View:
Filed pursuant to Rule 424(b)(3)
File No. 333-56755
PROSPECTUS
AVANT IMMUNOTHERAPEUTICS, INC.
(f/k/a T Cell Sciences, Inc.)
1,968,494 Shares of Common Stock
This Prospectus relates to 1,968,494 shares (the "Shares") of common
stock, par value $.001 per share (the "Common Stock"), of Avant
Immunotherapeutics, Inc. (the "Company," formerly "T Cell Sciences, Inc.") to be
sold by certain stockholders of the Company (the "Selling Stockholders") from
time to time. The Selling Stockholders may sell the Shares from time to time in
transactions on the Nasdaq National Market System, in negotiated transactions or
by a combination of these methods, at fixed prices that may be changed, at
market prices at the time of sale, at prices related to market prices or at
negotiated prices. The Selling Stockholders may effect these transactions by
selling the Shares to or through broker-dealers, who may receive compensation in
the form of discounts or commissions from the Selling Stockholders or from the
purchasers of the Shares for whom the broker-dealers may act as an agent or to
whom they may sell as a principal, or both. See "Selling Stockholders" and "Plan
of Distribution." The Common Stock of the Company is traded under the symbol
"AVAN" on the Nasdaq National Market. On June 9, 1998, the reported closing
price for the Common Stock on the Nasdaq National Market was $2.875.
The Company will not receive any of the proceeds from the sale of the
Shares. The Company has agreed to bear all of the expenses in connection with
the registration and sale of the Shares (other than underwriting discounts and
selling commissions).
See "Risk Factors" beginning on page 3 for a discussion of certain
special factors which should be considered by prospective investors in
purchasing the shares of Common Stock offered hereby.
--------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------------------------
The date of this Prospectus is September 8, 1998
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. 20549, a Registration Statement (which term
shall include all amendments, exhibits and schedules thereto) on Form S-3 under
the Securities Act of 1933 (the "Securities Act") with respect to the shares of
Common Stock offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission, to which Registration Statement
reference is hereby made. For further information with respect to the Company
and the securities covered hereby, reference is made to the Registration
Statement and to the exhibits thereto filed as a part thereof. The Registration
Statement and the exhibits thereto may be inspected and copied at prescribed
rates at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and copies may be obtained at the prescribed rates from
the Public Reference section of the Commission at its principal office in
Washington, D.C. The Commission also maintains a Web site at http://www.sec.gov
containing reports, proxy and information statements and other information
regarding registrants, including the Company, that file electronically with the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files proxy statements, reports and other information with
the Commission. Such proxy statements, reports and other information filed by
the Company may be inspected and copied at prescribed rates at the
aforementioned public reference facilities maintained by the Commission. The
Common Stock of the Company is traded on the Nasdaq National Market System.
Reports and other information concerning the Company may be inspected at the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated in, and made a part of, this Prospectus by reference as of their
respective dates: (1) the Company's Annual Report on Form 10-K and 10-K/A for
the fiscal year ended December 31, 1997; (2) the Company's Quarterly Report on
Form 10-Q and 10-Q/A for the quarter ended March 31, 1998; (3) the definitive
Proxy Statement of the Company for the Annual Meeting of Stockholders held May
12, 1998; (4) the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998; (5) the Company's Current Report on Form 8-K, filed on August 21,
1998; (6) the Company's Current Report on Form 8-K, filed on August 28, 1998;
and (7) the description of the Common Stock of the Company contained in the
Company's Registration Statement on Form 8-A, filed on September 22, 1986,
including all amendments and reports updating such description.
Each document filed subsequent to the date of this Prospectus pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and shall be a part hereof from the date of filing of such
document. The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon request, a copy of
any or all of the documents that have been incorporated by reference to the
Registration Statement of which this Prospectus is a part, other than exhibits
to such documents. Requests should be addressed to: Avant Immunotherapeutics,
Inc., 119 Fourth Avenue, Needham, Massachusetts 02194, Attention: Corporate
Secretary (telephone number (781) 433-0771).
2
This Prospectus, including the information incorporated herein by
reference, contains forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. The Company's actual
results could differ materially from those projected in the forward-looking
statements set forth in this Prospectus including the information incorporated
herein by reference. Investors should carefully consider the discussion of risk
factors below, in addition to the other information contained in this
Prospectus, in connection with an investment in the Shares offered hereby.
RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus, the following factors should be considered
carefully in evaluating an investment in the shares of Common Stock offered by
this Prospectus.
THE PURCHASE OF THE SHARES OF COMMON STOCK ENTAILS VERY SIGNIFICANT
RISKS INCLUDING THE FOLLOWING FACTORS WHICH SHOULD BE CONSIDERED CAREFULLY IN
EVALUATING AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED BY THIS
MEMORANDUM:
Early Stage of Product Development; Uncertainties Relating to Clinical
Trials and Product Development. All of the Company's therapeutic product
candidates are in various stages of research and development and no revenues
have been generated from the commercialization of these products. There can be
no assurance that any of the Company's therapeutic product candidates which are
under development will prove to be safe or effective in clinical trials, will be
approved by regulatory authorities, can be manufactured at acceptable cost with
appropriate quality, or can be successfully marketed. The Company's therapeutic
product candidates will require substantial additional development, including in
the areas of preclinical and clinical testing, regulatory approvals and
manufacturing processes prior to their commercialization. The Company has
performed only limited preclinical and clinical testing of certain of its
product candidates and technologies under development. Preclinical studies of
product candidates may not predict and do not ensure safety or efficacy in
humans and are not necessarily indicative of the results that may be achieved in
clinical trials with humans. There can be no assurance that unacceptable side
effects will not be discovered during preclinical and clinical testing of the
Company's potential products. Even after being cleared by the United States Food
and Drug Administration (the "FDA") or the regulatory authorities of other
countries, a product may later be shown to be unsafe or to not have its
purported effect, thereby preventing its widespread use or requiring its
withdrawal from the market. The rate of completion of the Company's clinical
trials depends on, among other factors, the rate of patient enrollment. Patient
enrollment is a function of many factors, including the size of the patient
population, the nature of the clinical protocol, the proximity of patients to
clinical sites and the eligibility criteria for the trial. Delays in planned
patient enrollment may result in increased costs, delays or termination of
clinical trials, which could have a material adverse effect on the Company's
business, financial condition and results of operations. In addition, the
Company may rely on third parties to assist it in overseeing and monitoring
clinical trials, which may result in delays in completing, or failure to
complete, clinical trials if such third parties fail to perform under their
agreements with the Company or fail to meet regulatory standards in the
performance of their obligations under such agreements.
History of Losses; Uncertainty of Future Profitability. The Company has
incurred operating losses since its inception and had accumulated net losses of
approximately $71.7 million as of March 30, 1998. The continued development of
the Company's products will require the commitment of substantial resources to
conduct research and preclinical and clinical programs, to establish
manufacturing capabilities and sales and marketing capabilities, and to
establish additional quality control, regulatory and administrative
capabilities. The Company may incur substantial operating losses over the next
several years as its product development programs and clinical testing expand.
The amount of net losses and the time required by the Company to reach sustained
profitability are highly uncertain and to achieve profitability the Company
must, among other things, successfully complete development of its products,
obtain regulatory approvals and establish manufacturing and
3
marketing capabilities. There can be no assurance that the Company will be able
to achieve profitability at all or on a sustained basis.
Need for Additional Funds. The Company has funded its operations and
capital expenditures to date primarily through equity financing, strategic
alliances with commercial partners, and sales of reagent and diagnostic
products. As of March 31, 1998, the Company has raised net proceeds of
approximately $80.3 million through equity financings. The Company anticipates
that it will need to raise substantial additional funds, through additional
equity or debt financings, research and development financings, collaborative
relationships or otherwise, prior to the commercialization of its products.
There can be no assurance that any such additional funding will be available to
the Company or, if available, that it will be on reasonable terms. Any such
additional funding may result in significant dilution to existing stockholders.
If adequate funds are not available, the Company may be required to
significantly curtail its research and development programs or obtain funds
through arrangements with collaborative partners that may require the Company to
relinquish certain material rights to its products.
Dependence on Third Parties for Clinical Supplies. The Company is
dependent on sourcing from a third party manufacturer for suitable quantities of
sCR1 and other materials necessary for clinical trials in addition to those
currently being conducted by the Company. The inability to have suitable quality
and quantities of material produced in a timely manner would result in
significant delays in the clinical development and sale of products, which could
adversely affect the Company's business, financial condition and results of
operations.
No Assurance of FDA Approval; Comprehensive Government Regulation. The
Company's research, development and clinical programs are subject to extensive
regulation by numerous governmental authorities in the United States and other
countries. Most of the Company's products will require governmental approvals
for commercialization which have not yet been obtained and are not expected to
be obtained for several years. Preclinical and clinical trials and manufacturing
and marketing of many of the Company's products will be subject to the rigorous
testing and approval processes of the FDA and corresponding foreign regulatory
authorities. The regulatory process, which includes preclinical, clinical and
post-clinical testing of many of the Company's products to establish their
safety and efficacy, can take many years and requires the expenditure of
substantial resources. Data obtained from preclinical and clinical activities
are susceptible to varying interpretations which could delay, limit or prevent
regulatory approval. In addition, delays or rejection may be encountered based
upon changes in, or additions to, regulatory policies for drug approval during
the period of product development and regulatory review, which may result in
limitations or restrictions on the Company's ability to utilize its technology
or develop its products. Delays in obtaining such approvals could adversely
affect the marketing of products developed by the Company and the Company's
ability to generate commercial product revenues. There can be no assurance that
requisite regulatory approvals will be obtained within a reasonable period of
time, if at all, or that the Company will not encounter problems in clinical
trials that will cause the Company or governmental authorities to delay or
suspend such trials. Moreover, if regulatory approval of a product is granted,
such approval may impose limitations on the indicated uses for which such
product may be marketed which may restrict the patient population for which any
product may be prescribed. Further, even if such regulatory approval is
obtained, a marketed product, its manufacturer and its manufacturing facilities
are subject to continuing review and periodic inspections, and later discovery
of previously unknown problems with a product, manufacturer or facility may
result in restrictions on such product or manufacturer, including withdrawal of
the product from the market. Failure to comply with the applicable regulatory
requirements can, among other things, result in fines, suspensions of regulatory
approvals, product recalls, operating restrictions and criminal prosecution.
To commercialize any product and prior to submitting the application for
marketing approval in the United States, the Company must sponsor and file an
Investigational New Drug application ("IND") for each proposed product and must
be responsible for initiating and overseeing the clinical studies to demonstrate
the safety and efficacy that are necessary to obtain FDA approval of such
product. There can be no assurance that the Company will be able to obtain the
necessary clearances for clinical trials or approvals for manufacturing
4
or marketing any of its product candidates. After completion of clinical trials
of a new product, FDA marketing approval must be obtained. At that time, the
Company must submit relevant data, including the results of product development
activities, preclinical studies and clinical trials, in addition to detailed
manufacturing information. Notwithstanding the submission of relevant data, the
FDA may withhold marketing approval and may require additional clinical trials.
Dependence on Manufacturing, Sales, Distribution and Marketing Partners.
To be successful, the Company's products must be manufactured in commercial
quantities, within regulatory requirements and at competitive costs. There can
be no assurance that the Company will be able to obtain access to suitable
product manufacturing facilities. Except for research reagents and certain
diagnostic products, the Company has limited experience in sales, marketing and
distribution of commercial products. To market any of its products directly, the
Company must develop a substantial marketing and sales force with technical
expertise and a supporting distribution capability. There can be no assurance
that the Company will be able to establish sales and distribution capabilities
without undue delays or expenditures or that it will be successful in gaining
market acceptance for its products. The Company may also enter into strategic
partnerships for the manufacturing, sales, distribution and marketing of its
products. There can be no assurance the Company will be able to enter into
successful strategic partnership agreements on terms acceptable to the Company,
if at all.
Competition and Risk of Technological Obsolescence. Biotechnology,
pharmaceuticals and therapeutics are rapidly evolving fields in which
developments are expected to continue at a rapid pace. Competitors of the
Company in the United States and abroad are numerous and include, among others,
pharmaceuticals, therapeutics and biotechnology companies as well as
universities and other research institutions. The Company's success depends upon
developing and maintaining a competitive position in the development of products
and technologies in its area of focus. Competition from other biotechnology,
pharmaceuticals and therapeutics companies is intense and expected to increase
as new products enter the market and new technologies become available. The
Company's competitors may also succeed in developing technologies and products
that are more effective than any which have been or are being developed by the
Company or that render the Company's technologies or products obsolete or
noncompetitive. The Company's competitors may also succeed in obtaining patent
protection or other intellectual property rights that would block the Company's
ability to develop its potential products, or in obtaining regulatory approval
for the commercialization of their products more rapidly or effectively than the
Company. Finally, many of these competitors have substantially greater research
and development capabilities, clinical, manufacturing, regulatory and marketing
experience and financial and managerial resources than the Company.
Dependence on Patents and Proprietary Technology. The Company's success
will depend in part on the ability of the Company and its licensors to obtain
and maintain patent protection for the Company's technology and to preserve its
trade secrets and operate without infringing on the proprietary rights of
others, both in the United States and in other countries. The failure of the
Company or its licensors to obtain and maintain patent protection for the
Company's technology could have a material adverse effect on the Company's
business, financial condition and results of operations. Patent positions in the
biotechnology field are highly uncertain and involve complex legal, scientific
and factual questions. To date, there has emerged no consistent policy regarding
the breadth of claims allowed in biotechnology patents, particularly in regard
to human therapeutic uses. There can be no assurance that patent applications
relating to the technology used by the Company will result in patents being
issued or that, if issued, the patent will not be subjected to further
proceedings limiting the scope of the rights under the patent or that such
patent will provide a competitive advantage or will afford protection against
competitors with similar technology, or will not be challenged successfully,
invalidated or circumvented by competitors. Moreover, because patent
applications in the United States are maintained in secrecy until patents issue
and patent applications in certain other countries generally are not published
until more than 18 months after they are filed, and since publication of
discoveries in scientific or patent literature often lags behind actual
discoveries, the Company cannot be certain that it or any licensor was the first
creator of inventions covered by pending patent applications or that it or such
licensor was the first to file patent applications for such inventions. In
addition, the Company could incur substantial costs in
5
defending itself in suits brought against it or in suits in which the Company
may assert its patents against others. If the outcome of any such litigation is
adverse to the Company, the Company's business, financial condition and results
of operations could be materially adversely affected. In addition to any
potential liability for significant damages, the Company may be required to
obtain licenses to patents or other proprietary rights of third parties. Costs
associated with any licensing arrangement may be substantial and could include
ongoing royalties. No assurance can be given that any licenses required under
any such patents or proprietary rights would be made available on terms
acceptable to the Company, if at all. If the Company does not obtain such
licenses, it could encounter delays in product market introductions while it
attempts to design around such patents or other rights, or be prevented from
manufacturing and marketing such products. In either case, the failure to obtain
such licenses on acceptable terms, if at all, could have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company also seeks to protect its proprietary technology, including
technology which may not be patented or patentable, in part by confidentiality
agreements and, if applicable, inventors' rights agreements with its
collaborators, advisors, employees and consultants. There can be no assurance
that these agreements will not be breached, that the Company will have adequate
remedies for any breach, or that the Company's trade secrets will not otherwise
be disclosed to, or discovered by, competitors. Moreover, the Company conducts a
significant amount of research through academic advisors and collaborators who
are prohibited from entering into confidentiality or inventors' rights
agreements by their academic institutions.
Dependence on Reimbursement. In both the United States and elsewhere,
sales, if any, of most of the Company's products will be dependent in part on
the availability of reimbursement from third party payors, such as government
and private insurance plans. Third party payors are increasingly challenging the
prices charged for medical products and services. Moreover, the federal
government of the United States has made the containment of health care costs a
top priority. If the Company succeeds in bringing one or more products to
market, there can be no assurance that these products will be considered
cost-effective, that reimbursement will be available or, if available, that the
level of reimbursement will be sufficient to allow the Company to sell its
products on a profitable basis.
Exposure to Product Liability Claims. The Company's business exposes it
to inherent risks of product liability claims, product recalls and associated
adverse publicity which are inherent in the testing, manufacturing, marketing
and sale of human therapeutic products. The Company currently has liability
insurance of limited coverage. There can be no assurance that it will be able to
maintain such insurance or obtain general product liability insurance on
acceptable terms or at reasonable costs or that such insurance will be in
sufficient amounts to provide the Company with adequate coverage against
potential liabilities. A product liability claim or product recall could inhibit
or prevent commercialization of products being developed by the Company. Any
product liability claim or product recall could have a material adverse effect
on the Company's business, financial condition and results of operations.
Health Care Reform. The health care industry in the United States and in
Europe is undergoing fundamental changes as the result of political, economic
and regulatory influences. Reforms proposed from time to time include mandated
basic health care benefits, controls on health care spending through limitations
on the growth of private health insurance premiums and Medicare and Medicaid
spending, the creation of large insurance purchasing groups and fundamental
changes to the health care delivery system. The Company anticipates that
alternative health care delivery systems and methods of payment will continue to
be reviewed and assessed, and public debate of these issues will likely
continue. The Company cannot predict whether any reform initiatives will result
or, if adopted, what impact they might have on the Company, and there can be no
assurance that the adoption of reform proposals will not have a material adverse
effect on the Company's business, financial condition and results of operations.
Announcements of reform proposals and the investment community's reaction to
such proposals, announcements by competitors and third-party payors of their
strategy in responding to reform initiatives, and general industry conditions
could produce volatility in the trading and market price of the Common Stock.
6
Hazardous Materials; Environmental Matters. The Company's research and
development activities involve the controlled use of hazardous materials,
chemicals, biological materials and radioactive compounds. The Company is
subject to federal, state and local laws and regulations governing the use,
manufacture, storage, handling and disposal of such materials and certain waste
products. Although the Company believes that its safety procedures for handling
and disposing of such materials comply with the standards prescribed by such
laws and regulations, the risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident, the
Company could be held liable for any resulting damages, and any such liability
could exceed the Company's resources. The Company may be required to incur
significant costs to comply with environmental laws and regulations in the
future. Current or future environmental laws or regulation may have a material
adverse effect on the Company's business, financial condition and results of
operations.
Dependence Upon Key Personnel. The Company is dependent on the members
of its management and scientific staff, the loss of one or more of whom could
have a material adverse effect on the Company. The Company also depends on its
scientific collaborators and advisors, all of whom have commitments that may
limit their availability to the Company. In addition, the Company believes that
its future success will depend in large part upon its ability to attract and
retain highly skilled scientific, managerial and marketing personnel,
particularly as the Company expands its activities in clinical trials, the
regulatory approval process and sales and manufacturing. The Company faces
significant competition for such personnel from other companies, research and
academic institutions, government entities and other organizations. There can be
no assurance that the Company will be successful in hiring or retaining the
personnel it requires for continued growth. The failure to hire and retain such
personnel could materially and adversely affect the Company's future business,
financial condition and results of operations.
Liquidity; Shares Eligible for Future Sale. The Shares offered for sale
hereby have not been registered under the Securities Act or any state securities
laws, and as a result, they may not be transferred or resold except as permitted
under the Act and applicable state securities laws pursuant to registration or
an exemption therefrom. The Company has agreed to file with the Securities and
Exchange Commission a registration statement for the resale from time to time of
the Shares by purchasers thereof.
Future sales of Common Stock in the public market by existing
stockholders could have an adverse effect on the price of the Common Stock. In
addition, the Company has registered the shares of Common Stock to be issued
under its 1985 Incentive Stock Option Plan and its Amended and Restated 1991
Stock Compensation Plan on a Registration Statement on Form S-8 and
approximately 2.0 million shares of Common Stock are presently eligible for sale
upon exercise of currently outstanding options.
Volatility of Stock Price. The market price of the shares of the Common
Stock, like that of the common stock of many other early-stage biotechnology
companies, may be highly volatile. Factors such as announcements of
technological innovations or new commercial products by the Company or its
competitors, disclosure of results of clinical testing or regulatory
proceedings, governmental regulation and approvals, developments in patent or
other proprietary rights, public concern as to the safety of products developed
by the Company and general market conditions may have a significant effect on
the market price of the Common Stock. In addition, the stock market has
experienced and continues to experience extreme price and volume fluctuations
which have effected the market price of many biotechnology companies and which
have often been unrelated to the operating performance of these companies. These
broad market fluctuations, as well as general economic and political conditions,
may adversely effect the market price of the Common Stock.
7
THE COMPANY
On August 21, 1998, T Cell Sciences, Inc., a Delaware corporation,
changed its name to Avant Immunotherapeutics, Inc. (the "Company"). The Company
also changed its ticker symbol from "TCEL" to "AVAN."
The Company is a biopharmaceutical company engaged in the discovery and
development of innovative drugs targeting diseases of the immune, inflammatory
and vascular systems. See "Recent Developments." The Company's technology
platforms are based on its understanding of the ways in which the body triggers
it natural defense mechanisms. The Company's lead therapeutic program is focused
on developing compounds that inhibit the inappropriate activation of the
complement cascade, a vital part of the body's immune defense system. The
Company has also established a program for the discovery and development of
small-molecule immunoregulatory therapeutic compounds, for the prevention of
immune rejection of transplanted organs and the treatment of autoimmune
disorders. The Company's third program targets the development of a therapeutic
vaccine for the prevention and treatment of atherosclerosis.
The Company's lead therapeutic program is focused on developing
compounds that inhibit a part of the immune system called the complement system.
The complement system is a series of proteins that are important initiators of
the body's acute inflammatory response against disease, infection and injury.
Excessive complement activation also plays a role in chronic inflammatory
conditions. When the complement is activated, it helps to identify and eliminate
damaged tissue. In certain situations, however, excessive complement activation
may destroy viable and healthy tissue which, though damaged, might recover. This
excessive response compounds the effects of the initial injury or introduces
unwanted tissue destruction in clinical situations such as organ transplants,
other surgeries and treatment for heart attacks. Many independent published
studies have reported that the Company's lead compound, TP10, a soluble form of
naturally occurring Complement Receptor 1 (sCR1), effectively inhibits the
activation of the complement cascade in animal models. The Company believes that
regulation of the complement system could have therapeutic and prophylactic
applications in several acute and chronic conditions, including adult
respiratory distress syndrome, reperfusion injury, organ transplant, multiple
sclerosis, Alzheimer's disease, rheumatoid arthritis and lupus. In the U.S.,
several million people are afflicted with these complement-medicated conditions.
In October 1997, the Company announced positive preliminary results with
respect to efficacy from a Phase I/II clinical trial of TP10 in patients
undergoing lung transplantation. A goal of the trial was to determine the
ability of TP10 to reduce reperfusion injury and improve lung function in
patients with end-stage pulmonary disease who were undergoing lung transplant
surgery. The results showed that at 24 hours after surgery, significantly fewer
of the patients receiving TP10 required ventilation as compared to those
receiving placebo. The patients receiving TP10 tended to have shorter time
intubated and on ventilator, and shorter stays in the ICU. Additionally, those
patients who received TP10 and also underwent cardiopulmonary by-pass as part of
the transplantation procedure showed significantly decreased intubation time and
time on ventilation.
In October 1997, the Company announced it had entered into a
collaborative agreement with Novartis Pharma AG, Basel, Switzerland ("Novartis")
relating to the development of TP10 for use in xenotransplantation (animal
organs into humans) and allotransplantation (human to human organ
transplantation). Under the agreement, the Company may receive annual option
fees and supplies of TP10 for clinical trials, the combination of which is
valued at up to approximately $5 million, in return for granting Novartis a
two-year option to license TP10 with exclusive worldwide (except Japan)
marketing rights. Should Novartis exercise its option to license TP10 and
continue development, the Company may receive an equity investment, licensing
fees and milestone payments based upon attainment of certain development and
regulatory goals, which has an approximate aggregate value of up to $25 million.
The Company may also receive funding for research as well as royalty payments on
eventual product sales.
8
In April 1998, the Company announced positive results with respect to
efficacy from a Phase I/II clinical trial of TP10 in patients undergoing lung
transplantation. A goal of the trial was to determine the ability of TP10 to
reduce reperfusion injury and improve lung function in patients with end-stage
pulmonary disease who were undergoing lung transplant surgery. The results
showed that one day after surgery, significantly fewer of the patients receiving
TP10 required ventilation as compared to those receiving placebo. The patients
receiving TP10 tended to have shorter time intubated and on ventilator, and
shorter stays in the ICU. Additionally, those patients who received TP10 and
also underwent cardiopulmonary by-pass as part of the transplantation procedure
showed significantly decreased intubation time and time on ventilation.
As a direct result of over thirteen (13) years of experience working
with T cells and building on the Company's evaluation capabilities in molecular
and cellular immunology and small-animal immunology models, the Company has
developed a proprietary screening platform that it uses to identify
small-molecule compounds which can regulate T cell activation. These whole cell
screens are based on signal transduction and gene regulation directed to
cytokine gene targets. T cell activation plays an important role in solid organ
transplant rejection as well as in certain autoimmune diseases. The Company is
seeking to develop an alternative treatment to existing immunosuppressants such
as Cyclosporin and FK506, which due to their toxicity, have limited application
in chronic conditions. Despite this limitation, worldwide sales of Cyclosporin
in 1995 exceeded $1 billion. The Company's basic approach is to combine the
biological skills and proprietary screens it has developed with the
small-molecule libraries created by other biotechnology companies.
The Company is developing a therapeutic vaccine against endogenous
cholesteryl ester transfer protein ("CETP"), which may be useful in reducing
risk factors for atherosclerosis. CETP is a key intermediary in the balance of
high-density lipoprotein ("HDL" or "good" cholesterol) and low-density
lipoprotein ("LDL" or "bad" cholesterol). The Company is developing a vaccine to
stimulate an immune response against CETP which it believes may improve the
ratio of HDL to LDL and reduce the potential of atherosclerosis. The Company has
conducted studies using animal models that demonstrate the Company's ability to
break immune tolerance, produce autoreactive antibodies to CETP, elevate HDL
levels and reduce blood vessel lesions.
RECENT DEVELOPMENTS
On August 21, 1998, TC Merger Corp. ("TCMC"), a Delaware Corporation and
a wholly-owned subsidiary of Avant Immunotherapeutics, Inc., merged with and
into Virus Research Institute, Inc. ("VRI"), a Delaware corporation, pursuant to
an Agreement and Plan of Merger dated as of May 12, 1998 (the "Agreement") by
and among the Company, TCMC and VRI. VRI survived the merger as a wholly-owned
subsidiary of the Company.
In consideration, on August 21, 1998, the Company issued pursuant to the
Agreement: (i) 14,036,454 shares of Common Stock valued at approximately
$28,072,908 million based upon the closing price of the Common Stock on August
21, 1998 and (ii) 1,811,155 warrants (the "Warrants") to acquire 1,811,155
shares of the Company's Common Stock. The Warrants expire on August 21, 2003 and
have an exercise price of $6.00 per share. Pursuant to the Agreement, the
Registrant also assumed 83,584 warrants (the "VRI Warrants") and 990,441 options
(the "VRI Options") to acquire shares of VRI's $.001 par value common stock. The
VRI Warrants are exercisable for 129,555 shares of the Company's Common Stock
and 16,717 Warrants. The VRI Options are exercisable for 1,535,184 shares of the
Company's Common Stock and 24,267 Warrants. The merger is being accounted for as
a purchase transaction.
On August 21, 1998, the Company changed its name from T Cell Sciences,
Inc. to Avant Immunotherapeutics, Inc. The Company's ticker symbol also changed
from "TCEL" to "AVAN."
9
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders.
REGISTRATION RIGHTS
The registration of the Shares pursuant to the Registration Statement of
which this Prospectus is a part will discharge a portion of the Company's
obligations under the terms of a Stock Purchase Agreement dated March 20, 1998.
Pursuant to the Stock Purchase Agreement, the Company has agreed to pay
all expenses of registering the Shares (other than brokerage and underwriting
commissions, taxes of any kind and any legal, accounting and other expenses
incurred by a holder thereunder). The Company also has agreed under the Stock
Purchase Agreement to indemnify each Selling Stockholder and its officers,
directors and other affiliated persons and any person who controls any Selling
Stockholder against losses, claims, damages and expenses arising under the
securities laws in connection with the Registration Statement or this
Prospectus, subject to certain limitations. In addition, each Selling
Stockholder under the Stock Purchase Agreement severally agreed to indemnify the
Company and its respective directors, officers and any person who controls the
Company against all losses, claims, damages and expenses arising under the
securities laws insofar as such loss, claim, damage or expense relates to
information furnished to the Company by such Selling Stockholder for use in the
Registration Statement or Prospectus or an amendment or supplement thereto or
the failure by such Selling Stockholder (through no fault of the Company) to
deliver or cause to be delivered this Prospectus or any amendment or supplement
thereto to any purchaser of Shares covered by the Registration Statement from
such Selling Stockholder.
SELLING STOCKHOLDERS
The Shares are to be offered by and for the respective accounts of the
Selling Stockholders. The following table sets forth the name and number of
shares of Common Stock owned by each Selling Stockholder as of March 20, 1998.
The Shares offered by this Prospectus may be offered from time to time by the
Selling Stockholders. Because the Selling Stockholders may sell all, some or
none of the Shares, the Company has assumed that the Selling Stockholders will
sell all of the Shares in determining the number and percentage of shares of
Common Stock that each Selling Stockholder will own upon completion of the
offering to which this Prospectus relates. The amounts set forth below are based
upon information provided by the Selling Stockholders and are accurate to the
best knowledge of the Company.
Shares of Shares of
Common Stock Shares of Common Stock Owned
Beneficially Owned Common Stock After the Offering (2)
Selling Stockholder as of March 31, 1998 Offered Hereby Number(1) Percent (2)
- ------------------- -------------------- -------------- --------- -----------
SMALLCAP World Fund, Inc..................... 1,500,000 200,000 1,300,000 4.6%
Lombard Odier & Cie.......................... 1,053,631 1,052,631 1,000 *
Lindfield Management Inc. ................... 353,469 353,469 0 *
Pierre Alan Mathier.......................... 317,036 317,036 0 *
Sequest Foundation........................... 35,191 35,191 0 *
Anisfield Investments, Ltd................... 10,167 10,167 0 *
Total........................................ 3,269,494 1,968,494 1,301,000 4.6%
- -----------------
* Less than 1%.
(1) Assumes that all Shares hereby offered by the Selling Stockholders are sold.
(2) Based on 28,531,285 outstanding shares of Common Stock of the Company as of
March 31, 1998.
10
PLAN OF DISTRIBUTION
Shares of Common Stock covered hereby may be offered and sold from time
to time by the Selling Stockholders. The Selling Stockholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made in transactions on the
Nasdaq National Market or otherwise at prices related to the then current market
price or in negotiated transactions. The Selling Stockholders may also make
private sales either directly or through a broker or brokers. The Shares may be
sold by one or more of the following methods: (a) purchases by the broker-dealer
as principal and resale by such broker or dealer for its account pursuant to
this Prospectus; (b) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (c) block trades in which the broker-dealer
so engaged will attempt to sell the Shares as agent, but may position and resell
a portion of the block as principal to facilitate the transaction. In effecting
sales, broker-dealers engaged by the Selling Stockholders may arrange for other
broker-dealers to participate. Broker-dealers will receive commissions or
discounts from the Selling Stockholders in amounts to be negotiated immediately
prior to the sale.
In offering the shares of Common Stock covered hereby, the Selling
Stockholders and any broker-dealers who execute sales for the Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales, and any profits realized by the
Selling Stockholders and the compensation of such broker-dealer may be deemed to
be underwriting discounts and commissions under the Securities Act.
The Company has agreed to indemnify each Selling Stockholder against any
liabilities, under the Securities Act or otherwise, arising out of or based upon
any untrue or alleged untrue statement of a material fact in the Registration
Statement or this Prospectus or by any omission of a material fact required to
be stated therein except to the extent that such liabilities arise out of or are
based upon any untrue or alleged untrue statement or omission in any information
furnished in writing to the Company by the Selling Stockholder expressly for use
in the Registration Statement.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby will be passed
upon for the Company by its counsel, Goodwin, Procter & Hoar LLP, Boston,
Massachusetts.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1997, have been so incorporated in reliance upon the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
11
================================================================================
- --------------------------------------------------------------------------------
No dealer, sales representative or any other person has been authorized
to give any information or to make any representations in connection with this
offering other than those contained in this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company or any other person. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the shares of Common Stock to which it relates or an offer to, or a
solicitation of, any person in any jurisdiction where such an offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company or that information
contained herein is correct as of any time subsequent to the date hereof.
---------------------------
TABLE OF CONTENTS
---------------------------
Page
Available Information............................ 2
Incorporation of Certain Documents by Reference.. 2
Risk Factors..................................... 3
The Company...................................... 8
Recent Developments.............................. 9
Use of Proceeds.................................. 10
Registration Rights.............................. 10
Selling Stockholders............................. 10
Plan of Distribution............................. 11
Legal Matters.................................... 11
Experts.......................................... 11
---------------------------
================================================================================
- --------------------------------------------------------------------------------
================================================================================
- --------------------------------------------------------------------------------
1,968,494 Shares
AVANT
IMMUNOTHERAPEUTICS,
INC.
COMMON STOCK
---------------------------
PROSPECTUS
----------------------------
September 8, 1998
- --------------------------------------------------------------------------------
================================================================================