The company has also said that without additional financing, it may not be able to fund operations through the end of 2008.
The Washington Post reports that the biotech, which focuses on cancer therapies, will stop work on its most advanced drug candidate and focus on AVN316, a drug that inhibits a cell pathway containing several proteins that play a role in the start and spread of cancer.
Avalon has partnerships with Merck and other firms to investigate compounds to fight several ailments, including cancer. Avalon could receive up to $200 million in milestone, regulatory and other payments as part of its Merck agreement, a partnership created last year to attack a target previously regarded as “undruggable.”
Like small, struggling biotechs before it, Avalon now faces partnering with another company, debt financing or selling itself.
Avalon is a 2000 graduate of Montgomery County’s first technology incubator. The then fledgling drug company moved out of the incubator into a modest 9,000-square-foot home in Gaithersburg. It was born in the incubator 11 months earlier as a four-employee biotech startup, occupying just one wet lab. The following year Avalon landed $70 million in venture funding, one of the biggest venture investments of 2001.
Avalon is now located at 20358 Seneca Meadows Parkway in Germantown.