Viruses threatening to infect the world may only cross your mind after watching the newest bio-terrorism thriller, when the local media reports the finding of multiple dead birds around area lakes, or when headlines run stories of mysterious powder-filled envelopes – but it’s always on the mind of AVI BioPharma Inc. (NASDAQ: AVII).The company recently announced it signed three contracts with the U.S. Department of Defense to develop gene targeted therapeutic drugs against potential bioterrorism agents. The contracts’ total value of $7.1 million includes $2.66 million for the development of drugs to treat Ebola virus infections, $2.66 million for the treatment of Marburg virus infections, and $1.78 million to develop countermeasures for exposure to Bacillus anthracis (anthrax) and ricin toxins (plant toxin).
“It’s important [and] validating work for us. It’s something tangible – we’re working with an excellent agency – both with the Department of Defense and with [U.S. Army Medical Research Institute for Infectious Diseases] USAMRIID,” Michael Hubbard, director of investor relations for AVI told Market News First.
The contracts revolve around the use of antisense compounds for the treatment of infectious disease. Upon infection, a virus consumes part of the hosts’ genetic information as part of its own; however, the virus still has a unique genetic code that can be mapped and targeted. An “antisense” is a synthetic drug that targets the unique section of the virus and blocks it from reproducing.
“Gene targeted therapeutic drugs is a whole new area to therapeutic drugs. It’s where, I think, therapeutic drugs are heading,” said Hubbard.
The contracts are part of an $11 million budget allocation included in the 2006 defense appropriations act. AVI will take on three of the four programs and expects to receive up to $9.8 million over the next year as the programs are completed. The fourth program, involving Dengue fever, is still in discussion.
“We are extremely pleased to receive these contracts after the extensive due diligence and peer review process undertaken by the government following the initial FY06 funding allocation. We anticipate commencing research immediately with our collaborators at the U.S. Army Medical Research Institute for Infectious Diseases,” said Alan P. Timmins, president and COO of AVI in a press release. “Previous studies have shown that NeuGene antisense therapeutics may be a viable approach to treating victims of these deadly infections and toxins.”
Other companies use the antisense technology; however AVI has developed proprietary third-generation compounds which lack some of the issues which plagued first and second generation compounds.
AVI is has developed drugs against many RNA viruses, including SARS, West Nile and Influenza A, recognizing the need for gene therapeutic drugs against infectious disease.
“All of us are aware that antibiotics are beginning to see the end of their days – with the ability of bacteria to mutate or become resistant to drugs. [With]Gene therapeutics drugs, the approach is probably as important to medicine as was the development of antibiotics, and before that, the development of anesthesia,” said Hubbard.
Hubbard said while the contracts may be important to the company, they’re not central to the company’s long term future which is focused on treatment for Hepatitis C, other infectious diseases and cardiovascular restenosis.
“In the near term, this certainly is important … again from a scientific and otherwise validating standpoint it’s key, but our long-term future will really be dependent upon products that we come up with, whether they’re for Hepatitis C or cardiovascular disease or other,” said Hubbard.
“We were the pioneers in the area [of antisense technology] and we certainly have a goal to be the ones to impact viral diseases,” he continued. “The proof will be in the pudding – certainly there’s a growing amount of data … in regards to the use of antisense compounds. That’s our goal – we’ve built upon this foundation over the years in a very systematic fashion.”
Shares of AVI settled at $2.92 at the markets close Friday, surging to an opening of $3.17; as of Tuesday morning, AVI shares were trading at $2.92.
AVI will hold a conference call Wednesday morning to update the investment community on its 2007 first-quarter results. MN1 will follow up with a story after the call.