to pick up where Avigen left off. "In addition to building an impressive AAV intellectual property estate, Avigen has made significant progress in advancing the clinical utility of gene therapy, thereby making the addition of its assets an important strategic acquisition for us," says Rich Gregory, Genzyme's head of research. "We look forward to advancing Avigen's ongoing work in Parkinson's disease and hemophilia, areas where we believe gene therapy could play a meaningful role in treatment."
 
Genzyme officials note that its path to developing gene therapy products that use either adenovirus or adeno-associated virus vectors is also enhanced by the purchase of viral manufacturing facilities from Cell Genesys just a month before the acquisition of Avigen's AAV portfolio.
 
Now fully divested of its AAV assets, Chahine says that Avigen will focus on developing and commercializing drugs for the treatment of neurological conditions, and intends to build a strong neurologically-focused pipeline through a combination of internal research, acquisitions and in-licensing.
 
By eliminating the need to maintain an AAV manufacturing facility and associated operational expenses, Avigen has already achieved cost reductions totaling more than $2 million annually. Avigen has also sublet sizeable pieces of lab, warehouse and office space for additional savings of $5 million through the term of its lease.
 
Code: E020617

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