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Biotechnology Value Fund, L.P. To Make Tender Offer For Any And All Outstanding Shares Of Avigen At $1.00 Per Share
Date:1/15/2009

Tender Offer provides stockholders with a near-term cash alternative if BVF nominees are elected

BVF reaffirms support for downside-protected merger with MediciNova

NEW YORK, Jan. 15 /PRNewswire/ -- Biotechnology Value Fund, L.P. ("BVF") announced today that it intends to make a cash tender offer to purchase any and all of the outstanding common stock of Avigen, Inc. (Nasdaq: AVGN) ("Avigen") that BVF does not own at a price of $1.00 per share under the conditions described below. The offer price represents a 35% premium over Avigen's closing stock price of $0.74 on January 8, 2009, the day prior to BVF's announcement that it was seeking to remove all incumbent Avigen directors and to elect its own slate of stockholder focused nominees. BVF Partners L.P., the general partner of BVF, beneficially owns an aggregate of 8,819,600 shares of Avigen, or approximately 29.63% of the outstanding shares.

On January 9, 2009, BVF announced that it had delivered a notice to Avigen to call a special meeting of stockholders (the "Special Meeting") to remove all incumbent directors and elect its own slate of stockholder-focused nominees

The tender offer will be conditioned on the following: (i) BVF's nominees being elected to the board of directors of Avigen (the "Board") at the Special Meeting (or otherwise appointed) and constituting a majority of directors on the Board, (ii) the Board redeeming rights issued under Avigen's poison pill, (iii) Avigen not committing to any strategic transactions or capital-depleting actions, pursuant to the process described by Avigen on January 14, 2009 (or otherwise), and (iv) other customary conditions such as the absence of a suspension in trading or any material adverse change at Avigen. BVF may increase the tender price if Avigen's unrestricted cash balance increases (for example, as the result of the sale of assets.) The tender offer is not conditioned on the availability of financing.

Mark Lampert, the general partner of BVF, stated, "The tender offer provides stockholders with a choice if BVF's nominees are elected to the Board: they can either tender their shares for near-term cash at a premium to the market price or they can retain their shares and participate with BVF in the future of Avigen, whether through a merger with MediciNova, as hoped, or otherwise. This tender is the outgrowth of Avigen's earlier rejection of our request that the Company provide downside protection for all shareholders. If elected to the Board, BVF's nominees intend to pursue the downside-protected transaction proposed by MediciNova, or, if not possible, to consider other alternatives including a complete return of capital."

Mr. Lampert continued, "Yesterday Avigen announced that it will spend stockholder money on not one, but two financial advisors. Why? We believe that Avigen could retain ten financial advisors and it won't change the fact that the risk-reward profile of the proposed merger with MediciNova is extraordinary. We are concerned that this is just another example of the Board wasting stockholders' assets; we question the Board's underlying motivation for these actions and whether they are simply trying to remain in office at stockholders' expense. In order to ensure no further deterioration of Avigen's value, we urge stockholders to vote to remove all incumbent directors and elect the BVF nominees."

BVF expects to file offering materials with the Securities and Exchange Commission and commence the tender offer within a reasonable time. Once the tender offer is commenced, offering materials will be mailed to Avigen stockholders and filed with the Securities and Exchange Commission. Avigen stockholders are urged to read the offering materials when they become available because they will contain important information.

Questions should be directed to the information agent, MacKenzie Partners, Inc., at (800) 322-2885.

THIS PRESS RELEASE IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL ANY SHARES. BVF HAS NOT YET COMMENCED THE OFFER REFERRED TO IN THIS PRESS RELEASE. THE SOLICITATION AND THE OFFER TO BUY AVIGEN'S COMMON STOCK WILL BE MADE PURSUANT TO AN OFFER TO PURCHASE AND RELATED MATERIALS THAT BVF WILL FILE WITH THE SECURITIES AND EXCHANGE COMMISSION UPON THE COMMENCEMENT OF THE OFFER. STOCKHOLDERS SHOULD READ THESE MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER. STOCKHOLDERS WILL BE ABLE TO OBTAIN THE OFFER TO PURCHASE AND RELATED MATERIALS WITH RESPECT TO THE TENDER OFFER WHEN THEY BECOME AVAILABLE FOR FREE AT THE SEC'S WEBSITE AT WWW.SEC.GOV OR FROM BVF BY CONTACTING MACKENZIE PARTNERS, INC. TOLL-FREE AT (800) 322-2885 OR COLLECT AT (212) 929-5500 OR VIA EMAIL AT TENDEROFFER@MACKENZIEPARTNERS.COM.

Any forward-looking statements contained in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include, among others: whether the conditions to the offer will be satisfied; the receipt of third party consents to the extent required for the acquisition, general economic factors, business and capital market conditions, general industry trends, changes in tax law requirements and government regulation. There can be no assurances that any transaction will be consummated. Other important factors that could cause actual results to differ materially are included but are not limited to those listed in Avigen's periodic reports and registration statements filed with the Securities and Exchange Commission. BVF undertakes no obligation to update information contained in this release.


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SOURCE Biotechnology Value Fund, L.P.
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