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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):
February 24, 2004
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 February 24, 2004.
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 February 24, 2004, 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: February 24, 2004 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 February 24, 2004
Exhibit 99.1
AVANT Reports Fourth Quarter and Fiscal 2003 Financial Results;
Provides 2004 Financial Guidance
NEEDHAM, Mass.--(BUSINESS WIRE)--Feb. 24, 2004--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported financial
results for the fourth quarter and year ended December 31, 2003. The
Company reported a net loss of $2.9 million, or $0.05 per share, for
the fourth quarter of 2003 compared to a net loss of $3.5 million, or
$0.06 per share, for the fourth quarter of 2002. The decreased loss
for the fourth quarter of 2003 primarily reflects an increase in
revenue combined with a decrease in operating expense compared to the
same period in 2002, offset by a reduction in interest income.
The increase in revenue of $46,900 results primarily from
government contract and product royalty revenues in 2003, offset by a
reduction in licensing revenue as a result of a milestone payment of
$500,000 received from Pfizer in late 2002. The decrease in operating
expense of $564,900, or 12.8%, primarily results from a reduction in
research and development expenses in the fourth quarter of 2003
related to a decrease in manufacturing costs for the bacterial
vaccines programs during the fourth quarter of 2003 and a decrease in
consulting expenses. The decrease in research and development expenses
was offset in part by an increase in clinical trials costs,
facility-related expenses, personnel and related expenses and legal
costs. At December 31, 2003, the Company reported cash and cash
equivalents of $20.3 million.
For the year ended December 31, 2003, the Company reported a net
loss of $12.7 million, or $0.20 per share, compared to a net loss of
$13.8 million, or $0.23 per share, for fiscal 2002. AVANT changed its
accounting for patent costs in 2003 and now expenses patent costs as
incurred. As a result of this change, the company recorded a non-cash
charge for the cumulative effect of the change in accounting principle
of $1.2 million, or $.02 per share for the year ended December 31,
2003. The full year results for 2003 reflect a decrease in revenue and
the cumulative effect of a change in accounting principle, offset by a
decrease in operating expense compared to the same period in 2002. The
decrease in revenue of $2.1 million, or 30.9%, primarily results from
the one-time recognition of approximately $4.0 million in revenue upon
the termination of the Novartis TP10 agreement in the third quarter of
2002 and the milestone payment received from Pfizer in late 2002. This
was offset in part by new government contract revenue of $2.7 million
for biodefense vaccine development recorded in 2003 and the
recognition of a $1 million milestone payment from GlaxoSmithKline in
the third quarter of 2003 upon initiation of Phase III clinical trials
of the Rotarix(R) rotavirus vaccine. The decrease in operating expense
of $4.8 million, or 22.6%, is primarily due to decreased clinical
trials costs 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 legal, patent and
facility-related expenses. The decrease in investment income of
$362,900 reflects lower average cash balances between periods and
significantly lower interest rates.
"During 2003, we achieved the following notable clinical and
financial milestones," said Una S. Ryan, Ph.D., President and Chief
Executive Officer of AVANT Immunotherapeutics, Inc.:
-- We are establishing a pilot manufacturing facility in Fall
River, Massachusetts with funding assistance from
MassDevelopment. This facility will implement our VitriLife(R)
technology.
-- The first of our products entered Phase III clinical studies
as our partner, GlaxoSmithKline (GSK), began trials of
Rotarix(R) in Latin America and South East Asia.
-- CETi-1, our novel vaccine for cholesterol management,
demonstrated proof-of-concept in humans when Phase II data
showed that a vaccine approach could indeed raise HDL.
-- Data from a Phase II trial showed that treatment with TP10,
our novel inhibitor of complement-mediated inflammation, could
reduce deaths and heart attacks in men undergoing open-heart
surgery.
-- Additionally, we made significant progress in applying our
novel vaccine platform to the development of oral vaccines for
biodefense. We have received contracts for over $4 million of
our $8 million contract goal to support preclinical
development of a single-dose, oral vaccine combining
protection from anthrax and plague.
Already in 2004, we have accomplished several additional, notable
milestones:
-- We announced in January 2004 positive preliminary results of
the adult portion from the Phase II clinical trial in
Bangladesh of AVANT's cholera vaccine, CholeraGarde(TM).
-- Earlier this month we announced a financing of approximately
$25 million which provides cash balances that now exceed our
currently anticipated requirements for the next two years.
-- Finally, last week we announced a Phase II trial of TP10 in
approximately 300 female patients undergoing cardiac surgery
utilizing cardiopulmonary by-pass.
Dr. Ryan continued, "AVANT has a variety of programs in clinical
development, the majority of which are supported by major companies,
governmental agencies or international health organizations. We were
very pleased to see the first of these programs enter Phase III
testing this year -- our two-dose oral rotavirus vaccine, Rotarix(R).
GSK has enrolled the majority of 60,000 infants planned in trials to
be completed in 2004. GSK plans their initial Rotarix(R) launch in
Mexico in 2004."
Dr. Ryan added, "We are also moving forward with development of
our Fall River facility, which will implement the VitriLife(R)
technology acquired last year and represents a major step forward in
our efforts to build a commercial company. Having this manufacturing
capability will allow us to produce our "next generation" vaccines for
clinical trials, specifically the biodefense vaccines under
development with the U.S. Department of Defense, DynPort Vaccine
Company and the National Institutes of Health. It will also enable us
to compete for further government vaccine contracts. Finally, it
provides AVANT with partnering opportunities to apply our VitriLife(R)
technology to other companies' products."
Clinical Development Programs
AVANT's focus is unlocking the power of the immune system to
prevent and treat disease. We have assembled a broad portfolio of
technologies and intellectual property that give us a strong
competitive position in vaccines and immunotherapeutics. Six of
AVANT's products are in clinical development. AVANT expects to make
substantial progress in 2004 in advancing several of these products to
the later stages of clinical development.
In the second half of 2004, AVANT expects its partner,
GlaxoSmithKline, to complete Phase III global clinical studies of its
investigational rotavirus vaccine, Rotarix(R), a two-dose oral
rotavirus vaccine which has been shown to be helpful in preventing
rotavirus gastroenteritis disease in young children.
During the fourth quarter of 2004, AVANT expects to announce
results from a blinded, placebo-controlled Phase IIb study of TP10,
its complement inhibitor, in approximately 300 females undergoing
cardiac by-pass surgery. The aim of the trial is to augment the safety
data for TP10 and further define its effect in women before advancing
to a Phase III study aimed at product registration. The primary
endpoint is reduction in the incidence of deaths and heart attacks
during and following surgery. Data from an earlier Phase II trial
showed that TP10 effectively limited harmful complement-mediated
inflammation in men undergoing heart surgery involving cardiopulmonary
by-pass, leading to significantly fewer post-surgical deaths and heart
attacks compared to placebo-treated men. However, the researchers did
not see the same benefit in the smaller number of women included in
the trial.
Results in late 2003 from a CETi-1 Phase II study showed that the
vaccine was well tolerated and demonstrated proof-of-concept in humans
that a vaccine approach could indeed raise HDL. We are evaluating a
number of possibilities for the continued development of this vaccine,
including the use of new adjuvants to elicit a more robust antibody
response. We expect to have CETi-1 back into the clinic within
approximately twelve months.
Development of a safe, effective oral cholera vaccine is the first
step in establishing AVANT's single-dose, oral bacterial vaccine
franchise. During 2004, AVANT expects its partner, the International
Vaccine Institute (IVI), to complete pediatric Phase II trials in
Bangladesh where cholera is endemic. In addition, the National
Institute of Allergy and Infectious Disease (NIAID) of the National
Institutes of Health (NIH) and AVANT have entered into a cooperative
agreement for the NIAID to conduct a Phase I in-patient dose ranging
clinical trial aimed at demonstrating the safety and immunogenicity of
the Ty800 typhoid fever vaccine. The trial is planned for an NIAID
funded clinical site using NIAID funded clinical material. The NIAID
trial seeks to confirm the safety and immunogenicity of the Ty800 oral
vaccine observed in an earlier physician sponsored Ty800 vaccine
study. Finally, we are developing three additional bacterial vaccines
against enterotoxigenic E. coli, Shigella and Campylobacter -- all
important causes of serious diarrheal diseases worldwide.
The attenuated live bacteria used to create AVANT's single-dose
oral vaccines can also serve as vectors for developing vaccines
against other bacterial and viral diseases. By engineering key disease
antigens into the DNA of the vector organisms, AVANT expects to extend
the protective ability of its single-dose oral vaccines to a wide
variety of illnesses. We believe our vector technologies may prove
useful for improving and expanding America's vaccine arsenal against
microbial agents used in war or terrorist attacks.
AVANT has partnered with the U.S. Department of Defense, DynPort
Vaccines Company (DVC) and the National Institutes of Health to apply
AVANT's vaccine technology to important biodefense needs. Under a
series of subcontracts from DVC, the prime contractor for the
department of Defense's Joint Vaccine Acquisition Program (JVAP),
AVANT is developing an oral vaccine that combines protection against
anthrax and plague. AVANT's plans include an oral plague vaccine
scheduled for proof-of-concept testing in humans during 2004 funded by
DVC. AVANT has also received research funding from the National
Institutes of Health (NIH) that supports the development of
single-dose oral vaccines against anthrax. Furthermore, AVANT
technology is employed in an improved injectable anthrax vaccine
currently in Phase I clinical testing by DVC.
Financial Guidance for 2004
Revenues
For 2004, AVANT expects revenue to be between $5-$6 million,
compared with 2003 revenue of $4.6 million, primarily derived from
government contracts and grants.
Research and Development
Research and development spending is expected to be between
$14-$16 million in 2004, compared with 2003 R&D expense of $10
million. The change in R&D spending from 2003 to 2004 primarily
reflects three factors:
(i) Spending on clinical trials will be increased, with the
primary focus in 2004 on our Phase IIb trial of TP10 in
females undergoing cardiac by-pass surgery and an oral plague
vaccine scheduled for proof-of-concept testing in humans
during 2004. Clinical trial costs for our bacterial vaccines
program -- Phase II studies for CholeraGarde(TM) in Bangladesh
and a Phase I in-patient study for Ty800, will be incurred by
our partners, the IVI and the NIH;
(ii) Spending to complete the TP10 process development program
by Lonza plc, our contract manufacturing partner for this
compound, prior to the manufacture of cGMP commercial
material; and
(iii) Costs associated with the construction and validation of
our Fall River pilot manufacturing facility expected to be
completed in late Q4-2004.
Other Operating Expenses
AVANT expects general and administrative expenses, including
amortization of acquired intangible assets, this year to be in the
range of $6.0-$6.5 million, compared with 2003 expenses of $6.3
million.
Net Loss
Net loss is expected to be in the range of $14-$17 million this
year.
Dr. Ryan and Mr. Catlin will host a conference call at 11:00 AM
EST on Tuesday, February 24, 2004 to discuss the 2003 financial
results and guidance for 2004. To access the conference call, dial
800-901-5213 (within the United States), or 617-786-2962 (if calling
from outside the U.S.). The participant passcode is 10283488. An audio
replay will be available immediately following 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 for the audio replay is 95040780.
The call will also be broadcast via the Company's website:
www.avantimmune.com. 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.
AVANT Immunotherapeutics, Inc. discovers, develops and sells
innovative vaccines and therapeutics that harness the human immune
system to prevent and treat disease. The company has developed a
broad, well-staged pipeline of vaccines and therapeutics for large,
high-value, under-served markets. Six of AVANT's products are in
clinical development. These include an oral human rotavirus vaccine, a
treatment to reduce complement-mediated tissue damage associated with
cardiac by-pass surgery, and a novel vaccine for cholesterol
management. AVANT has also assembled a technology platform that
enables the creation of rapid-protecting, single-dose, oral vaccines
that remain stable without refrigeration. The company is developing
applications of this vaccine technology in four areas: biodefense,
travelers' vaccines, global health needs, and human food safety.
AVANT's goal is to demonstrate proof-of-concept for its products
before leveraging further development through both traditional
pharmaceutical partnerships and collaborations with governmental and
other organizations.
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 DATA Quarter Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
OPERATING REVENUE
Product Development
and Licensing
Agreements $183,900 $810,800 $1,803,900 $6,412,400
Government Contract
Revenue 631,900 - 2,661,200 -
Product Royalties 41,900 - 167,800 -
Product Sales - - - 292,400
Total Operating
Revenue 857,700 810,800 4,632,900 6,704,800
OPERATING EXPENSE
Research and
Development 2,145,300 2,809,300 10,021,300 14,708,500
Selling, General and
Administrative 1,442,200 1,393,100 5,350,500 5,592,100
Cost of Product
Sales - - - 41,000
Amortization of
Acquired Intangible
Assets 248,700 198,700 995,100 795,100
Total Operating
Expense 3,836,200 4,401,100 16,366,900 21,136,700
Operating Loss (2,978,500) (3,590,300) (11,734,000) (14,431,900)
Interest Income, Net 53,700 115,200 239,800 602,700
Net loss before
cumulative effect of
change in accounting
principle (2,924,800) (3,475,100) (11,494,200) (13,829,200)
Cumulative effect of
change in accounting
principle - - (1,175,300) -
Net Loss $(2,924,800) $(3,475,100) $(12,669,500) $(13,829,200)
Basic and Diluted Net
Loss per Common Share:
Net loss before
cumulative effect of
change in accounting
principle (0.05) (0.06) (0.18) (0.23)
Cumulative effect of
change in accounting
principle - - (0.02) -
Net Loss $(0.05) $(0.06) $(0.20) $(0.23)
Weighted Average
Common Shares
Outstanding 64,707,200 60,464,900 62,512,900 60,461,600
December 31, December 31,
2003 2002
Cash and Cash Equivalents $20,251,000 $25,070,700
Other Current Assets 2,058,000 789,300
Property and Equipment, net 912,700 1,119,500
Intangible and Other Assets, net 8,083,400 8,253,700
Total Assets $31,305,100 $35,233,200
Current Liabilities $3,052,100 $3,432,600
Noncurrent Liabilities 333,300 456,200
Stockholders' Equity 27,919,700 31,344,400
Total Liabilities and Stockholders'
Equity $31,305,100 $35,233,200
CONTACT: AVANT Immunotherapeutics, Inc.
Una S. Ryan, 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