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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):
October 22, 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.
99.1 The Company's Press Release dated October 22, 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 October 22, 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: October 22, 2003 By: /s/ Avery W. Catlin
-----------------------------------------------
Avery W. Catlin
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
- ----- -----------
99.1 The Company's Press Release dated October 22, 2003
Exhibit 99.1
AVANT Immunotherapeutics Reports Third Quarter 2003 Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--Oct. 22, 2003--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported financial
results for the third quarter ended September 30, 2003. The company
reported a net loss of $2.1 million, or $.03 per share, for the third
quarter of 2003 compared to a net loss of $276,200, or $.01 per share,
for the third quarter of 2002. The increased loss for the third
quarter of 2003 results primarily from a significant decrease in
revenue and a decrease in investment income, offset in part by a
decrease in operating expense compared to the same period in 2002.
The decrease in revenue of $2,545,300, or 55.8%, primarily
reflects a decrease of $3,261,000 in revenue from product development
and licensing agreements, offset partly by revenue of $733,700 from
government contracts in the third quarter of 2003. The decrease in
product development and licensing revenue consisted primarily of a
decrease of $2,153,900 for the amortization of a nonrefundable license
fee and the recognition of a $1.9 million net termination fee from
Novartis due to the termination of the TP10 agreement with Novartis in
the third quarter of 2002. The decrease was offset in part by the
recognition of a $1 million milestone payment from GlaxoSmithKline in
the third quarter of 2003 upon initiation of Phase III trials of the
Rotarix(R) rotavirus vaccine.
The decrease in total operating expense of $775,300, or 15.6%, is
primarily due to a reduction in costs associated with conducting
clinical trials of $574,600, a decrease in contract manufacturing
activities and consulting costs associated with the bacterial vaccines
programs totaling $147,500, and a decrease in personnel and related
expenses of $219,600. These decreases were offset in part by increased
selling, general and administrative expense of $98,100. The decrease
in investment income reflects lower average cash balances between
periods and lower interest rates. On July 1, 2003, AVANT completed a
private placement of common stock with gross proceeds of $10 million.
The company ended the quarter with cash and cash equivalents of $23.5
million.
For the nine months ended September 30, 2003, the company reported
a net loss of $8.7 million, or $.14 per share, compared to a net loss
of $10.4 million, or $.17 per share, for the nine months ended
September 30, 2002. The nine-month results for 2003 reflect a decrease
in net loss of $1.7 million compared to the same period in 2002. This
decrease in net loss primarily reflects a decrease in operating
expense, offset in part by decreases in revenue and investment income.
The decrease in revenue primarily reflects revenue of $4,361,700
recognized as a result of the termination of the TP10 agreement with
Novartis in 2002, offset partly by the recognition of a $1 million
milestone payment from GlaxoSmithKline in the third quarter of 2003
and new revenues in 2003 of $2.0 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 of $4,113,100 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, sponsored research and
consultancy costs, offset partly by increases in license fees, legal,
patent and facility related expenses. The decrease in investment
income reflects lower average cash balances between periods and
significantly lower interest rates.
Review of Additional Events During the Quarter
Recommitment to Complement Inhibitor TP10
In September, AVANT announced that the company has reinstated
development plans for its novel complement inhibitor, TP10. AVANT
plans to conduct a Phase II double-blind, placebo-controlled trial of
that product in approximately 200 women undergoing cardiac surgery on
cardiopulmonary by-pass. The trial is currently being planned to begin
around year-end 2003.
"Full, detailed analysis of the data from our Phase II adult
cardiac surgery study completed in February 2002 resulted in the
finding of significant treatment benefits in the male participants.
The benefits seen in the male population were directly related to
mortality and the benefit seen was very impressive. This made it clear
to AVANT's board of directors that TP10 remains an exciting product
opportunity deserving further investigation by AVANT," said Una S.
Ryan, AVANT president and chief executive officer. "While we continue
to be open to partnering TP10, we are now convinced of this molecule's
continued promise, and AVANT is very pleased to recommit to its
development internally."
Bioterrorism and Emerging Health Care Threats Vaccines
During the third quarter, AVANT continued to make technical
progress under its subcontracts with DVC towards development of
anthrax and plague vaccines for the DoD. Several vaccine candidates
have been developed and are being tested in animal models for
immunogenicity. In September, AVANT announced that the Defense
Appropriations Bill for Fiscal Year 2004 passed by Congress commits
$3.0 million for the Defense Department's continued development of an
oral combination vaccine to protect against anthrax and plague. The
dedicated funding provides financial support to carry the vaccine's
preclinical development phase to near completion, including
manufacturing process development and pilot vaccine production at
AVANT's recently announced Fall River pilot manufacturing plant.
"This biodefense vaccine is one of the most technologically
advanced of any under development by the federal government," said Una
S. Ryan, Ph.D., President and Chief Executive Officer of AVANT
Immunotherapeutics, Inc. "The successful development of this vaccine
will make all Americans, both military personnel and civilians, safer
from the threats posed by anthrax and plague." Dr. Ryan noted that
AVANT has to date received over $4 million in subcontracts from DVC
and an appropriation of $3 million, covering vaccine development
through preclinical testing. She also noted that 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.
Fall River Pilot Manufacturing Facility
In August, AVANT announced that it had reached agreement with
MassDevelopment for AVANT to occupy and buildout a pilot manufacturing
facility in MassDevelopment's technology center located in Fall River,
Massachusetts. MassDevelopment, the economic development entity for
the Commonwealth of Massachusetts, and AVANT worked closely to develop
a financing framework that allows AVANT to establish its own
manufacturing capability while remaining in the Commonwealth and
creating new jobs. This facility will provide the capability to
develop and manufacture AVANT's own bacterial vaccine products, as
well as to apply its proprietary VitriLife(R) technology to products
for our partners. Currently work is proceeding in the design and
engineering of the facility and construction is anticipated to begin
by year's end.
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 two to five
years. AVANT expects IVI to provide data from the adult portion of
this study during the fourth quarter of 2003.
Webcast and Conference Call
Dr. Ryan and Mr. Catlin will host a conference call at 11:00 AM
EDT on Wednesday, October 22, 2003 to discuss the Third Quarter 2003
financial results. To access the conference call, dial 800-299-8538
(within the United States), or 617-786-2902 (if calling from outside
the U.S.). The passcode for participants is 56371843. An audio replay
will be available approximately two hours 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 56525484.
A live webcast of the conference call, together with this press
release, can be accessed through the company's web site
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.
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 TP10,
CETi-1, CholeraGarde(TM) (Peru-15), Ty800 and other products; (4) the
cost, timing, scope and results of ongoing safety and efficacy trials
of TP10, 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 TP10, 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 TP10,
CETi-1, CholeraGarde(TM) (Peru-15) and Ty800, among other purposes,
for adults undergoing cardiac surgery, 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
OF OPERATIONS Quarter Year to Date
DATA Ended September 30, Ended September 30,
- ----------------------------------------------------------------------
2003 2002 2003 2002
(Unaudited) (Unaudited)
REVENUE
Product Development
and Licensing
Agreements $1,232,900 $4,493,900 $1,620,000 $5,601,600
Government
Contract Revenue 733,700 - 2,029,300 -
Product Royalties 48,500 - 125,900 -
Product Sales - 66,500 - 292,400
- ----------------------------------------------------------------------
Total Revenue 2,015,100 4,560,400 3,775,200 5,894,000
- ----------------------------------------------------------------------
OPERATING EXPENSE
Research and
Development 2,510,100 3,423,200 7,876,000 11,899,200
Selling, General
and
Administrative 1,423,700 1,325,600 4,000,100 4,199,000
Cost of Product
Sales - 10,300 - 41,000
Amortization of
Acquired
Intangible Assets 248,800 198,800 746,400 596,400
- ----------------------------------------------------------------------
Total Operating
Expense 4,182,600 4,957,900 12,622,500 16,735,600
- ----------------------------------------------------------------------
Operating Loss (2,167,500) (397,500) (8,847,300) (10,841,600)
Investment
Income, Net 51,800 121,300 186,100 487,500
- ----------------------------------------------------------------------
Net Loss $(2,115,700) $(276,200) $(8,661,200) $(10,354,100)
- ----------------------------------------------------------------------
Basic and Diluted
Net Loss per
Common Share $(0.03) $(0.01) $(0.14) $(0.17)
- ----------------------------------------------------------------------
Weighted Average
Common Shares
Outstanding 64,703,000 60,457,800 61,773,500 60,458,500
- ----------------------------------------------------------------------
CONDENSED CONSOLIDATED
BALANCE SHEETS September 30,December 31,
- ----------------------------------------------------------------------
2003 2002
(Unaudited)
ASSETS
Cash and Cash Equivalents $23,498,400 $25,070,700
Other Current Assets 1,283,400 789,300
Property and Equipment, net 972,900 1,119,500
Intangible and Other Assets, net 9,417,100 8,253,700
------------ -------------
Total Assets $35,171,800 $35,233,200
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $3,165,500 $3,432,600
Noncurrent Liabilities 82,900 456,200
Stockholders' Equity 31,923,400 31,344,400
------------ -------------
Total Liabilities and Stockholders' Equity $35,171,800 $35,233,200
============ =============
CONTACT: AVANT Immunotherapeutics, Inc.
Una S. Ryan, 781-433-0771
Avery W. Catlin, 781-433-0771
info@avantimmune.com
or
For Media:
Kureczka/Martin Associates
Joan Kureczka, 415-821-2413
jkureczka@aol.com