Avanir board approves one-for-four reverse stock split

By Ted A. Knutson

Washington, Jan. 6 - Avanir Pharmaceuticals Inc. announced Friday its board of directors approved the implementation of a one-for-four reverse common stock split of the company's common stock Thursday. Shares will begin trading on a split-adjusted basis when the market opens on Jan. 18.

The reverse split was previously approved by the company's shareholders at the company's annual shareholder meeting held on March 17, 2005.

"Avanir has twice sought and obtained shareholder authorization to implement a reverse stock split," stated Eric Brandt, Avanir president and chief executive officer.

"Having reached the company's current stage of development with our pending New Drug Application for Neurodex, and in preparation for the business events of 2006 (further advancement of the pipeline and potential launch of Neurodex), we decided to implement the reverse split at this time to reduce our total outstanding shares to a level believed to be more appropriate for a company Avanir's size."

Neurodex is an investigational new drug for the treatment of pseudobulbar affect in phase 3 trials.

Avanir had 122.3 million shares of common stock issued and outstanding at the end of trading on Thursday. There will be about 30.6 million shares issued and outstanding, assuming that no warrants or options are exercised in the interim. Avanir shares closed Thursday at $4.00.

The company will not issue fractional shares of common stock in connection with the reverse split. Rather, shareholders will receive a cash payment equal to the value of the fractional shares that they otherwise would have received.

Avanir added the reverse split is intended to broaden its investor base. Because some growth-orientated institutional investors have minimum price and float requirements for their investments, a higher stock price, while maintaining a float in excess of 30 million shares, may encourage greater levels of long-term institutional stock ownership. This potential increase in investor interest may improve the marketability of the company's common stock to a broader range of investors, the company noted.

San Diego-based Avanir develops therapeutic treatments for chronic diseases.

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