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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): August 3, 2005
Commission file number 0-15006
AVANT Immunotherapeutics, Inc.
(Exact name of registrant as specified in its charter)
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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)
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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 August 3, 2005, AVANT Immunotherapeutics, Inc. issued a press release
announcing its financial results for the second quarter of 2005. 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.
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99.1 Press Release of AVANT Immunotherapeutics, Inc. dated August 3,
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: August 3, 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 August 3, 2005.
Exhibit 99.1
AVANT Immunotherapeutics Reports
Second Quarter and Six Month Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--Aug. 3, 2005--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported financial
results for the second quarter and six months ended June 30, 2005. The
company reported a net loss of $4.7 million, or $.06 per share, for
the second quarter of 2005 compared to a net loss of $3.9 million, or
$.05 per share, for the second quarter of 2004. For the six months
ended June 30, 2005, the company reported a net loss of $9.6 million,
or $.13 per share, compared to a net loss of $5.8 million, or $.08 per
share, for the six months ended June 30, 2004. AVANT reported cash and
cash equivalents of $27 million, including a $5 million upfront
payment received from Paul Royalty Fund, at June 30, 2005.
The increased loss for the second quarter of 2005 compared to the
same period in 2004 primarily reflected a decrease in revenues
combined with an increase in operating expense. The decrease in
revenues of $255,849 primarily reflected lower billing levels to
DynPort Vaccine Company LLC ("DVC") for the anthrax/plague vaccine
contract during the second quarter of 2005. The increase in operating
expense of $654,572 is primarily due to increased clinical trial costs
associated with the ongoing TP10 Phase IIb study in women undergoing
cardiac bypass surgery and operating expenses of the Fall River
manufacturing facility, offset by a reduction in TP10 contract
manufacturing costs incurred for process development and scale-up
work. The increase in operating expenses further resulted from an
increase in general and administrative expenses primarily due to
increases in personnel-related expenses, legal and professional
services and consultancy costs.
The six-month results for 2005 reflect an increase in net loss
compared to the same period in 2004. This increase in net loss
primarily reflected a decrease in revenue and an increase in operating
expense, offset in part by an increase in investment income. The
decrease in revenue in 2005 resulted primarily from the one-time
recognition in 2004 of $1 million in revenue from DVC for rPA clinical
materials and the onetime recognition of an upfront license fee of $1
million from AdProTech, Ltd. The increase in operating expense were
primarily a result of an increase in research and development expenses
due to an increase in TP10 contract manufacturing costs and laboratory
supplies incurred for process development and scale-up work and
operating expenses of the Fall River manufacturing facility. The
increase in general and administrative expenses was primarily due to
increases in personnel-related expenses, legal and professional
services and consultancy costs. The increase in investment income
reflected higher interest rates between periods.
Una S. Ryan, Ph.D., AVANT's President and Chief Executive Officer,
said, "We were very pleased to report an important strategic
transaction in May with the Paul Royalty Fund that provided AVANT with
non-dilutive financial resources for furthering our product
development programs. Additionally, our overall financial results for
the quarter were consistent with our expectations."
"Our development programs also continue to progress as planned,"
Dr. Ryan continued. "Moreover, we were pleased last week to announce
the preliminary results of the infant and children portions of our
Phase II study of CholeraGarde(R) in Bangladesh, which reinforces the
strong safety and immunogenicity results reported last year in adults
receiving this experimental vaccine. We will now be working with
Harvard University to apply our VitriLife(R) technology for vaccine
thermostability to this product, under a grant also announced recently
from the National Institutes of Health."
Transaction with Paul Royalty Fund
On May 18, AVANT announced a transaction with Paul Royalty Fund
II, L.P. (PRF) that enables AVANT to receive a considerable amount of
the future royalty stream now from future sales by GlaxoSmithKline
(GSK) of its vaccine against rotavirus disease, Rotarix(R). At the
same time, the agreement allows AVANT to retain significant upside in
future royalty revenues depending on sales of that product. The
company announced that an affiliate of PRF would purchase, for up to
$61 million, an interest in the net royalties AVANT is due to receive
on worldwide sales of Rotarix(R). AVANT expects to receive $50 million
of this funding within the next 12 months, with a guaranteed $10
million to be received this year ($5 million received at signing and
$5 million on December 1, 2005). The remainder will be received as a
$40 million payment on European launch of Rotarix(R), currently
expected for the first half of 2006. AVANT expects to receive between
$11 and $9 million on product launch in the United States, depending
on the date of that launch.
AVANT also retains substantial upside participation in future
royalties from Rotarix(R) depending on its commercial success. Under
the agreement with PRF, AVANT will continue to retain half of up to
$5.5 million in future gross milestones payable by GSK. We will keep
92.5% of royalties above the first $27.5 million in any year, which
goes to PRF. Once PRF receives a return on its investment of 2.45
times its cash payments, AVANT will receive 92.5% of all future
royalties. If GSK does not launch Rotarix(R) in the United States by
the end of 2009, either PRF or AVANT can opt out of the related
milestone, and AVANT will retain all royalties on U.S. sales.
GSK now reports having achieved approval of Rotarix(R) in seven
countries outside the United States. "While these initial approvals do
not represent large financial markets for Rotarix(R)," said Dr. Ryan,
"they represent important gains for human health on a global basis and
provide additional clinical experience with this new vaccine."
Clinical Development Programs
AVANT announced on July 27, results in children and infants from a
randomized, Phase II double blind, placebo-controlled study of its
single-dose, oral cholera vaccine, CholeraGarde(R), conducted in
Bangladesh by the International Centre for Diarrhoeal Disease
Research, Bangladesh in collaboration with the International Vaccine
Institute (IVI). The researchers found the vaccine to be immunogenic
and well tolerated in the vaccinated children. Over 84% of children
and 70% of infants vaccinated with the effective dose responded with a
favorable immune response. If the results in children aged from 9
months to 5 years are grouped together, the responder frequency was
77%. These results were consistent with results in adults receiving
vaccination with CholeraGarde(R) in an earlier reported Phase of this
study, which showed a response rate of 70%.
The enrollment rate in the company's Phase IIb study of TP10 in
women undergoing cardiac bypass surgery improved during the quarter as
a result of steps taken to increase enrollment including the addition
of new study sites. AVANT now expects to complete enrollment in this
trial by year-end. 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. AVANT is seeking to partner the TP10 program prior to
starting a Phase III trial.
AVANT also completed all of the validation at its Fall River
manufacturing facility required to start vaccine production of the
plague component of its oral combination anthrax and plague vaccine.
The company plans to begin production of that vaccine during the third
quarter of 2005. AVANT also recently reported that it and Harvard
Medical School would receive approximately $500,000 from the National
Institutes of Health to apply AVANT's VitriLife(R) formulation to
CholeraGarde(R). In the future, AVANT plans to utilize VitriLife(R), a
proprietary technology that confers thermostability to live bacterial
vaccines, at the Fall River facility for each of AVANT's bacterial
vaccines and potentially other products.
Webcast and Conference Call
Dr. Ryan and Mr. Catlin will host a conference call at 11:00 AM
EDT on Wednesday, August 3, 2005 to discuss AVANT's Second Quarter
2005 financial results. 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 passcode for participants is 60970651. 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. number is 47416229.
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.
About AVANT Immunotherapeutics, Inc.
AVANT Immunotherapeutics, Inc. discovers and develops innovative
vaccines and therapeutics that harness the human immune system to
prevent and treat disease. 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 is also developing a
pipeline of bacteria-fighting products for biodefense, travelers'
vaccines, and global health needs based on AVANT'S rapid-protecting,
single-dose, oral and temperature stable vaccine technology.
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)GSK's strategy and business plans to launch and supply Rotarix (R)
worldwide, including in the US and other major markets;(10) changes in
existing and potential relationships with corporate collaborators;
(11) the availability, cost, delivery and quality of clinical and
commercial grade materials supplied by contract manufacturers; (12)
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; (13) the ability
to obtain substantial additional funding; (14) the ability to develop
and commercialize products before competitors and that are superior to
the alternatives developed by competitors; (15) the ability to retain
certain members of management; and (16) 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 Quarter Year to Date
STATEMENTS Ended June 30, Ended June 30,
OF OPERATIONS DATA
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2005 2004 2005 2004
(Unaudited) (Unaudited)
REVENUE
Product
Development and
Licensing
Agreements $59,060 $124,419 $130,517 $2,248,838
Government
Contracts and
Grants 522,963 714,638 1,389,050 1,594,546
Product Royalties 55,138 53,953 88,146 80,323
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Total Revenue 637,161 893,010 1,607,713 3,923,707
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OPERATING EXPENSE
Research and
Development 3,430,992 3,367,804 7,461,610 6,821,003
General and
Administrative 1,861,095 1,269,711 3,571,879 2,561,846
Amortization of
Acquired
Intangible Assets 248,778 248,778 497,556 497,556
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Total Operating
Expense 5,540,865 4,886,293 11,531,045 9,880,405
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Operating Loss (4,903,704) (3,993,283) (9,923,332) (5,956,698)
Investment
Income, Net 169,764 94,546 320,894 148,549
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Net Loss $(4,733,940) $(3,898,737) $(9,602,438) $(5,808,149)
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Basic and Diluted
Net Loss per
Common Share $(0.06) $(0.05) $(0.13) $(0.08)
- ----------------------------------------------------------------------
Weighted Average
Common
Shares
Outstanding 74,132,829 74,091,599 74,132,416 71,655,099
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CONDENSED CONSOLIDATED
BALANCE SHEETS June 30, December 31,
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2005 2004
(Unaudited)
ASSETS
Cash and Cash
Equivalents $27,028,598 $31,741,494
Other Current
Assets 6,060,212 2,798,266
Property and
Equipment, net 4,788,560 4,164,292
Intangible and
Other Assets,
net 6,600,914 7,099,470
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Total Assets $44,478,284 $45,803,522
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LIABILITIES AND STOCKHOLDERS'
EQUITY
Current
Liabilities $3,576,729 $5,450,948
Long-Term
Liabilities $11,851,886 1,944,948
Stockholders'
Equity 29,049,669 38,407,626
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Total
Liabilities
and
Stockholders'
Equity $44,478,284 $45,803,522
============ ============
CONTACT: AVANT Immunotherapeutics, Inc.
Una S. Ryan, Ph.D., 781-433-0771
President and CEO
or
AVANT Immunotherapeutics, Inc.
Avery W. Catlin, 781-433-0771
Chief Financial Officer
info@avantimmune.com
or
Kureczka/Martin Associates
Joan Kureczka, 415-821-2413
jkureczka@comcast.net