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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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Form 10-K/A

Amendment No. 1

|x  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
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|   | For the fiscal year ended December 31, 2006                                             
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|o  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|   | For the transition period from to                                                       

Commission File Number 0-28272

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Avigen, Inc.(Exact name of registrant as specified in its charter)

Delaware

13-3647113(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification No.)


1301 Harbor Bay ParkwayAlameda, California 94502(Address of principal executive offices, including zip code)

(510) 748-7150(Registrants telephone number, including area code)

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Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each ClassCommon Stock, $0.001 par value
Name of Each Exchange on Which RegisteredThe Nasdaq Stock Market, Inc.




Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer x Non-accelerated filer o

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The aggregate market value of the Common Stock held by non-affiliates of the registrant as of June 30, 2006, was approximately $128,700,000 based upon the closing sale price of the registrants Common Stock as reported on the NASDAQ National Market on such date. Shares of common stock held by each officer and director have been excluded in that such persons may be deemed to be affiliates of the registrant. Shares held by all other stockholders have not been excluded, as no other stockholder holds a percentage of the registrants outstanding Common Stock that the registrant believes is necessary to exercise control over the registrant, nor has any other stockholder otherwise exhibited any ability to exercise control over the registrant.

The number of outstanding shares of the registrants Common Stock as of March 1, 2007, was 25,116,131 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrants definitive Proxy Statement for the 2007 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K, are incorporated by reference in Part III, Items 10-14 of this Form 10-K.

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AVIGEN, INC.

ANNUAL REPORT ON FORM 10-K/AFOR THE FISCAL YEAR ENDED DECEMBER 31, 2006

Explanatory Note to Form 10-K Amendment No. 1

This Amendment No. 1 (this Amendment) to the Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (the Form 10-K) of Avigen, Inc. is being filed for the following purposes:

- To amend Item 1 of Part I to revise the disclosure under the caption Patents and Intellectual Property to make clarifying revisions, and to correct certain typographical errors.
- To amend Item 1A of Part I to revise the risk factor Our success is partly dependent upon our ability to effectively protect our patents and proprietary rights, which we may not be able to do and We may not be able to patent certain formulations of our products in development and may need to rely on protections under the Hatch-Waxman Act to prevent generics from copying our product candidates to provide enhanced disclosure.
- To amend Item 6 of Part II to correct a typographical error.
- To amend Item 14 of Part III to finalize the section heading of the cross-reference to Proposal 3 of the Proxy Statement.
- To amend Item 15 of Part IV and the Exhibit Index to remove the reference to the License Agreement, dated November 21, 2003, by and between the University of Colorado and Avigen, whichshould not have been included in Item 15 and the Exhibit Index.

PART I

Item 1.Business

Overview

Avigen is a biopharmaceutical company focused on developing and commercializing small molecule therapeutics and biologics to treat serious neurological and neuromuscular disorders. Our current lead product candidates primarily address spasticity and neuromuscular spasm and neuropathic pain.

Our goal is to retain rights to commercialize our products in North America and therefore we expect, when appropriate, to build a sales and marketing infrastructure. We intend to seek to out-license rights to develop and market our products outside the United States. We also intend to continue to look for opportunities to expand our pipeline of compounds through a combination of internal research, acquisitions, and in-licensing as appropriate. Avigen, Inc. is a Delaware corporation that was incorporated on October 22, 1992 and is based in the San Francisco Bay Area.

In building our pipeline, we have focused on selecting compounds we believe have the potential to strongly differentiate themselves from existing therapies and address needs currently unmet by, or with an improved risk-benefit profile when compared to, alternative available treatments. In particular, we believe our drug candidates are unique in the solutions they may offer patients in the indications being pursued and have the potential to minimize side-effects, such as sedation, that might otherwise interfere with the resumption of a patients normal living activities. Moreover, our two leading programs, AV650 and AV411, are commercially approved pharmaceuticals outside the United States. We believe this significant human experience in markets outside the U.S. may help accelerate our clinical development and approval for these products in North America.

In January 2006, we acquired exclusive license rights to develop and commercialize proprietary formulations of the compound tolperisone, which we have named AV650, for the North American market. These rights include relevant patent filings, as well as clinical data held by SDI Diagnostics International LTD, a division of Sanochemia Pharmazeutika AG, or Sanochemia relating to AV650. Sanochemia has also agreed to supply AV650 to us exclusively for the North American market. Under the terms of the agreement, we made an upfront payment of $3.0 million and are required to make additional payments to Sanochemia based on the parties achievement of clinical and regulatory product development milestones and sales of AV650.

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Prior to 2003, Avigen focused exclusively on building a product development portfolio of DNA-based drug delivery technologies, based primarily on adeno-associated virus, or AAV vectors we developed. Our efforts included significant investment in early stage research in the field of gene therapy, which led to our filing of three separate Investigational New Drug Applications, or INDs, and our initiation of three corresponding phase I or phase I/II clinical trials. In 2003, we began to pursue the development of non-gene therapy products to diversify our portfolio, which is now our focus. In December 2005, we entered into an agreement with Genzyme Corporation, whereby we assigned to Genzyme our rights to certain AAV-related intellectual property, our gene therapy clinical trial programs for Parkinsons disease and hemophilia, AAV-related contracts, and the use of previously manufactured clinical-grade vector materials. Under the
terms of the agreement, we received a $12.0 million payment and could receive additional development milestones, sublicensing fees and royalty payments based on the successful development of products by Genzyme utilizing technologies previously developed by us. In addition, if Genzyme fails to diligently pursue the commercialization or marketing of products using the assigned technology, as specified in the agreement, certain of the rights we assigned could revert back to Avigen at a future date.

We are a development stage company and have primarily supported the financial needs of our research and development activities since our inception primarily through public offerings and private placements of our equity securities.

Products in Development

AV650 Neuromuscular spasm and spasticity

We are developing AV650 in the North American market for the treatment of disabling neuromuscular spasticity and spasm under a license and supply agreement with SDI Diagnostics International LTD, a division of Sanochemia Pharmazeutika AG. AV650 is an orally administered centrally acting small molecule that is currently marketed by others for the treatment of neuromuscular spasm and spasticity in Europe and Asia. Because of AV650s established record of successful use and safety in many international markets, Avigen is seeking to bring this product to the U.S. market to provide a fast-acting muscle relaxant with no evidence of sedation or alcohol interaction.

In May 2006, we filed an IND, with the U.S. Food and Drug Administration, or FDA, and in June 2006, we announced that we had received approval from the FDA to commence an initial clinical trial of AV650. AV650 is a New Chemical Entity in the U.S.

In October 2006 we completed this initial clinical trial, which was a Phase I study to assess the safety and pharmacokinetic profile of the compound, as well as AV650s lack of sedation in normal volunteers. The Phase I study enrolled 30 healthy adult subjects that received ascending doses under a double blind, placebo-controlled format. No dose-limiting or dose-related increases in adverse events were reported. In addition, the study included an assessment of sedation using clinically validated measures that test cognitive function, including reaction times, visual discrimination, short-term memory, and attention, as well as other tests that measure a subjects subjective assessment of sedation. The initial findings of this study indicated no significant difference from placebo.

In March 2007, we announced that we had received approval to initiate a Phase II clinical trial in the U.S. to assess the safety, tolerability, and initial efficacy of AV650 in spinal cord injury patients suffering from spasticity. This study will also assess the lack of sedation experienced by subjects in the trial at doses up to the levels approved in Europe.

Under the terms of our license agreement, we acquired the North American rights to develop and market AV650 under Sanochemias relevant patent filings, as well as their clinical data relating to AV650. Sanochemia has also agreed to supply AV650 to us exclusively for the North American market.

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AV411 Neuropathic pain and other neurological disorders

AV411 is being developed as a first-in-class oral therapy for the treatment of neuropathic pain and is based on an approved drug, ibudilast, that is currently marketed by others in Japan for a non-pain-related illness. AV411 is a New Chemical Entity in the U.S. and Europe. AV411 is part of our program to investigate glial attenuation as a novel approach to the treatment of neuropathic pain. Glial attenuation results from blocking or reversing the activation of specialized cells in the nervous system known as glial cells, which have been shown in preclinical models to release neurotransmitters that relay pain information to the spinal cord, as well as other substances that increase the excitability of pain-responsive nerve cells. Recent research has demonstrated that blocking the activation of glial cells can reverse neuropathic pain. Based on our research, we have filed for patents protecting the use of AV411 in multiple
clinical indications, as well as for patents on analogs of AV411 which we believe have the potential to be effective second generation molecules.

In June 2006, we announced that we had received approval to initiate a Phase IIa exploratory therapeutic clinical trial with AV411 at the Royal Adelaide Hospital in Adelaide, Australia to assess safety, tolerability and preliminary indication of efficacy in neuropathic pain patients. The Phase IIa trial is a placebo-controlled, double blind study primarily in patients suffering from diabetic neuropathy, a disease affecting the nervous system caused by diabetes. We began recruiting patients in the third quarter and intend to use our experience in this dose-escalating trial to improve the design of a larger U.S. clinical trial.

In February 2007, we announced that we had completed a safety and tolerability study, also with the Royal Adelaide Hospital. The trial was conducted with dose levels of AV411 above the prescribed dosage levels used in Asia for other indications and will be used by us to guide the development of AV411 for neuropathic pain. The study enrolled 18 healthy adult volunteers under a double blind, placebo-controlled format. In the study, two subjects ceased study medications as a result of nausea and vomiting; however, no dose-limiting or dose-related increases in adverse events were reported.

Other indications: chemotherapeutic-induced neuropathy and morphine withdrawal.In connection with our development program, we have studied AV411 in multiple preclinical pain models and have observed promising efficacy for chemotherapeutic-induced neuropathy, a disease affecting the nervous system, as well as the potential for AV411 to counteract certain effects from morphine and other opioids with regard to symptoms of tolerance and withdrawal. Tolerance refers to the need of a patient to require ever-increasing doses to achieve relief from pain. Withdrawal refers to the serious effects of ending opioid therapy due to the addictive properties of the drug.

Our research in animal models suggests that AV411 may allow oncologists to exceed current treatment limits of chemotherapy that often result due to the development of painful sensitivities by their patients. Additionally, other research in animal models suggest that AV411 may help neutralize the effects of opioids by blocking the activation of certain kinds of glial cells in the spinal cord that could extend the use of opioids by physicians to effectively provide relief from pain and help a patients healing process.

AV513 Bleeding disorders, including hemophilia

AV513 is being developed as an oral therapy for the treatment of bleeding disorders. AV513 is a botanical drug based on a carbohydrate molecule which is extracted from sea algae and has a good human safety profile as documented by others in human clinical trials with no reports of adverse events. While outside our strategic focus on neurological and neuromuscular disorders, AV513 leverages our extensive experience with hemophilia. Based on our research, we believe that AV513 has the potential to become the first non-gene therapy and non-Factor approach to treating hemophilia A and B, and other bleeding disorders such as Factor VII deficiency and severe von Willebrands disease. Conventional approved treatments involve frequent intravenous administration of recombinant clotting factor.

In January 2006, data from our research on AV513 were published in Thrombosis and Haemostasis and highlighted by an editorial in the same journal. This data demonstrated that AV513 was safe and able to significantly shorten the bleeding times in a well-studied naturally occurring animal model of severe hemophilia A.

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Gene Therapy Product Development Interests

In connection with our agreement with Genzyme Corporation, we do not have any advisory or operational obligations to support the on-going development of gene therapy products. However, under the terms of the agreement, we retain an opportunity to receive additional revenues in connection with the potential successful development by Genzyme of gene therapy products based on technologies we originally developed. The additional revenues could be from milestone payments, sublicense fees and/or royalties. The potential for us to realize additional revenues under this agreement could extend through approximately 2020, depending on when the last of the patents issued on that issue and subject to the agreement expires. If Genzyme fails to diligently pursue the commercialization or marketing of products using the assigned technology, as specified in the agreement, certain rights assigned to Genzyme under the agreement could revert back to
Avigen at a future date.

Research Programs

Neuropathic Pain

We maintain a small ongoing preclinical research effort to identify additional opportunities to expand our product development pipeline. Our efforts primarily focus on additional treatments for neuropathic pain and include, through external contract laboratories, a medicinal chemistry optimization effort focused on identification of New Chemical Entities with glia-attenuating characteristics similar to those of AV411, but with improved physicochemical properties. We are also pharmacologically testing additional therapeutic indications for AV411.

We continue to investigate, through our collaborators, potential products based on the potent anti-inflammatory cytokine interleukin-10, or IL-10, and related molecules. This research, which is also based on glial cell activation, includes our work with AV333. AV333 is a plasmid, or DNA sequence, that drives the production of IL-10 within the spinal cord to reverse, we believe, the neuropathic pain resulting from glial activation. AV333 is delivered by an injection into the spinal cord similar to the routine procedure used to deliver spinal analgesics. Standardized animal models have shown that AV333 is well-tolerated and dramatically reverses neuropathic pain symptoms for up to ninety days from a single course of treatment. This information was presented at the 8thInternational Conference on Mechanisms and Treatment of Neuropathic Pain in 2005.

Research and Development Expenses

We incurred research and development expenses of approximately $15.2 million, $13.8 million, and $19.3 million in 2006, 2005, and 2004, respectively. During these years, we did not receive any reimbursements from governmental or other research grants or any other third parties to offset our expenses. As of December 31, 2006, we were party to one collaborative agreement with the University of Colorado, under which we received partial reimbursement for certain research and development expenses under a grant by the National Institutes of Health. We do not expect future reimbursements under this agreement to have a material impact on our financial statements.

Strategic Relationships and Manufacturing

Research and commercial collaborations will continue to play a significant role in our business strategy. We have built strategic relationships with recognized scientists, clinicians and opinion leaders in the fields that our product candidates address. We feel these relationships, including our relationship with the University of Colorado, enhance the potential of our portfolio of products by providing us with additional resources with the capacity to accelerate a broader array of research testing and by advising us on the latest scientific advances relevant to our needs. We have also established a commercial collaboration with Sanochemia. Under the terms of this collaboration, we have acquired North American development and marketing rights to AV650 and have access to data from Sanochemias non-U.S. research studies that we believe may help accelerate the pace of our clinical development in the U.S.

We also expect to rely on strategic relationships with third-party manufacturers of the compounds used for our product candidates. We believe that third-party suppliers, such as Sanochemia for AV650, can manufacture high quality drug substance and final drug products in a cost effective manner for use both in our clinical trials and for commercial sale. We believe these third-party suppliers are compliant with the FDAs current Good Manufacturing Practices.

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In our AAV transaction with Genzyme Corporation, we sought a company that we believed had the resources and commitment to continue the development of products using AAV-based technologies. Through this transaction, we retained the potential for future financial participation in the success of AAV products through contingent development milestones and royalty and licensing fees. In addition, we delivered on managements commitment to enable work based on AAV technologies we developed to continue for the benefit of patients suffering from Parkinsons disease and hemophilia.

As we continue to identify new development opportunities for compounds in our product candidate portfolio or acquire access to new product candidates, we intend to continue to evaluate opportunities to increase the potential success of these investments through strategic relationships. These may take the form of additional research and development or manufacturing and supply agreements. We may also seek to license out development and marketing rights to our existing products outside the U.S. If we acquire access to new products or identify new development opportunities for our compounds, including through strategic relationships, we may fund such transactions with the issuance of additional equity securities, which may further dilute our existing stockholders.

Competition

Pharmaceutical drug development is characterized by rapidly evolving technology and intense competition. Many companies of all sizes, including major pharmaceutical companies and specialized biotechnology companies, engage in activities similar to our activities. Many of the companies we compete with have substantially greater financial and other resources and larger research and development and clinical and regulatory affairs staffs. We expect our products, if approved, will face competition from both branded pharmaceuticals and generic compounds. In addition, colleges, universities, governmental agencies and other public and private research organizations continue to conduct research and are becoming more active in seeking patent protection and licensing arrangements to collect royalties for use of technologies that they have developed. We also must compete with these institutions in recruiting highly qualified scientific personnel.
Some of our competitors products and technologies are in direct competition with ours. In addition, we are aware that physicians may utilize other products in an off-label manner for the treatment of disorders we attempt to target.

Neuromuscular Spasm and Spasticity.Therapies for acute and chronic spasm and spasticity include:

- Skelaxin - metaxalone, by King Pharmaceuticals
- Flexeril  cyclobenzaprine by McNeil Consumer & Specialty Pharmaceuticals
- Zanaflex - tizanidine, by Acorda Therapeutics
- Lioresal - baclofen, by Novartis, and
- Soma - carisoprolol, by Wallace Laboratories.

GW Pharmaceuticals has recently announced that they will be pursuing a spasticity indication for Sativex, their cannabinoid product marketed in Canada for pain associated with multiple sclerosis and in development in North America and Europe for pain and spasticity associated with multiple sclerosis and other diseases. We anticipate that our products will compete with all of these products. Controlled release formulations or other delivery or dosage forms of these products may be in development and generic versions of many of them are also available.

Neuropathic Pain.Therapies for chronic pain range from over-the-counter compounds, such as aspirin, to opioids, such as morphine. We anticipate that our products will compete with other drugs that are currently prescribed by physicians, including anti-epileptics such as: Neurontin, also referred to as gabapentin by Pfizer, Lyrica, also referred to as pregabalin by Pfizer; and antidepressants, including Cymbalta, also referred to as duloxetine, by Eli Lilly & Co. We are aware of additional compounds for chronic neuropathic pain that are currently in development at numerous companies including Bayer, GlaxoSmithKline, Merck & Co., Inc., Novartis AG, Pfizer, Cognetix, Inc., GW Pharmaceuticals plc, Indevus Pharmaceuticals, Inc., Nastech Pharmaceutical Company Inc., Avanir Pharmaceuticals, and Pain Therapeutics, Inc.

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Companies that complete clinical trials, obtain required regulatory approvals, and commence commercial sales of their products before their competitors may achieve a significant competitive advantage. In order to compete successfully, we must develop proprietary or otherwise protected positions in products for therapeutic markets that have not been satisfactorily addressed by current alternatives. These products, even if successfully tested and developed, may not be adopted by physicians over other products and may not offer economically feasible alternatives to other therapies.

Marketing and Sales

We have retained rights to commercialize our current portfolio of products, except that we only have the right to develop and market AV650 in the North America markets, and expect to build marketing and sales capabilities using our own resources. However, we currently do not have a marketing or sales staff. If we are successful in achieving FDA approval of any of our product candidates, we will need to build a commercial capability. There is no assurance that we will be able to build our own commercial organization with our current resources.

Patents and Intellectual Property

Patents and other proprietary rights are important to our business. We seek to procure patent protection for our anticipated products, or obtain protection from the relevant patents owned by our licensors. Our intellectual property strategy is to file patent applications that protect our technology, inventions and improvements to our inventions that we consider commercially important to the development of our business. We also rely on a combination of trade secrets, know-how and licensing opportunities to develop and protect intellectual property rights pertaining to our products and technology.

As of March 1, 2007, we owned, co-owned, or held licenses to 1 issued U.S. patent which expires in 2019 and 16 pending U.S. patent applications, as well as corresponding-pending non-U.S. patent applications. The patent applications are primarily related to our development portfolio of small molecule-based products and are currently directed to methods of treating various indications using AV411 and formulations of AV650 and AV513.

Some of the compounds used in our development products have been previously patented by others. When we identify previously patented technologies that we believe are critical to the development and commercialization of our products, we seek to in-license such rights under the most favorable terms. Such licenses normally last for the life of the underlying patent. Licenses typically require us to pay license fees and royalties based on the net sales of products that fall within the scope of the license. Some licenses require us to exercise our best efforts or another level of efforts to achieve research, clinical, and commercial milestones and may require us to make additional payments upon the completion of such milestones. Our failure to be diligent or achieve any required development milestones or to negotiate appropriate extensions of any of our license agreements or to make all required milestone and royalty payments when due, and
the subsequent decision of any such institution to terminate such license, could have a material adverse effect on our financial position.

The exclusive license that we feel is important to our future commercial interests in our development products is:

Sanochemia.In January 2006, we entered into an agreement with Sanochemia for rights to develop and market AV650 in North America. We paid an initial license fee of $3 million and will make additional milestone and royalty payments based on the success of the parties development and commercialization of AV650. Additionally, we must pay to purchase the supply of AV650 formulations from Sanochemia. The license is exclusive for the duration of the patent and pending patent applications, should they issue. Under the agreement, we must be diligent in our development of one and under certain circumstances up to two formulations of AV650, and must purchase from Sanochemia, and Sanochemia must supply us exclusively with, our requirements of AV650 formulations for North America. We are reliant on this license to develop AV650.

In addition, we have the following exclusive license:

University of Colorado.In November, 2003, we entered into an agreement with the University of Colorado for rights to certain intellectual property related to the treatment of chronic pain with AV333. The license is exclusive for the duration of any issued patents embodying the licensed intellectual property, or until approximately 2023. Our license may convert to a non-exclusive license or may be terminated by the University of Colorado if we fail to meet our diligence obligations. Although our development of AV411 for neuropathic pain is not subject to the intellectual property underlying this agreement, we continue to explore the use of AV411 for additional indications in collaboration with the University of Colorado, and have expanded the scope of the agreement to incorporate additional intellectual property jointly developed by the two parties.

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We cannot assure you that the claims in our pending patent applications will be issued as patents, that any issued patents will provide us with significant competitive advantages, or that the validity or enforceability of any of our patents will not be challenged or, if instituted, that these challenges will not be successful. The cost of litigation to uphold the validity and prevent infringement of our patents could be substantial. Furthermore, we cannot assure you that others will not independently develop similar technologies or duplicate our technologies or design around the patented aspects of our technologies. We can provide no assurance that our proposed technologies will not infringe patents or rights owned by others, the licenses to which might not be available to us.

In addition, if we pursue patent applications in foreign countries, their approval processes for patent applications may differ significantly from the processes in the U.S. The patent authorities in each country administer that countrys laws and regulations relating to patents independently of the laws and regulations of any other country and the patents must be sought and obtained separately. Therefore, issuance of a patent in one country does not necessarily indicate that it can be obtained in other countries. Our policy is to make a case-by-case determination as to whether to file a foreign application to correspond to each of our U.S. applications. Sometimes we decide not to do so. We make the decision with respect to each patent application on a country-by-country basis.

Gene Therapy-Related Patents

In December 2005, we transferred the intellectual property rights, including in-licenses, for our AAV gene therapy-based products to Genzyme Corporation. Under the terms of the agreement, we assigned to Genzyme our rights to certain AAV-related intellectual property, our gene therapy clinical trial programs for Parkinsons disease and hemophilia, certain AAV-related contracts, and the use of previously manufactured clinical-grade vector materials. These intellectual property rights included 62 U.S. and international patents owned by us. However, if Genzyme fails to diligently pursue the commercialization and marketing of products using the assigned technology, as specified in the agreement, certain of the technology we assigned could revert back to Avigen at a future date, Under the terms of the agreement, Avigen received a $12 million payment and could receive  future milestone, sublicensing fees and royalty payments based
on the successful development of products by Genzyme utilizing technologies previously developed by us.

Government Regulation

The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries regulate extensively the clinical development, manufacture, distribution and sale of pharmaceutical products. These agencies and other federal, state and local entities regulate research and development activities and the testing, manufacture, quality control, safety, effectiveness, labeling, storage, distribution, record keeping, approval and promotion of our development products. All of our products will require regulatory approval before commercialization. In particular, therapeutic products for human use are subject to rigorous preclinical and clinical testing and other requirements of the Federal Food, Drug, and Cosmetic Act, implemented by the FDA, as well as similar statutory and regulatory requirements of foreign countries and supervisory review boards affiliated with institutions that may perform our clinical trials.

Obtaining marketing approvals and subsequently complying with ongoing statutory and regulatory requirements is costly and time consuming. Any failure by us or our collaborators, third-party manufacturers, licensors or licensees to obtain, or any delay in obtaining regulatory approval or in complying with other requirements, could adversely affect the commercialization of products then being developed by us and our ability to receive product or royalty revenues.

This process of clinically testing drugs and seeking approval to market them can take a number of years and typically requires substantial financial resources. The results of preclinical studies and initial clinical trials are not necessarily predictive of the results from large-scale clinical trials. All clinical trials may be subject to additional costs, delays or modifications due to a number of factors, including the difficulty in obtaining enough subjects, clinical investigators, drug supply, or financial support, or because of unforeseen adverse effects. In addition, as a condition of approval, the FDA also can require further testing of the product and monitoring of the effect of commercialized products, and the agency has the power to prevent or limit further marketing of a product based on the results of these post-marketing programs. Upon approval, a drug product may be marketed only in those dosage forms and for those
indications for which it is approved.

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In addition to obtaining FDA approval for each indication to be treated with each product, each domestic drug product manufacturing establishment must register with the FDA, list its drug products with the FDA, comply with current Good Manufacturing Practices and pass inspections by the FDA. Manufacturers of biological products also must comply with FDA general biological product standards. Moreover, the submission of applications for marketing approval from the FDA may require additional time to complete manufacturing stability studies. Foreign establishments manufacturing drug products for distribution in the United States also must list their products with the FDA and comply with current Good Manufacturing Practices. They also are subject to periodic inspection by the FDA or by local authorities under agreement with the FDA. If we rely on strategic relationships with third-party manufacturers, with either U.S. or foreign
manufacturing establishments, as with Sanochemia, we may not be able to ensure effective compliance with these FDA requirements, which could impact the timing and potential success of our development and commercialization of our potential products. Because our current facilities are located in California, if we decide to manufacture any of our products in our facilities that are administered to humans, including products used for testing in clinical trials, we would also be required to obtain a drug manufacturing license from the State of California.

Other Regulations

In addition to regulations enforced by the FDA, in the U.S. we are also subject to regulation under the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, and other federal, state and local regulations. Our research and development activities involve the controlled use of hazardous materials, chemicals, biological materials, and various radioactive compounds. Although we believe that our safety procedures for handling and disposing of these materials comply with the standards prescribed by state and federal regulations, we could be held liable for any damages that result from accidental contamination or injury and this liability could exceed our resources. In addition, our handling, care, and use of laboratory rodents are subject to the Guide for the Care and Use of laboratory Animals published by the National Institutes of Health.

Our clinical trials may also involve subjects who reside outside of the U.S. which can involve subsequent monitoring of the subjects responses at clinical sites outside the U.S. where other regulations apply.

Employees

As of March 1, 2007, Avigen had 33 full-time employees, including ten with Ph.D. degrees and two with M.D. degrees. Approximately 21 employees are involved in our research and development activities, including research, preclinical development, clinical and regulatory affairs, and quality assurance and quality control, and 12 employees are involved in general administration, finance, legal, and business development activities. We also rely on a number of temporary staff positions and third-party consultants to supplement our workforce. None of our employees are represented by a collective bargaining agreement nor have we ever experienced a work stoppage. We believe that our relationship with our employees is good.

Revenues

Our revenues in 2006, 2005 and 2004 were $0.1 million, $12.0 million and $2.2 million, respectively. Revenue for 2006 represented income from our participation with the University of Colorado on a grant that was funded by the National Institutes of Health. Revenue for 2005 was primarily related to the payment received from Genzyme Corporation in connection with our transfer to them of certain AAV gene therapy assets. Revenue from 2004 was primarily related to the accelerated recognition of deferred revenue previously recorded in connection with a $2.5 million payment received from Bayer Corporation in 2003 under the terms of a collaboration agreement for the development of an AAV-based gene therapy product for hemophilia. The development of the product candidate was terminated during the year, which led to the accelerated recognition of the remaining deferred revenue at the time of termination. All of our revenues were from companies
located in the United States, and all of our long-lived assets are located in the United States. See Item 8. Financial Statements and Supplementary Data for more information regarding our financial performance.

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Available Information and Website Address

Our website address is www.avigen.com; however, information found on our website is not incorporated by reference into this Annual Report on Form 10-K. We file electronically with the Securities and Exchange Commission our annual reports on Form 10-K, quarterly interim reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. We make available on or through our website, free of charge, copies of these reports as soon as reasonably practicable after we electronically file or furnish it to the SEC. You can also request copies of such documents by contacting our Investor Relations Department at (510) 748-7150 or sending an email to ir@avigen.com.

Item 1A.Risk Factors

This section briefly discusses certain risks that should be considered by stockholders and prospective investors in Avigen. Many of these risks are discussed in other contexts in other sections of this report.

Risks Related to Our Business

We expect to continue to operate at a loss and we may never achieve profitability     Since our inception in 1992, we have not been profitable, and we cannot be certain that we will ever achieve or sustain profitability. To date, we have been engaged in research and development activities and have not generated any revenues from product sales. As of December 31, 2006, we had an accumulated deficit of $195.5 million. Developing new compounds will require significant additional research and development activities, including preclinical testing and clinical trials, and regulatory approval. We expect these activities, together with our general and administrative expenses, to result in operating losses for the foreseeable future. Our ability to achieve profitability will depend, in part, on our ability to successfully identify, acquire and complete development of proposed products, and to obtain
required regulatory approvals and manufacture and market our approved products directly or through business partners.

If we are able to enhance our existing pipeline of product candidates through the in-license or other acquisition of additional development candidates, we may expose ourselves to new risks that were not identified prior to negotiating the in-license or other acquisition agreement that may prevent us from successfully developing or commercializing our product candidates     Even if we are able to in-license or acquire potential products, we may fail to identify risks during our due diligence efforts, or new risks may arise later in the development process of our product candidates, that we may be unable to adequately address. If we are unable to address such previously unidentified risks in a timely manner, we will have paid too much for the acquisition or in-license of the potential product, and our business and results of operations will be harmed.

Our historic research and development activities have primarily focused on our gene delivery products, which raises uncertainty about our ability to develop and commercialize more conventional small molecule product candidates effectively     We have limited experience in developing or commercializing conventional small molecule product candidates. If we are unable to effectively develop any of the products in our development portfolio or any new products we in-license or acquire, it would significantly reduce our ability to create commercial opportunities for such products.

Many potential competitors who have greater resources and experience than we do may develop products and technologies that make ours non-competitive or obsolete     There are many entities, both public and private, including well-known, large pharmaceutical companies, chemical companies, biotechnology companies and research institutions engaged in developing pharmaceuticals for neurological and other applications similar to those that may be targeted by us. Competitors may succeed in developing products that are more effective and less costly than any that we develop and also may prove to be more successful in the manufacturing and marketing of products, which would render the products that we develop non-competitive or obsolete. Furthermore, many of our competitors are more experienced than we are in drug development and commercialization, obtaining regulatory approvals, and product manufacturing
and marketing. Accordingly, our competitors may succeed in obtaining regulatory approval for products more rapidly and more effectively than we do. Any product that we successfully develop and for which we gain regulatory approval must then compete for market acceptance and market share. Accordingly important competitive factors, in addition to completion of clinical testing and the receipt of regulatory approval, will include product efficacy, safety, timing and scope of regulatory approvals, availability of supply, marketing and sales capacity, reimbursement coverage, pricing and patent protection.

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We are aware that other companies are conducting preclinical studies and clinical trials for products that could compete with products we intend to acquire or develop. See Item 1. Business -- Competition for a more detailed discussion of the competition we face.

The regulatory process is expensive, time consuming and uncertain and may prevent us from obtaining required approvals for the commercialization of our product candidates     Prior to marketing in the United States, any product developed by us must undergo rigorous preclinical testing and clinical trials as well as an extensive regulatory approval process implemented by the FDA. This process is lengthy, complex and expensive, and approval is never certain. Positive results from preclinical studies and early clinical trials do not ensure that positive results will be demonstrated in clinical trials designed to permit application for regulatory approval.

Potential problems we may encounter in the implementation stages of our studies include the chance that we may not be able to conduct clinical trials at preferred sites, obtain sufficient test subjects, or begin or successfully complete clinical trials in a timely fashion, if at all. Furthermore, the FDA may temporarily suspend clinical trials at any time if it believes the subjects participating in trials are being exposed to unacceptable health risks, if it finds deficiencies in the clinical trial process or conduct of the investigation, or to better analyze data surrounding any unexpected developments.

Because of the risks and uncertainties in biopharmaceutical development, our products could take a significantly longer time to gain regulatory approval than we expect or may never gain FDA approval. If we do not receive these necessary approvals from the FDA, we will not be able to generate substantial revenues or become profitable.

We may not be successful in obtaining required foreign regulatory approvals, which would prevent us from marketing our products internationally     We cannot be certain that we will obtain any regulatory approvals in other countries. In order to market our products outside of the United States, we must comply with numerous and varying foreign regulatory requirements implemented by foreign regulatory authorities. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ from that required to obtain FDA approval. Foreign regulatory approval process includes all of the risks associated with obtaining FDA approval set forth above, and approval by the FDA does not ensure approval by the regulatory authorities of any other country.

If we fail to comply with regulatory requirements, or if we experience unanticipated problems with our approved products, our products could be subject to restrictions or withdrawal from the market     Any product for which we obtain marketing approval from the FDA, along with the manufacturing processes, post-approval clinical data collection and promotional activities for such product, will be subject to continual review and periodic inspection by the FDA and other regulatory bodies. After approval of a product, we will have significant ongoing regulatory compliance obligations. Later discovery of previously unknown problems with our products or manufacturing processes, or failure to comply with regulatory requirements, may result in penalties or other actions, including removal of a product or products from the market.

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We may need to secure additional financing to acquire and complete the development and commercialization of our products     At December 31, 2006 we had cash, cash equivalents, available-for-sale securities, and restricted investments of approximately $70.8 million. We anticipate that our existing capital resources as of December 31, 2006 will be adequate to fund our needs for approximately two to three years. However, beyond that, or earlier if we are successful in pursuing additional indications for compounds in our portfolio or acquiring additional product candidates, we may require additional funding to complete the research and development activities currently contemplated, to acquire new products, and to commercialize our products. Our future capital requirements will depend on many factors, including:

- continued scientific progress in research and development programs;
- the scope and results of preclinical studies and clinical trials;
- the time and costs involved in obtaining regulatory approvals;
- the costs involved in filing, prosecuting and enforcing patent claims and other intellectual property rights;
- the costs involved in obtaining licenses to patented technologies from third parties that may be needed to commercialize our products;
- how successful, if at all, we are at expanding our drug development portfolio through a combination of internal research, acquisitions, and in-licensing compounds, and the nature of the consideration we pay for acquiring or in-licensing compounds;
- competing technological developments;
- the cost of manufacturing for clinical trials and commercialization;
- the cost of commercialization activities; and
- other factors which may not be within our control.

We will need to obtain additional funding prior to the time, if any, that we are able to market any product candidates. We cannot assure our investors that we will be able to enter into financing arrangements on acceptable terms or at all. Without additional funding, we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs.

We expect to depend on third parties to manufacture compounds for our product candidates. If these manufacturers fail to meet our requirements and the requirements of regulatory authorities, our business, financial condition and results of operations could be harmed     We intend to use third parties to manufacture active pharmaceutical ingredients and supplies for our product candidates. For example, we rely entirely on Sanochemia to manufacture and supply to us AV650 for both clinical and commercial supply. We have entered into an exclusive arrangement with them for this. We have no experience in manufacturing small molecule compounds and do not have any manufacturing facilities. If we are unable to enter into supply and processing contracts with third party manufacturers or processors for our other product candidates, or even if we are able to enter into supply and processing contracts, if
Sanochemia or such other manufacturers or processors are unable to or do not satisfy our requirements, or if disputes arise between us and our suppliers, we may experience a supply interruption and we may incur additional cost and delay in the clinical development or commercialization of our products. If we are required to find an additional or alternative source of supply, there may be additional cost and delay in the development or commercialization of our products. Furthermore, with AV650, under certain conditions specified in the contract Sanochemia is required to establish secondary sources. In this and any future exclusive supply contracts for our full requirements, we are or will be particularly reliant on our suppliers. Additionally, the FDA inspects all commercial manufacturing facilities before approving a New Drug Application for a drug manufactured at those sites. If any of our manufacturers or processors fails to pass the FDA inspection, our clinical trials, the potential approval and
eventual commercialization of our products may be delayed.

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If we are able to bring our potential products to market, we will face a number of risks outside of our control as we may be dependent on others to market our products, as well as to facilitate demand for our products     Even if we are able to develop our potential products and obtain necessary regulatory approvals, we have no experience in marketing or selling any of our proposed products. We currently do not have a marketing or sales staff. If we are successful in achieving FDA approval of any product candidate, including any product that we may acquire as a result of our business development efforts, we will need to build a commercial capability. The development of a marketing and sales capability will require significant expenditures, management resources and time. We may be unable to build such a sales force, the cost of establishing such a sales force may exceed any product revenues, or our
marketing and sales efforts may be unsuccessful. We may not be able to find a suitable sales and marketing partner for our products. If we are unable to successfully establish a sales and marketing capability in a timely manner or find suitable sales and marketing partners, our business and results of operations will be harmed. Even if we are able to develop a sales force or find a suitable marketing partner, we may not successfully penetrate the markets for any of our proposed products.

We intend to enter into distribution and marketing agreements with other companies for our products outside the U.S. and do not anticipate establishing our own foreign sales and marketing capabilities for any of our potential products in the foreseeable future. If any of our foreign marketing partners do not perform under future agreements, we would need to identify an alternative marketing and distribution partner, or market this product ourselves, and we may not be able to establish adequate marketing capabilities for this product.

Our success is dependent on acceptance of our products. We cannot assure you that our products will achieve significant market acceptance among patients, physicians or third-party payers, even if we obtain necessary regulatory and reimbursement approvals. Failure to achieve significant market acceptance will harm our business. In addition, we cannot assure you that these products will be considered cost-effective and that reimbursement to the consumer will be available or will be sufficient to allow us to sell our products on a profitable basis. In both the United States and elsewhere, sales of medical products and treatments are dependent, in part, on the availability of reimbursement to the consumer from third-party payers, such as government and private insurance plans. Third-party payers are increasingly challenging the prices charged for medical products and services. We cannot predict whether any legislative or regulatory
proposals will be adopted or the effect that such potential proposals or managed care efforts may have on our business.

We may be unable to attract and retain the qualified employees, consultants and advisors we need to be successful     We are highly dependent on key members of our senior management and scientific staff. The loss of any of these persons could substantially impair our research and development efforts and impede our ability to develop and commercialize any of our products. Recruiting and retaining qualified scientific, technical and managerial personnel will also be critical to our success. Biotechnology and pharmaceutical personnel with these skills are in high demand. As a result, competition for and retention of personnel, particularly for employees with technical expertise, is intense and the turnover rate for these people can be high.

In addition, we rely on consultants and advisors to assist us in formulating our research and development strategies. A majority of our scientific advisors are engaged by us on a consulting basis and are employed on a full-time basis by others. We have limited control over the activities of these scientific collaborators which often limit their availability to us. Failure of any of these persons to devote sufficient time and resources to our programs could delay our progress and harm our business. In addition, some of these collaborators may have consulting or other advisory arrangements with other entities that may conflict or compete with their obligations to us.

We face the risk of liability claims which may exceed the scope or amount of our insurance coverage     The manufacture and sale of medical products entails significant risk of liability claims. We currently carry liability insurance; however, we cannot assure you that this coverage will remain in place or that this coverage will be adequate to protect us from all liabilities which we might incur in connection with the use of our products in clinical trials or the future use or sale of our products upon commercialization. In addition, we may require increased liability coverage as additional products are used in clinical trials and commercialized. This insurance is expensive and may not be available on acceptable terms in the future, if at all. A successful liability claim or series of claims brought against us in excess of our insurance coverage could harm our business. We must indemnify certain
of our licensors against any liability claims brought against them arising out of products developed by us under these licenses.

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Our use of hazardous materials exposes us to the risk of environmental liabilities, and we may incur substantial additional costs to comply with environmental laws in connection with the operation of our research and manufacturing facilities     We use radioactive materials and other hazardous substances in our research and development operations.As a result, we are potentially subject to substantial liabilities related to personal injuries or property damages they may cause. In addition, clean up costs associated with radioactivity or other hazardous substances, and related damages or liabilities could be significant and could harm our business. We do not believe that our current level of use of these controlled substances will require any material capital expenditures for environmental control facilities for the next few years. We are also required to comply
with increasingly stringent laws and regulations governing environmental protection and workplace safety which could impose substantial fines and criminal sanctions for violations. If we were to fail to maintain compliance with these laws and regulations we could require substantial additional capital.

The testing of our potential products relies heavily on the voluntary participation of subjects in our clinical trials, which is not within our control, and could substantially delay or prevent us from completing development of such products     The development of our potential products is dependent upon collecting sufficient data from human clinical trials to demonstrate safe and effective results. We experienced delays in enrolling subjects in our previous gene therapy clinical trials, and we may experience similar difficulties with our current products in the future. Any delay or failure to recruit sufficient numbers of subjects to satisfy the level of data required to be collected under our clinical trial protocols could prevent us from developing any products we may target.

AAV Gene therapy technology is new and developing rapidly and Genzyme Corporation may face delays in developing products based on technologies included in our assignment agreement, in which case we may not receive any additional milestone, sublicensing fees or royalty revenues in connection with the agreement     Development of drug products, including gene therapy products, is unpredictable and is subject to many risks and uncertainties. We are not aware of any gene therapy products that Genzyme Corporation has fully developed or for which it has received regulatory approval for commercial sale in the U.S. As such, we face the risk that they will not be able to develop or receive regulatory approval for commercial sale of any product candidates that might utilize technologies included in our assignment agreement. Therefore, we may never receive any additional milestone, sublicensing fees or
royalty revenues in connection with our previous work on AAV gene therapy activities.

Risks Related to Our Intellectual Property

Our success is partly dependent upon our ability to effectively protect our proprietary rights, which we may not be able to do     Our success will depend to a significant degree on our ability to obtain patents and licenses to patent rights, preserve trade secrets, to obtain protection under the Hatch-Waxman Act for our products for which we are not able to obtain patent protection, as discussed below, and to operate without infringing on the proprietary rights of others. If we are not successful in these endeavors, our business will be substantially impaired.

To date, we have filed a number of patent applications in the U.S. relating to technologies we have developed or co-developed. In addition, we have acquired licenses to one patent and certain pending patent applications. We cannot guarantee that patents will issue from these applications or that any patent will issue on technology arising from additional research or, if patents do issue, that claims allowed will be sufficient to protect our technologies.

The patent application process takes several years and entails considerable expense. The failure to obtain patent protection on the technologies underlying certain of our proposed products may have a material adverse effect on our competitive position and business prospects. Important legal issues remain to be resolved as to the scope of patent protection for biotechnology and pharmaceutical products, and we expect that administrative proceedings, litigation, or both may be necessary to determine the validity and scope of our and others patents. These proceedings or litigation may require a significant commitment of our resources in the future.

If patents can be obtained, we cannot assure you that any of these patents will provide us with any competitive advantage. Others may independently develop similar technologies or duplicate any technology developed by us, and patents may be invalidated or held unenforceable in litigation.

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Certain of our product candidates use active compounds that do not have composition-of-matter patent protection. For example, in our AV650 program, the composition of matter patent on the active compound has expired. For that candidate, we intend to rely, if our patents issue, primarily on formulation and, potentially, use patent claims, combined with any available regulatory exclusivity, rather than more traditional composition-of-matter patent claims on the active ingredient itself. Formulation and use coverage may not be effective in preventing others from marketing the active compound in competition with us. As another example, in our AV411 program, the composition of matter patent on the active compound has also expired. We have filed and own patent applications on its use for the indications for which we are developing AV411. However, we cannot assure you that these patent applications, even if they one day issue as patents,
will effectively prevent others from marketing the same drug for the indications currently claimed by our patent applications. We are aware that Medicinova is conducting preclinical studies and clinical trials for a product that contains the active compound contained in our AV411 product for use with multiple sclerosis.

We also rely on a combination of trade secret and copyright laws, employee and third-party nondisclosure agreements and other protective measures to protect intellectual property rights pertaining to our products and technologies. We cannot be certain that these measures will provide meaningful protection of our trade secrets, know-how or other proprietary information. In addition, the laws of certain foreign countries do not protect our intellectual property rights to the same extent as do the laws of the United States. We cannot assure you that we will be able to protect our intellectual property successfully.

We may not be able to patent certain formulations of our products in development and may not be able to obtain adequate protection under the Hatch-Waxman Act to prevent generics from copying our product candidates     Certain of our products in development, including AV650 and AV411, are molecules that are in the public domain. While we are working to obtain patent protection for our formulations, manufacturing processes, and uses of these molecules, there is no guarantee that we will be able to do so. In cases where no patent protection can be obtained, limited regulatory exclusivity providing protection against generic competition can be obtained under the Hatch-Waxman Act if we are the first to obtain regulatory approval to market these compounds in the U.S. There is no guarantee that we will be able to do so. For example, Medicinova is conducting preclinical studies and clinical trials for a
product that contains the active compound contained in our AV411 product for use with multiple sclerosis, and if Medicinova is able to obtain new chemical entity designation for this compound, it would limit the extent of the protection we might otherwise be able to obtain against generic competition under the Hatch-Waxman Act for AV411. Biotechnology or pharmaceutical companies with greater financial and personnel resources may be able to obtain regulatory approval to market one or more of these compounds prior to our obtaining such approval. Failure to obtain patent protection or regulatory exclusivity will adversely impact our ability to commercialize our products and realize a positive return on our investment.

Other persons may assert rights to our proprietary technology, which could be costly to contest or settle     Third parties may assert patent or other intellectual property infringement claims against us with respect to our products, technologies, or other matters. Any claims against us, with or without merit, as well as claims initiated by us against third parties, can be time-consuming and expensive to defend or prosecute and resolve. There may be third-party patents and other intellectual property relevant to our products and technology which are not known to us. We have not been accused of infringing any third partys patent rights or other intellectual property, but we cannot assure you that litigation asserting claims will not be initiated, that we would prevail in any litigation, or that we would be able to obtain any necessary licenses on reasonable terms, if at all. If our competitors
prepare and file patent applications in the U.S. that claim technology also claimed by us, we may have to participate in interference proceedings declared by the Patent and Trademark Office to determine priority of invention, which could result in substantial cost to us, even if the outcome is favorable to us. In addition, to the extent outside collaborators apply technological information developed independently by them or by others to our product development programs or apply our technologies to other projects, disputes may arise as to the ownership of proprietary rights to these technologies.

We may be required to obtain rights to proprietary genes and other technologies to further develop our business, which may not be available or may be costly     We currently investigate and use certain gene sequences or proteins encoded by those sequences, including the IL-10 gene, and manufacturing processes that are or may become patented by others. As a result, we may be required to obtain licenses to these gene sequences or proteins or other technology in order to test, use or market products. We may not be able to obtain these licenses on terms favorable to us, if at all. In connection with our efforts to obtain rights to these gene sequences or proteins or other technology, we may find it necessary to convey rights to our technology to others. Some of our products may require the use of multiple proprietary technologies. Consequently, we may be required to make cumulative royalty payments to
several third parties. These cumulative royalties could become commercially prohibitive. We may not be able to successfully negotiate these royalty adjustments to a cost effective level, if at all.

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If we do not fulfill our obligations under our in-license agreements, including our in-license for AV650, we may not be able to retain our rights under those agreements and may be forced to cease our activities with the affected product candidate or technology     We have entered into license agreements with third parties for technologies related to our product development programs. Typically, we have obligations under these agreements to diligently pursue commercialization of products using the technologies licensed to us, among other obligations including payment, patent prosecution, information-sharing and licensing obligations. We have these kinds of obligations to Sanochemia under our AV650 agreement with them. If we fail to fulfill our obligations under these agreements and fail to obtain a waiver of any material failure to fulfill such obligations, the licensor may terminate these license
agreements. Termination of any of our license agreements could harm our business and force us to cease our activities with the affected product candidate or technology.

Similarly, if disputes arise between us and our licensors, our rights to the licensed product candidates and technologies could be threatened. In addition, any such dispute could harm us through taking our managements time and attention to resolve the dispute.

Risks Related to Our Stock

Anti-takeover effects of certain charter provisions and Delaware law may negatively affect the ability of a potential buyer to purchase some or all of our stock at an otherwise advantageous price, which may limit the price investors are willing to pay for our common stock     Certain provisions of our charter and Delaware law may negatively affect the ability of a potential buyer to attempt a takeover of Avigen, which may have a negative effect on the price investors are willing to pay for our common stock. For example, our board of directors has the authority to issue up to 5,000,000 shares of preferred stock and to determine the price, rights, preferences, and privileges of those shares without any further vote or action by the stockholders. This would enable the Board of Directors to establish a shareholder rights plan, commonly referred to as a poison pill, which would have the
effect of making it more difficult for a third party to acquire a majority of the outstanding voting stock of Avigen. In addition, our board of directors is divided into three classes, and each year on a rotating basis the directors of one class are elected for a three-year term. This provision could have the effect of making it less likely that a third party would attempt to obtain control of Avigen through Board representation. Furthermore, certain other provisions of our restated certificate of incorporation may have the effect of delaying or preventing changes in control or management, which could adversely affect the market price of our common stock. In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law.

Our stock price is volatile, and as a result investing in our common stock is very risky     From January 1, 2005 to March 1, 2007, our stock price has fluctuated between a range of $2.63 and $7.44 per share. We believe that various factors may cause the market price of our common stock to continue to fluctuate, perhaps substantially, including announcements of:

- technological innovations or regulatory approvals;
- results of clinical trials;
- new products by us or our competitors;
- developments or disputes concerning patents or proprietary rights;
- achievement or failure to achieve certain developmental milestones;

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- public concern as to the safety of pharmaceutical products;
- health care or reimbursement policy changes by governments or insurance companies;
- developments of significant acquisitions or in relationships with corporate partners;
- announcements by us regarding financing transactions and/or future sales of equity securities; or
- changes in financial estimates or securities analysts recommendations.

In addition, in recent years, the stock market in general, and the shares of biotechnology and health care companies in particular, have experienced extreme price fluctuations. These broad market and industry fluctuations may cause the market price of our common stock to decline dramatically.

PART II

Item 6.Selected Financial Data

The following tables should be read in conjunction with Managements Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of this report and the financial statements and related notes included in Item 8 of this report.

|                                 |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  | Period     
|-------------------------------- |  | ----------------------- | ---------- | ------------ | ---- | - | ---------- | - | ---- | - | ---------- | - | ---- | - | ---------- | ------- |  | - | ---------- | - |  | -----------
|                                 |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  | from       
|                                 |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  | October 22,
|                                 |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  | 1992       
|                                 |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  | (inception)
|Statement of Operations Data:    |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            | through
|(in thousands, except share and  |  | Year Ended December 31, |            | December 31,
|per share amounts)               |  |                         | 2006       |              | 2005 |   | 2004       |   | 2003 |   | 2002       |   | 2006
|Revenue                          |  | $                       | 103        |              |      | $ | 12,026(1   | ) |      | $ | 2,195      |   |      | $ | 463        |         |  | $ | 57         |   |  | $          
|Operating expenses:              |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  |            
|Research and development         |  |                         | 15,219     |              |      |   | 13,775     |   |      |   | 19,344     |   |      |   | 21,805     |         |  |   | 24,809     |   |  |            
|General and administrative       |  |                         | 8,860      |              |      |   | 8,264      |   |      |   | 8,367      |   |      |   | 7,399      |         |  |   | 8,146      |   |  |            
|Impairment loss related to long- |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  |            
|lived assets                     |  |                         | 450        |              |      |   | 6,130      |   |      |   |           |   |      |   |           |         |  |   |           |   |  |            
|In-license fees                  |  |                         | 3,000      |              |      |   |           |   |      |   |           |   |      |   |           |         |  |   |           |   |  |            
|Total operating expenses         |  |                         | 27,529     |              |      |   | 28,169     |   |      |   | 27,711     |   |      |   | 29,204     |         |  |   | 32,955     |   |  |            
|Loss from operations             |  |                         | (27,426    | )            |      |   | (16,143    | ) |      |   | (25,516    | ) |      |   | (28,741    | )       |  |   | (32,898    | ) |  |            
|Interest expense                 |  |                         | (467       | )            |      |   | (323       | ) |      |   | (209       | ) |      |   | (250       | )       |  |   | (278       | ) |  |            
|Interest income                  |  |                         | 3,002      |              |      |   | 1,682      |   |      |   | 1,905      |   |      |   | 3,282      |         |  |   | 5,569      |   |  |            
|Sublease income                  |  |                         | 565        |              |      |   | 67         |   |      |   |           |   |      |   |           |         |  |   |           |   |  |            
|Other income (expense), net      |  |                         | 70         |              |      |   | 21         |   |      |   | (103       | ) |      |   | (65        | )       |  |   | (132       | ) |  |            
|                                
|Net loss                         |  | $                       | (24,256    | )            |      | $ | (14,696    | ) |      | $ | (23,923    | ) |      | $ | (25,774    | )       |  | $ | (27,739    | ) |  | $          
|Basic and diluted net loss per   |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  |            
|common share                     |  | $                       | (1.03      | )            |      | $ | (0.71      | ) |      | $ | (1.17      | ) |      | $ | (1.28      | )       |  | $ | (1.38      | ) |  |            
|Shares used in basic and diluted |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  |            
|net loss per common share        |  |                         |            |              |      |   |            |   |      |   |            |   |      |   |            |         |  |   |            |   |  |            
|calculation                      |  |                         | 23,509,378 |              |      |   | 20,624,229 |   |      |   | 20,362,155 |   |      |   | 20,149,214 |         |  |   | 20,080,998 |   |  |            

|Balance Sheet Data:                          |  | Year Ended December 31,
|-------------------------------------------- |  | -----------------------
|(in thousands)                               |  | 2006                   
|Cash, cash equivalents, available-for-sale   |  |                        
|securities, and restricted investments       |  | $                      
|Working capital                              |  |                        
|Total assets                                 |  |                        
|Long-term obligations                        |  |                        
|Deficit accumulated during development stage |  |                        
|Stockholders equity                         |  |                        

|(1) |  | See Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations  Overview for a description of our assignment of rights to Genzyme Corporation, resulting in the generation of $12.0 million of revenue.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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PART III

Item 14.Principal Accountant Fees and Services

The information required by this Item is set forth in the Proxy Statement under the heading Proposal 3 - Ratification of Selection of Independent Registered Public Accounting Firm. Such information is incorporated herein by reference.

PART IV

Item 15.Exhibits, Financial Statement Schedules

|(a) | The following documents are filed as part of this Annual Report on Form 10-K:
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|    |                                                                              
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|    |                                                                              

Financial statement schedules have been omitted from this Annual Report on Form 10-K because they are either not applicable or the required information is provided in the financial statements or the notes thereto.

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(3) Exhibits

|Exhibit Number |            | Exhibits
|-------------- | ---------- | --------
|2              | .1         |         
|3              | .1(1)      |         
|3              | .1.1(13)   |         
|3              | .2(1)      |         
|4              | .1(1)      |         
|10             | .3(2, 17)  |         
|10             | .4(1, 2)   |         
|10             | .5(1, 2)   |         
|10             | .6(2, 14)  |         
|10             | .7(2, 4)   |         
|10             | .8(1, 2)   |         
|10             | .10(2, 5)  |         
|10             | .11(2, 12) |         
|10             | .12(2, 7)  |         
|10             | .16(2, 24) |         
|10             | .17(2, 25) |         
|10             | .29(2, 6)  |         
|10             | .32(15)    |         
|10             | .33(15)    |         
|10             | .36(2, 8)  |         
|10             | .41(10)    |         
|10             | .45(13)    |         
|10             | .46(13)    |         
|10             | .47(13)    |         
|10             | .49(16)    |         
|10             | .50(16)    |         
|10             | .52(2, 22) |         
|10             | .53(20)    |         
|10             | .54(20)    |         
|10             | .55(2, 21) |         
|10             | .56(26)    |         
|10             | .57(27)    |         
|10             | .58(9, 11) |         
|10             | .59(9, 11) |         
|10             | .60(2, 9)  |         

---

|Exhibit Number |         | Exhibits
|-------------- | ------- | --------
|10             | .61(18) |         
|10             | .62(28) |         
|10             | .63     |         
|10             | .64     |         
|23             | .1      |         
|23             | .2      |         
|24             | .1      |         
|31             | .1      |         
|31             | .2      |         
|32             | .1(19)  |         

Keys to Exhibits:

|(1)  | Filed as an exhibit to the Registrants Registration Statement on Form S-1 (No. 333-03220) and incorporated herein by reference.                                                                                                   
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                    
|(2)  | Management Contract or Compensation Plan.                                                                                                                                                                                          
|    
|(4)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended June 30, 1999, as filed with the SEC (Commission File No. 000-28272).                      
|    
|(5)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Registration Statement on Form S-8 (Registration No. 333-42210) filed with the SEC on July 25, 2000.                                     
|    
|(6)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended June 30, 1997, as filed with the SEC (Commission File No. 000-28272).                      
|    
|(7)  | Incorporated by reference from such document filed with the SEC as Appendix A to Avigens Proxy Statement filed with the SEC on April 20, 2006 (Commission File No. 000-28272).                                                    
|    
|(8)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Current Report on Form 8-K filed with the SEC on May 31, 2005 (Commission File No. 000-28272).                                           
|    
|(9)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended December 31, 2005, as filed with the SEC on March 16, 2006 (Commission File No. 000-28272).
|    
|(10) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, as filed with the SEC (Commission File No. 000-28272).               
|    
|(11) | Portions of this exhibit have been omitted pursuant to a grant of confidential treatment.                                                                                                                                          
|    
|(12) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended June 30, 2000, as filed with the SEC on September 27, 2000 (Commission File No. 000-28272).

---

|(13) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended December 31, 2000, as filed with the SEC (Commission File No. 000- 28272).                                                                                                                                                                                                                      
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(14) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Registration Statement on Form S-8 (Registration No. 333-56274) filed with the SEC on June 22, 2004.                                                                                                                                                                                                                                                
|    
|(15) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended June 30, 2001, as filed with the SEC on September 27, 2001 (Commission File No. 000-28272).                                                                                                                                                                                                           
|    
|(16) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, as filed with the SEC (Commission File No. 000-28272).                                                                                                                                                                                                                           
|    
|(17) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Registration Statement on Form S-8 (Registration No. 333-90504) filed with the SEC on June 14, 2002.                                                                                                                                                                                                                                                
|    
|(18) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, as filed with the SEC (Commission File No. 000-28272).                                                                                                                                                                                                                           
|    
|(19) | This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Avigen under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.
|    
|(20) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, as filed with the SEC (Commission File No. 000-28272).                                                                                                                                                                                                                           
|    
|(21) | Incorporated by reference from the disclosure contained in Item 1.01 of Avigens Current Report on Form 8-K filed with the SEC on February 21, 2006 discussing such compensation (Commission File No. 000-28272).                                                                                                                                                                                                                             
|    
|(22) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, as filed with the SEC (Commission File No. 000-28272).                                                                                                                                                                                                                          
|    
|(24) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the SEC on March 15, 2004 (Commission File No. 000-28272).                                                                                                                                                                                                           
|    
|(25) | Incorporated by reference from the disclosure contained in Item 1.01 of Avigens Current Reports on Form 8-K filed with the SEC on May 31, 2005 and January 5, 2007 (Commission File No. 000-28272).                                                                                                                                                                                                                                          
|    
|(26) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Current Report on Form 8-K filed with the SEC on November 28, 2005 (Commission File No. 000-28272).                                                                                                                                                                                                                                                 
|    
|(27) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Current Report on Form 8-K filed with the SEC on December 16, 2005 (Commission File No. 000-28272).                                                                                                                                                                                                                                                 
|    
|(28) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Current Report on Form 8-K filed with the SEC on March 22, 2006 (Commission File No. 000-28272).                                                                                                                                                                                                                                                    

---

SIGNATURES

Pursuant to the requirements of Section 13 of 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| | AVIGEN, INC.
| | ------------
| |             
| |             
| | By:         
| |             
| |             

Dated: April 25, 2007

---

EXHIBIT INDEX TO 10-K

|Exhibit Number |            | Exhibits
|-------------- | ---------- | --------
|2              | .1         |         
|3              | .1(1)      |         
|3              | .1.1(13)   |         
|3              | .2(1)      |         
|4              | .1(1)      |         
|10             | .3(2, 17)  |         
|10             | .4(1, 2)   |         
|10             | .5(1, 2)   |         
|10             | .6(2, 14)  |         
|10             | .7(2, 4)   |         
|10             | .8(1, 2)   |         
|10             | .10(2, 5)  |         
|10             | .11(2, 12) |         
|10             | .12(2, 7)  |         
|10             | .16(2, 24) |         
|10             | .17(2, 25) |         
|10             | .29(2, 6)  |         
|10             | .32(15)    |         
|10             | .33(15)    |         
|10             | .36(2, 8)  |         
|10             | .41(10)    |         
|10             | .45(13)    |         
|10             | .46(13)    |         
|10             | .47(13)    |         
|10             | .49(16)    |         
|10             | .50(16)    |         
|10             | .52(2, 22) |         
|10             | .53(20)    |         
|10             | .54(20)    |         
|10             | .55(2, 21) |         
|10             | .56(26)    |         
|10             | .57(27)    |         
|10             | .58(9, 11) |         
|10             | .59(9, 11) |         
|10             | .60(2, 9)  |         

---

|Exhibit Number |         | Exhibits
|-------------- | ------- | --------
|10             | .61(18) |         
|10             | .62(28) |         
|10             | .63     |         
|10             | .64     |         
|23             | .1      |         
|23             | .2      |         
|24             | .1      |         
|31             | .1      |         
|31             | .2      |         
|32             | .1(19)  |         

Keys to Exhibits:

|(1)  | Filed as an exhibit to the Registrants Registration Statement on Form S-1 (No. 333-03220) and incorporated herein by reference.                                                                                                   
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                    
|(2)  | Management Contract or Compensation Plan.                                                                                                                                                                                          
|    
|(4)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended June 30, 1999, as filed with the SEC (Commission File No. 000-28272).                      
|    
|(5)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Registration Statement on Form S-8 (Registration No. 333-42210) filed with the SEC on July 25, 2000.                                     
|    
|(6)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended June 30, 1997, as filed with the SEC (Commission File No. 000-28272).                      
|    
|(7)  | Incorporated by reference from such document filed with the SEC as Appendix A to Avigens Proxy Statement filed with the SEC on April 20, 2006 (Commission File No. 000-28272).                                                    
|    
|(8)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Current Report on Form 8-K filed with the SEC on May 31, 2005 (Commission File No. 000-28272).                                           
|    
|(9)  | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended December 31, 2005, as filed with the SEC on March 16, 2006 (Commission File No. 000-28272).
|    
|(10) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, as filed with the SEC (Commission File No. 000-28272).               
|    
|(11) | Portions of this exhibit have been omitted pursuant to a grant of confidential treatment.                                                                                                                                          
|    
|(12) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended June 30, 2000, as filed with the SEC on September 27, 2000 (Commission File No. 000-28272).

---

|(13) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended December 31, 2000, as filed with the SEC (Commission File No. 000- 28272).                                                                                                                                                                                                                      
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(14) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Registration Statement on Form S-8 (Registration No. 333-56274) filed with the SEC on June 22, 2004.                                                                                                                                                                                                                                                
|    
|(15) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended June 30, 2001, as filed with the SEC on September 27, 2001 (Commission File No. 000-28272).                                                                                                                                                                                                           
|    
|(16) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, as filed with the SEC (Commission File No. 000-28272).                                                                                                                                                                                                                           
|    
|(17) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Registration Statement on Form S-8 (Registration No. 333-90504) filed with the SEC on June 14, 2002.                                                                                                                                                                                                                                                
|    
|(18) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, as filed with the SEC (Commission File No. 000-28272).                                                                                                                                                                                                                           
|    
|(19) | This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Avigen under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.
|    
|(20) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, as filed with the SEC (Commission File No. 000-28272).                                                                                                                                                                                                                           
|    
|(21) | Incorporated by reference from the disclosure contained in Item 1.01 of Avigens Current Report on Form 8-K filed with the SEC on February 21, 2006 discussing such compensation (Commission File No. 000-28272).                                                                                                                                                                                                                             
|    
|(22) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, as filed with the SEC (Commission File No. 000-28272).                                                                                                                                                                                                                          
|    
|(24) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the SEC on March 15, 2004 (Commission File No. 000-28272).                                                                                                                                                                                                           
|    
|(25) | Incorporated by reference from the disclosure contained in Item 1.01 of Avigens Current Reports on Form 8-K filed with the SEC on May 31, 2005 and January 5, 2007 (Commission File No. 000-28272).                                                                                                                                                                                                                                          
|    
|(26) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Current Report on Form 8-K filed with the SEC on November 28, 2005 (Commission File No. 000-28272).                                                                                                                                                                                                                                                 
|    
|(27) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Current Report on Form 8-K filed with the SEC on December 16, 2005 (Commission File No. 000-28272).                                                                                                                                                                                                                                                 
|    
|(28) | Incorporated by reference from such document filed with the SEC as an exhibit to Avigens Current Report on Form 8-K filed with the SEC on March 22, 2006 (Commission File No. 000-28272).                                                                                                                                                                                                                                                    

---

EXHIBIT INDEX TO 10-K/A

|Exhibit Number |    | Exhibits
|-------------- | -- | --------
|31             | .1 |         
|31             | .2 |         

---