Avanir sells schizophrenia drug, CFO resigns

Avanir said in light of the reduced operating infrastructure anticipated following the sale of FazaClo, Mike Puntoriero, senior vice president and CFO, will be resigning his position. Martin Sturgeon, Avanir’s chief accounting officer, will assume the role of interim CFO.

Under terms of the agreement with Azur, Avanir will receive a $42 million payment at the close of the transaction, with up to an additional $10 million in contingent payments in 2009. In addition, Avanir will receive up to $2 million in royalties, based on 3% of annual net product revenues in excess of $17 million.

FazaClo (clozapine, USP) is used in the treatment of severely ill schizophrenic patients who fail to respond adequately to standard drug treatments for schizophrenia. The antipsychotic drug is also indicated for reducing the risk of recurrent suicidal behavior in patients with schizophrenia or schizoaffective disorder.

“The divestiture of FazaClo marks an important step forward in our corporate strategy to direct our resources toward the Zenvia development programs,” said Keith Katkin, Avanir’s president and CEO.

“This strategic move raises significant capital without shareholder dilution and enhances our current cash position. We will use $11 million of the sales proceeds to pay down a portion of our outstanding notes and believe our remaining net available funds will be sufficient to finance operating expenses for at least the next year, including funding the initiation of both our planned confirmatory phase III clinical trials of Zenvia in patients with involuntary emotional expression disorder and with diabetic peripheral neuropathic pain.”