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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 23, 2003
AVANT IMMUNOTHERAPEUTICS, INC.
(Exact name of registrant as specified in charter)
Delaware 0-15006 13-3191702
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
119 Fourth Avenue
Needham, Massachusetts 02494
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(781) 433-0771
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
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99.1 The Company's Press Release dated July 23, 2003.
ITEM 9. REGULATION FD DISCLOSURE..
The following information is furnished under Item 12
of Form 8-K "Results of Operations and Financial
Condition". This information is being furnished and
shall not be deemed "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934 or
otherwise subject to the liabilities of that Section.
The information in this Current Report on Form 8-K
shall not be incorporated by reference into any
registration statement or other document pursuant to
the Securities Act of 1933 as amended.
On July 23, 2003, the Company issued a press release
which is attached to this Form 8-K as Exhibit 99.1
and incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AVANT IMMUNOTHERAPEUTICS, INC.
Date: July 23, 2003 By: /s/ Avery W. Catlin
------------------------------------
Avery W. Catlin
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
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Exhibit
Number Description
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99.1 The Company's Press Release dated July 23, 2003
Exhibit 99.1
AVANT Immunotherapeutics Reports
Second Quarter 2003 Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--July 23, 2003--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported financial
results for the second quarter ended June 30, 2003. The company
reported a net loss of $3.2 million, or $.05 per share, for the second
quarter of 2003 compared to a net loss of $5.2 million, or $.09 per
share, for the second quarter of 2002. The decreased loss for the
second quarter of 2003 results primarily from an increase in revenue
and a decrease in operating expense compared to the same period in
2002, offset in part by a decrease in investment income.
The increase in revenue of $435,600, or 67.8%, primarily reflects
revenue of $818,600 recognized from government contracts in the second
quarter of 2003, offset partly by decreased revenue from product
development and licensing agreements and from product sales. The
decrease in operating expense of $1.7 million, or 28.4%, primarily
results from lower research and development expenses in the second
quarter of 2003 of $1.4 million due to decreased clinical trial and
contract manufacturing costs and a reduction of $335,800 in selling,
general and administrative expense. During the second quarter of 2003,
AVANT managed fewer clinical trials as a result of discontinuing its
TP10 trials during the first quarter of 2002 and completing the
CholeraGarde(TM) Phase II dose-ranging study in 2002. The reduction in
manufacturing costs associated with the bacterial vaccines programs
was due to limited contract manufacturing activity during the second
quarter of 2003. The decrease in operating expense further resulted
from declines in personnel and related expenses and manufacturing
consultancy costs, offset partly by increases in license fees,
facility-related costs, insurance and legal expenses. The decrease in
investment income reflects lower average cash balances between periods
and lower interest rates. The company ended the quarter with cash and
cash equivalents of $17 million. On July 1, 2003, AVANT completed a
private placement of common stock with gross proceeds of $10 million,
which brings its current cash position to approximately $26.4 million.
For the six months ended June 30, 2003, the company reported a net
loss of $6.5 million, or $.11 per share, compared to a net loss of
$10.1 million, or $.17 per share, for the six months ended June 30,
2002. The six-month results for 2003 reflect a decrease in net loss of
$3.6 million, or 35.1%, compared to the same period in 2002. This
decrease in net loss primarily reflects an increase in revenue and a
decrease in operating expense, offset in part by a decrease in
investment income. The increase in revenue primarily reflects new
revenues in 2003 of $1.3 million from government contracts for
biodefense vaccine development with the U.S. Department of Defense
(DoD) through our partner, DynPort Vaccine Company LLC (DVC). The
decrease in operating expense is primarily due to decreased clinical
trial and contract manufacturing costs incurred in connection with the
company's clinical programs. It also reflects declines in personnel
and related expenses, lab supplies and manufacturing consultancy
costs, offset partly by increases in license fees, consultancy costs,
legal and facility related expenses. The decrease in investment income
reflects lower average cash balances between periods and significantly
lower interest rates.
"We were pleased to have recently completed a private placement of
$10 million," said Avery W. Catlin, Senior Vice President and Chief
Financial Officer of AVANT Immunotherapeutics, Inc. "With the recent
improvement in biotech financing, we raised additional funds to insure
that AVANT's cash balances exceed our expected requirements for the
next two years. This financing provides the resources to support the
development of our bacterial vaccines and provides for our general
working capital needs."
Review of Additional Events During the Quarter
Bioterrorism and Emerging Health Care Threats Vaccines
In June 2003, AVANT received two additional subcontracts marking
further milestones in the company's efforts with its partner, DVC, to
develop anthrax and plague vaccines for the DoD. The first award, in
the amount of $344,000, covers stability testing of DVC's injectable
anthrax vaccine, which began Phase I clinical testing in October 2002.
The second award for approximately $1.3 million, supports pre-clinical
animal testing of vaccine constructs being developed by AVANT for an
oral combination vaccine against anthrax and plague. AVANT has
previously been awarded a $2.5 million contract from DVC. Under the
agreements, AVANT may receive in excess of $8 million over a two-year
period, covering vaccine development through pre-clinical testing.
During the quarter, discussions continued with the U.S. government
regarding development of additional vaccines to protect against
bioterrorism agents and against new disease threats such as SARS.
"We are very pleased to receive these new awards, which further
validate AVANT's prominent role in efforts to apply modern
biotechnology to the development of vaccines for biodefense and other
emerging health care threats," said Una S. Ryan, Ph.D., President and
Chief Executive Officer of AVANT Immunotherapeutics, Inc. "The $1.3
million contract, in particular, represents a milestone towards
achieving our goal of $8 million in funding over two years for the
oral combination anthrax-plague vaccine program. AVANT is now more
than half way to achieving this goal. DVC's choice of AVANT to conduct
this development program is an important recognition of the strength
of our company's vaccine and vector technologies."
Bacterial Vaccines
In December 2002, the International Vaccine Institute (IVI)
started a Phase II trial of AVANT's CholeraGarde(TM) vaccine in
Bangladesh where cholera is endemic. IVI is assessing the safety and
immunogenicity of the vaccine in adults before moving into
progressively younger pediatric populations, eventually studying the
vaccine in infants as young as nine months. To date, IVI has completed
testing in adults and is now vaccinating toddlers, ages 2 to 5 years.
AVANT expects IVI to provide data from the adult and toddler portions
of this study during the second half of 2003.
During the second quarter of 2003, AVANT terminated its
manufacturing contract with Bio Sidus, S.A., of Buenos Aires,
Argentina, for the manufacture of its CholeraGarde(TM) vaccine.
Simultaneously, AVANT has commenced arbitration proceedings in New
York to reconcile contractual issues between the two companies.
Clinical material for the IVI trials in Bangladesh was previously
manufactured by the Walter Reed Army Institute of Research (WRAIR),
and AVANT and WRAIR have entered into a manufacturing agreement to
supply CholeraGarde(TM).
Cholesterol Management Vaccine
AVANT's cholesterol management agent, CETi-1, is designed to raise
serum HDL (high-density lipoprotein) cholesterol levels by blocking
the ability of cholesteryl ester transfer protein (CETP) to transfer
cholesterol from HDL to LDL (low-density lipoprotein). The principle
of the CETi-1 approach is to harness an individual's own immune system
by periodic vaccinations to control this activity of CETP, thereby
causing HDL cholesterol levels to rise. Elevated HDL or "good
cholesterol" acts to protect against atherosclerosis, while elevated
LDL or "bad cholesterol" acts to promote atherosclerosis. This product
is nearing completion of a Phase II clinical trial for which the
dosing phase of the trial is finished, with results expected in the
fourth quarter of 2003.
Russell 2000
AVANT was added to the Russell 2000(R) Index of publicly traded
companies as of June 30, 2003, when the Frank Russell Company
reconstituted its family of U.S. indexes. Inclusion in the Russell
2000(R) index is for a one-year period.
"We are pleased to have been added to the Russell 2000(R), which
we consider a clear recognition of AVANT's progress over the course of
the last year, advancing our products through clinical trials and
executing our business strategy in an effort to deliver value for our
shareholders," stated Dr. Ryan.
Dr. Ryan and Mr. Catlin will host a conference call at 11:00 AM
EDT on Wednesday, July 23, 2003 to discuss the Second Quarter 2003
financial results. To access the conference call, dial 800-599-9816
(within the United States), or 617-847-8705 (if calling from outside
the U.S.). The passcode for participants is 92773794. An audio replay
will be available approximately one hour after the call for
approximately one week and can be accessed by dialing 888-286-8010
(within the U.S.), or 617-801-6888 (if calling from outside the U.S.).
The passcode I.D.# is 14731231.
A live webcast of the conference call, together with this press
release, can be accessed through the company's website
www.avantimmune.com in the Investor Information section. In order to
access the webcast, your PC must have a sound card, speakers and
Windows Media Player software. It is recommended that you configure
your PC in advance of the webcast as the software download and
installation can take several minutes. In addition, the call and
webcast will be archived and can be accessed through the same link.
Additionally, a copy of this press release is available by contacting
Investor Relations at (781) 433-0771 or by written request to:
Investor Relations
AVANT Immunotherapeutics, Inc.
119 Fourth Avenue
Needham, MA 02194-2725
AVANT Immunotherapeutics, Inc. is engaged in the discovery,
development and commercialization of products that harness the human
immune system to prevent and treat disease. The company is developing
a broad portfolio of vaccines addressing a wide range of applications
including bacterial and viral diseases, chronic human disease,
biodefense and food safety. These include single-dose, oral vaccines
that protect against important disease-causing agents and a novel,
proprietary vaccine candidate for cholesterol management. AVANT's goal
is to demonstrate proof-of-concept for its products before leveraging
their value through partnerships. Current collaborations encompass the
development of an oral human rotavirus vaccine, vaccines to combat
threats of biological warfare, and vaccines addressed to human food
safety and animal health.
Additional information on AVANT Immunotherapeutics, Inc. can be
obtained through our site on the World Wide Web:
http://www.avantimmune.com.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995: This release includes forward-looking statements
which reflect AVANT's current views with respect to future events and
financial performance. These forward-looking statements are based on
management's beliefs and assumptions and information currently
available. The words "believe," "expect," "anticipate," "intend,"
"estimate," "project" and similar expressions which do not relate
solely to historical matters identify forward-looking statements.
Investors should be cautious in relying on forward-looking statements
because they are subject to a variety of risks, uncertainties, and
other factors that could cause actual results to differ materially
from those expressed in any such forward-looking statements. These
factors include, but are not limited to: (1) the integration of
multiple technologies and programs; (2) the ability to adapt AVANT's
vectoring systems to develop new, safe and effective orally
administered vaccines against anthrax and plague or other bioterrorism
threats or emerging health care threats; (3) the ability to
successfully complete development and commercialization of CETi-1,
CholeraGarde(TM) (Peru-15), Ty800 and other products; (4) the cost,
timing, scope and results of ongoing safety and efficacy trials of
CETi-1, CholeraGarde(TM) (Peru-15), Ty800 and other preclinical and
clinical testing; (5) the ability to successfully complete product
research and further development, including animal, pre-clinical and
clinical studies of CETi-1, CholeraGarde(TM) (Peru-15), Ty800 and
other products; (6) the ability of the Company to manage multiple late
stage clinical trials for a variety of product candidates; (7) the
volume and profitability of product sales of Megan(R)Vac 1 and other
future products; (8) changes in existing and potential relationships
with corporate collaborators; (9) the availability, cost, delivery and
quality of clinical and commercial grade materials supplied by
contract manufacturers; (10) the timing, cost and uncertainty of
obtaining regulatory approvals to use CETi-1, CholeraGarde(TM)
(Peru-15) and Ty800, among other purposes, to raise serum HDL
cholesterol levels and to protect travelers and people in endemic
regions from diarrhea causing diseases, respectively; (11) the ability
to obtain substantial additional funding; (12) the ability to develop
and commercialize products before competitors; (13) the ability to
retain certain members of management; and (14) other factors detailed
from time to time in filings with the Securities and Exchange
Commission. We expressly disclaim any responsibility to update
forward-looking statements.
AVANT IMMUNOTHERAPEUTICS, INC.
CONSOLIDATED STATEMENTS Quarter Year to Date
OF OPERATIONS DATA Ended June 30, Ended June 30,
- ----------------------------------------------------------------------
2003 2002 2003 2002
(Unaudited) (Unaudited)
REVENUE
Product Development
and Licensing
Agreements $217,700 $522,400 $387,100 $1,107,700
Government
Contract Revenue 818,600 - $1,295,600 -
Product Royalties $42,100 - $77,400 -
Product Sales - 120,400 - 225,900
- ----------------------------------------------------------------------
Total Revenue 1,078,400 642,800 1,760,100 1,333,600
- ----------------------------------------------------------------------
OPERATING EXPENSE
Research and
Development 2,673,400 4,066,400 5,365,900 8,476,000
Selling, General
and
Administrative 1,351,700 1,687,500 2,576,400 2,873,400
Cost of
Product Sales - 17,000 - 30,700
Amortization
of Acquired
Intangible Assets 248,800 198,800 497,600 397,600
- ----------------------------------------------------------------------
Total Operating
Expense 4,273,900 5,969,700 8,439,900 11,777,700
- ----------------------------------------------------------------------
Operating Loss (3,195,500) (5,326,900) (6,679,800) (10,444,100)
Investment
Income, Net 12,200 162,600 134,300 366,200
- ----------------------------------------------------------------------
Net Loss $(3,183,300) $(5,164,300) $(6,545,500) $(10,077,900)
- ----------------------------------------------------------------------
Basic and Diluted
Net Loss per
Common Share $(0.05) $(0.09) $(0.11) $(0.17)
- ----------------------------------------------------------------------
Weighted Average
Common Shares
Outstanding 60,468,700 60,458,400 60,468,700 60,457,900
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CONDENSED CONSOLIDATED
BALANCE SHEETS June 30, December 31,
- ----------------------------------------------------------------------
2003 2002
(Unaudited)
ASSETS
Cash and Cash Equivalents $16,984,100 $25,070,700
Other Current Assets 1,050,900 789,300
Property and Equipment, net 1,068,700 1,119,500
Intangible and Other Assets, net 9,678,200 8,253,700
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Total Assets $28,781,900 $35,233,200
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $3,863,500 $3,432,600
Noncurrent Liabilities 207,400 456,200
Stockholders' Equity 24,711,000 31,344,400
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Total Liabilities and
Stockholders' Equity $28,781,900 $35,233,200
============ =============
CONTACT: AVANT Immunotherapeutics, Inc.
Una S. Ryan, Ph.D., 781-433-0771
or
Avery W. Catlin, 781-433-0771
info@avantimmune.com
or
For Media:
Kureczka/Martin Associates
Joan Kureczka, 415-821-2413
jkureczka@aol.com