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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 2, 2005
Commission file number 0-15006
AVANT Immunotherapeutics, Inc.
(Exact name of registrant as specified in its charter)
____________________
Delaware 13-3191702
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
119 Fourth Avenue
Needham, Massachusetts 02494
(Address of principal executive offices, including zip code)
(781) 433-0771
(Registrant's telephone number, including area code)
(Former name, if changed since last report)
____________________
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
On March 2, 2005, AVANT Immunotherapeutics, Inc. issued a press release
announcing its financial results for the fourth quarter and full year of 2004.
The full text of the press release is furnished as Exhibit 99.1 hereto is
incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
- ------- ----------------------------------
99.1 Press Release of AVANT Immunotherapeutics, Inc. dated March 2, 2005.
[Remainder of page left blank intentionally]
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be filed on its behalf by
the undersigned hereunto duly authorized.
AVANT Immunotherapeutics, Inc.
Dated: March 2, 2005 By: /s/ Avery W. Catlin
------------- -------------------------------------
Avery W. Catlin
Senior Vice President and
Chief Financial Officer
Exhibit Index
99.1 Press Release of AVANT Immunotherapeutics, Inc. dated March 2, 2005.
Exhibit 99.1
AVANT Reports Fourth Quarter and Fiscal 2004 Financial Results - Provides 2005
Financial Guidance -
NEEDHAM, Mass.--(BUSINESS WIRE)--March 2, 2005--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported financial
results for the fourth quarter and year ended December 31, 2004. The
Company reported a net loss of $3.7 million, or $0.05 per share, for
the fourth quarter of 2004 compared to a net loss of $2.9 million, or
$0.05 per share, for the fourth quarter of 2003. For the twelve months
ended December 31, 2004, the net loss was $13.2 million, or $.18 per
share, compared with $12.7 million, or $.20 per share, for the twelve
months of 2003. The increase in net loss between periods primarily
reflects increased research and development expenses due to an
increase in clinical trial costs associated with AVANT's ongoing TP10
Phase IIb study in women undergoing cardiac bypass surgery and TP10
contract manufacturing costs incurred for process development and
scale-up work. The increase in operating expense was partially offset
by an increase in product development and license agreements revenue.
At December 31, 2004, the Company reported cash and cash equivalents
of $31.7 million.
Revenues for the fourth quarter of 2004 were $2,407,300 compared
with revenues of $857,700 for the fourth quarter of 2003. The increase
reflects the recognition of a milestone fee of $2 million from
GlaxoSmithKline (GSK) for the European filing of an application for
market approval of the Rotarix(R) rotavirus vaccine. This milestone
revenue was offset by a reduction in government contract revenue
during the quarter in 2004 compared to 2003. For the year ended
December 31, 2004, revenues were $6.9 million compared with revenues
of $4.6 million for 2003. The increase in revenues results primarily
from the recognition of $1 million in revenue from DynPort Vaccine
Company LLC ("DVC") for rPA clinical materials, an upfront license fee
of $1 million from AdProTech, Ltd. and the previously mentioned $2
million milestone fee from GSK, offset by a reduction in government
contract revenue. Operating expense increased $4,074,000 in 2004
compared to 2003 primarily as a result of clinical trials costs and
contract manufacturing costs incurred on the company's TP10 complement
inhibitor program. In the fourth quarter of 2004, AVANT recorded
$300,000 in cost of revenue associated with the milestone fee from
GSK. Investment income increased in 2004, reflecting higher average
cash balances and interest rates between periods. In 2003, AVANT
changed its accounting for patent costs 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 loss per share for the year ended
December 31, 2003.
"For AVANT, 2004 was a year of significant milestones, capped by
the first commercial approval of a human healthcare product from our
extensive portfolio of next-generation vaccines," said Una S. Ryan,
Ph.D., President and Chief Executive Officer of AVANT
Immunotherapeutics, Inc. "That product, our Rotarix(R) rotavirus
vaccine, was approved in Mexico in July and has now been launched by
our partner GSK. This and other significant events that occurred
during the year have brought AVANT closer to becoming a commercial
company and to realizing the value of our technologies and products."
Other key events of 2004 included:
-- The initiation of a Phase IIb study of TP10, our novel
inhibitor of complement-mediated inflammation, in
approximately 300 women undergoing open-heart surgery.
-- The completion of a financing of approximately $25 million,
which at the time provided cash balances to cover our
anticipated requirements for approximately two years.
-- The opening of our state-of-the-art vaccine manufacturing
facility in Fall River, Massachusetts with funding from
MassDevelopment.
-- Completion of enrollment of toddlers and infants in a Phase II
clinical trial in Bangladesh of AVANT's cholera vaccine,
CholeraGarde(R) by our partner, the International Vaccine
Institute. AVANT announced positive preliminary results of the
adult portion of this clinical trial in early 2004.
-- Receipt of $2.8 million in the 2005 Defense Appropriations
Bill to support preclinical development of our oral
combination anthrax/plague vaccine program.
Already in 2005, we achieved two notable milestones:
-- We announced that GSK had filed in late 2004 for market
approval of Rotarix(R) with the European regulatory
authorities, triggering a $2 million milestone payment to
AVANT.
-- Also in January, GSK announced the launch of Rotarix(R) in
Mexico, representing the first step in a series of global
product launches to begin this year.
Dr. Ryan continued, "We were very pleased that our partner GSK
gained approval for Rotarix(R) in Mexico during 2004, which represents
just the first in an expected series of worldwide approvals for that
product. GSK plans to launch in additional Latin American countries as
well as Asia Pacific countries during the course of 2005. Addressing a
worldwide market opportunity estimated by GSK at $1.8 billion, they
have already filed for market approval in more than 20 countries
worldwide as well as with the European regulatory authorities. Royalty
revenues to AVANT from Rotarix(R) sales should begin in the first half
of 2005, with estimates totaling about $1 to $2 million for the year
and increasing over the next several years as more countries approve
this much needed product."
Dr. Ryan continued, "The opening of our new vaccine manufacturing
facility in Fall River, Massachusetts also represents a key event for
AVANT. This facility will produce AVANT's oral combination vaccine
against biodefense, as well as our travelers' vaccines for clinical
trials and eventual commercial sale. Importantly, this facility will
also implement our VitriLife(R) preservation technology, the means to
producing vaccines and therapeutic proteins that are room temperature
stable without the need for refrigeration. This manufacturing
capability, while important for AVANT's own products, may also provide
revenue-generating opportunities to apply this technology to the
products of others."
Clinical Development Programs
AVANT has a variety of programs in clinical development, many of
which are supported by major companies, governmental agencies or
international health organizations. Major programs, in addition to the
Rotarix(R) vaccine discussed above, include TP-10, the company's
complement inhibitor; CETi, a vaccine approach to cholesterol
management; oral vaccines against cholera, typhoid fever and other
important diarrheal diseases; and oral vaccines for biodefense. AVANT
has assembled a broad portfolio of technologies and intellectual
property that give it a strong competitive position in vaccines and
immunotherapeutics.
TP-10: In the third quarter of 2005, AVANT expects to announce
results from a blinded, placebo-controlled Phase IIb study of TP10,
its complement inhibitor, in up to 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. In addition, AVANT is continuing process development
and scale-up efforts with a contract manufacturer in preparation for
the production of Phase III clinical materials. AVANT is seeking to
partner the TP10 program prior to starting a Phase III trial.
CETi: Phase II clinical results showed that our CETi vaccine can
raise heart-protective HDL cholesterol levels by eliciting antibodies
that block the transfer of cholesterol from HDL to LDL. Low levels of
HDL are a key risk factor for atherosclerosis, a leading cause of
deaths due to heart attacks and strokes. In preclinical testing, we
have identified a new adjuvanted formulation for the vaccine that
elicits more than a 10-fold increase in anti-CETP antibody titers when
compared to the current CETi-1 vaccine. We have contracted for the
production of GMP peptide for the newly formulated vaccine and we
expect to complete toxicology, release and stability studies in 2005
consistent with the goal of having CETi back into the clinic within
approximately twelve months.
Next-Generation Oral Vaccines: AVANT is developing "next
generation" vaccines for a variety of needs including biodefense,
global health, travelers' and food safety. Each of these vaccines is
designed to provide rapid protection with a single, oral dose.
Additionally, we expect the use of AVANT's proprietary VitriLife(R)
preservation technology to give these vaccines room temperature
stability, enabling them to be shipped and stored without
refrigeration. This feature makes AVANT's vaccines uniquely suited to
address both large commercial markets and serious world health needs.
VitriLife(R) technology also reduces the time and cost of vaccine
manufacture, further adding to the competitiveness of AVANT's
vaccines.
In mid-2005, AVANT expects its partner, the International Vaccine
Institute (IVI), to announce results of the pediatric portion of the
Phase II trial of AVANT's oral cholera vaccine. This trial has been
ongoing in Bangladesh where cholera is endemic. Previously announced
results in the adult portion of the trial showed the vaccine to be
well tolerated and highly immunogenic against the cholera organism.
AVANT is now seeking third party funding to pay for Phase III clinical
field studies of this product. In addition, the National Institutes of
Health (NIH) has funded the manufacture of AVANT's typhoid fever
vaccine, Ty800, for clinical testing and expects to initiate a Phase
I/II clinical trial in the first half of 2005 aimed at demonstrating
the safety and immunogenicity of the Ty800 vaccine. AVANT is also
developing three additional bacterial vaccines against enterotoxigenic
E. coli, Shigella and Campylobacter -- all important causes of serious
diarrheal disease worldwide.
AVANT's bacterial vaccines platform offers opportunities for
development of a variety of vaccines against infectious agents that
might be employed as weapons of bioterrorism. During 2004, the company
received a second appropriation in the U.S. Defense budget for the
development of an oral vaccine combining protection against plague and
anthrax. This brings the funding for this biodefense program to $10
million to date. AVANT plans to manufacture material for the plague
portion of this vaccine in its new Fall River facility in preparation
for the start of human safety studies after completion of validation
work.
Financial Guidance for 2005
Revenues
For 2005, AVANT expects revenue to be between $6-$7 million,
compared with 2004 revenue of $6.9 million, primarily derived from
government contracts and grants and from product royalties.
Research and Development
Research and development spending is expected to be between
$18-$20 million in 2005, compared with 2004 R&D expense of $13.6
million. The change in R&D spending from 2004 to 2005 primarily
reflects three factors:
(i) Spending on clinical trials will be increased, with the
primary focus in 2005 on the completion of 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 2005.
Clinical trial costs for our bacterial vaccines program -- Phase II
studies for CholeraGarde(R) 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, in
preparation for the manufacture of cGMP Phase III clinical materials;
and
(iii) Costs associated with the validation and operation of our
Fall River manufacturing facility for a full calendar year.
Other Operating Expenses
AVANT expects general and administrative expenses, including
amortization of acquired intangible assets, this year to be in the
range of $7-$8 million, compared with 2004 expenses of $6.6 million.
Partnering Activities
In 2005, AVANT will actively pursue partnering opportunities for
its TP10 and CETi programs, however, the timing and size of any
partnering arrangement is difficult to predict.
Dr. Ryan and Mr. Catlin will host a conference call at 11:00 AM
EST on Wednesday, March 2, 2005 to discuss the 2004 financial results
and guidance for 2005. To access the conference call, dial
800-510-9691 (within the United States), or 617-614-3453 (if calling
from outside the U.S.). The participant passcode is 85862571. 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 46354902.
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. Three of AVANT's products are
marketed, including two food safety vaccines and an oral human
rotavirus vaccine, which gained its first marketing approval in Mexico
in July 2004. Six of AVANT's products are in clinical development,
including a treatment to reduce complement-mediated tissue damage
associated with cardiac bypass 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. Further, AVANT has established a state-of-the-art vaccine
manufacturing facility for the implementation of its VitriLife(R)
technology and the production of its own vaccines and other companies'
products. AVANT's goal is to demonstrate proof-of-concept for its
products in the clinic 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(R) (Peru-15), Ty800 and other products; (4) the
cost, timing, scope and results of ongoing safety and efficacy trials
of TP10, CETi-1, CholeraGarde(R) (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(R)
(Peru-15), Ty800and 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, Megan(R)Egg and other future products; (8) the process
of obtaining regulatory approval for the sale of Rotarix(R) in major
commercial markets, as well as the timing and success of worldwide
commercialization of Rotarix(R) by our partner, GlaxoSmithKline; (9)
changes in existing and potential relationships with corporate
collaborators; (10) the availability, cost, delivery and quality of
clinical and commercial grade materials supplied by contract
manufacturers; (11) the timing, cost and uncertainty of obtaining
regulatory approvals to use TP10, CETi-1, CholeraGarde(R) (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; (12) the ability to obtain substantial
additional funding; (13) the ability to develop and commercialize
products before competitors; (14) the ability to retain certain
members of management; and (15) 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.
-table follows-
AVANT IMMUNOTHERAPEUTICS, INC.
CONSOLIDATED STATEMENTS
OF OPERATIONS DATA
Quarter Ended Dec. 31, Year Ended Dec. 31,
- ---------------------------------------------------------------------
2004 2003 2004 2003
OPERATING REVENUE
Product
Development and
Licensing
Agreements $2,172,600 $183,900 $4,565,700 $1,803,900
Government
Contract
Revenue 186,400 631,900 2,115,200 2,661,200
Product Royalties 48,300 41,900 177,700 167,800
- ----------------------------------------------------------------------
Total Operating
Revenue 2,407,300 857,700 6,858,600 4,632,900
- ----------------------------------------------------------------------
OPERATING EXPENSE
Research and
Development 3,947,000 2,145,300 13,573,800 10,021,300
Cost of Revenue 300,000 - 300,000 -
General and
Administrative 1,719,600 1,442,200 5,572,000 5,350,500
Amortization of
Acquired
Intangible Assets 248,700 248,700 995,100 995,100
- ----------------------------------------------------------------------
Total Operating
Expense 6,215,300 3,836,200 20,440,900 16,366,900
- ----------------------------------------------------------------------
Operating Loss (3,808,000) (2,978,500) (13,582,300) (11,734,000)
Investment and Other
Income, Net 109,700 53,700 378,600 239,800
- ----------------------------------------------------------------------
Net loss before
cumulative effect of
change in accounting
principle (3,698,300) (2,924,800) (13,203,700) (11,494,200)
Cumulative effect of
change in accounting
principle - - - (1,175,300)
- ----------------------------------------------------------------------
Net Loss $(3,698,300) $(2,924,800) $(13,203,700) $(12,669,500)
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Basic and Diluted Net
Loss per Common Share:
Net loss before
cumulative effect
of change in
accounting
principle (0.05) (0.05) (0.18) (0.18)
Cumulative effect
of change in
accounting
principle - - - (0.02)
- ----------------------------------------------------------------------
Net Loss $(0.05) $(0.05) $(0.18) $(0.20)
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Weighted Average
Common Shares
Outstanding 74,129,200 64,707,200 72,918,600 62,512,900
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CONDENSED CONSOLIDATED
BALANCE SHEETS December 31, December 31,
- ----------------------------------------------------------------------
2004 2003
ASSETS
Cash and Marketable Securities $31,741,500 $20,251,000
Other Current Assets 2,798,200 2,058,000
Property and Equipment, net 4,164,300 912,700
Intangible and Other Assets, net 7,099,500 8,083,400
------------- -------------
Total Assets $45,803,500 $31,305,100
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $5,450,900 $3,385,400
Noncurrent Liabilities 1,944,900 -
Stockholders' Equity 38,407,700 27,919,700
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Total Liabilities and
Stockholders' Equity $45,803,500 $31,305,100
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CONTACT: AVANT Immunotherapeutics, Inc.
Una S. Ryan, Ph.D.
President and CEO
(781) 433-0771
or
Avery W. Catlin
Chief Financial Officer
(781) 433-0771
info@avantimmune.com
or
For Media:
Kureczka/Martin Associates
Joan Kureczka
(415) 821-2413
jkureczka@comcast.net