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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 8, 2006
AVANT Immunotherapeutics, Inc.
(Exact name of registrant as specified in its charter)
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Commission file number 0-15006
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 March 8, 2006, AVANT Immunotherapeutics, Inc. issued a press release
announcing its financial results for the fourth quarter and full year of 2005.
The full text of the press release is furnished as Exhibit 99.1 hereto and is
incorporated by reference herein.
The information in this Item 2.02 of this Current Report on Form 8-K and Exhibit
99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that Section, nor shall such information
be deemed incorporated by reference in any filing under the Securities Act of
1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
99.1 Press Release of AVANT Immunotherapeutics, Inc. dated March 8, 2006.
[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 8, 2006 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 8, 2006.
Exhibit 99.1
AVANT Reports Fourth Quarter and Fiscal 2005 Financial Results;
Provides 2006 Financial Guidance
NEEDHAM, Mass.--(BUSINESS WIRE)--March 8, 2006--AVANT
Immunotherapeutics, Inc. (Nasdaq:AVAN) today reported financial
results for the fourth quarter and year ended December 31, 2005. The
Company reported a net loss of $4.0 million, or $0.05 per share, for
the fourth quarter of 2005 compared to a net loss of $3.7 million, or
$0.05 per share, for the fourth quarter of 2004. For the twelve months
ended December 31, 2005, the net loss was $18.1 million, or $.24 per
share, compared with a net loss of $13.2 million, or $.18 per share,
for the twelve months of 2004. As discussed in more detail later in
this release, the increase in net loss between periods was due to
reduced revenues and increased operating expenses, offset partially by
increased investment and other income. At December 31, 2005, the
Company reported cash and cash equivalents of $23.4 million.
"For AVANT, 2005 was another year of significant milestones,
capped by the continued commercialization of the Rotarix(R) rotavirus
vaccine by our partner GlaxoSmithKline (GSK)," said Una S. Ryan,
Ph.D., President and Chief Executive Officer of AVANT
Immunotherapeutics, Inc. "The $40 million milestone payment from Paul
Royalty Fund (PRF) that we anticipate on EU commercial launch of
Rotarix(R), combined with cash on-hand, will put us in a strong
financial position to build our industry-leading bacterial vaccine
franchise."
Other key events of 2005 included:
-- Monetization of Rotarix(R) assets with PRF should bring a
total of $61 million in near-term, non-dilutive financing,
while AVANT retains a portion of longer-term royalty stream.
-- Manufacturing of oral bacterial vaccines began in our Fall
River plant.
-- Demonstration of protective immunity in adults, children and
infants by CholeraGarde(R) in a Phase 2 clinical trial in
Bangladesh, funded by our partner, the International Vaccine
Institute.
Dr. Ryan continued, "Now is a great time to be a vaccine company.
We have the technologies, product pipeline and manufacturing to build
a unique vaccine franchise that will protect people around the world
from existing and emerging diseases and pathogens. During 2006, we
anticipate bringing three more vaccine products into the clinic and
advancing our lead program into Phase 3 trials. We also expect to
realize the value we have created with our cardiovascular vaccine
programs through new partnerships."
Already in 2006, we achieved three notable milestones:
-- Results from a Phase 2b female study of TP10, our complement
inhibitor, confirmed results for female subjects in a previous
trial that TP10 does not provide a benefit to women. We
believe these results provide a clear clinical development
pathway for a males-only indication for TP10 in cardiac bypass
surgery.
-- GSK received market approval of Rotarix(R) from the European
regulatory authorities, triggering a $4 million milestone
payment to AVANT, with 50% retained by AVANT.
-- Initiation of a Phase 1/2 trial of Ty800, our typhoid fever
vaccine, by the National Institute of Allergy and Infectious
Disease (NIAID) being conducted at the Cincinnati Children's
Hospital Medical Center.
Revenues for the fourth quarter of 2005 were $634,306 compared
with revenues of $2,407,380 for the fourth quarter of 2004. The
decrease primarily reflects the recognition of a milestone fee in 2004
of $2 million from GSK for the European filing of an application for
market approval of the Rotarix(R) rotavirus vaccine. An increase in
government contract revenue during the fourth quarter in 2005 offset
in part the lower milestone fees. For the year ended December 31,
2005, revenues were $3.1 million compared with revenues of $6.9
million for 2004. The decrease in revenues results primarily from the
recognition in 2004 of $1 million in revenue from DVC LLC for rPA
clinical materials, an upfront license fee of $1 million from
AdProTech, Ltd. (now Inflazyme Ltd) and the previously mentioned $2
million milestone fee from GSK, offset by an increase in government
contract revenue in 2005.
Operating expense in the fourth quarter ended December 31, 2005
was $4.9 million compared to operating expense of $6.2 million for the
comparable quarter in 2004. The decrease is primarily due to a
reduction in clinical trial costs and contract manufacturing costs in
2005 for the company's TP10 program. In the fourth quarter of 2004,
AVANT recorded $300,000 in cost of revenue associated with the
milestone fee from GSK. For the year ended December 31, 2005,
operating expense was $22 million compared with operating expense of
$20.4 million for 2004. The increase in total operating expense is
primarily due to increased research and development (R&D) expenses due
to an increase in clinical trial costs during the first three quarters
of 2005 associated with AVANT's TP10 Phase 2b study in women,
increased personnel and facility costs incurred at our new Fall River
facility and increased general and administrative expenses. Investment
income increased in 2005, reflecting higher average interest rates
between years.
Clinical Development Program Update
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 and TP10 discussed above, include 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.
TP10: A complement inhibitor to limit damage following
cardiopulmonary bypass surgery. Clear results of a recently completed
TP10 study in women confirm that TP10 is well positioned for a
males-only cardiac bypass surgery indication. AVANT expects to partner
this program before advancing to a Phase 3 study. In addition, AVANT
is completing process development and scale-up efforts with a contract
manufacturer in preparation for a partnering arrangement.
CETi: A novel vaccine approach to cholesterol management. 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
received GMP peptide for the newly formulated vaccine and we expect to
complete toxicology, release and stability studies in 2006.
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, as well
as room temperature stability with the use of our proprietary
VitriLife(R) preservation technology. These features should make
AVANT's "next generation" vaccines uniquely suited to address both
large commercial markets and serious world health needs.
In 2005, AVANT with its partner, the International Vaccine
Institute (IVI), announced that CholeraGarde(R) had completed a
successful Phase 2 trial in Bangladesh where cholera is endemic. The
researchers found the single dose, oral vaccine to be well tolerated
and highly immunogenic, with 77% of children aged 9 months to 5 years
and over 70% of adults generating protective immune responses. The
ability to induce protective immune responses in children under age
two would allow the introduction of the vaccine into the routine
pediatric immunization calendar in endemic regions. There are
currently no licensed cholera vaccines indicated for use in children
under age two. AVANT is preparing for a CholeraGarde(R) Phase 3
clinical study in the U.S. planned for late this year.
In addition, the NIAID has funded the manufacture of AVANT's
typhoid fever vaccine, Ty800, for clinical testing and has initiated a
Phase 1/2 clinical trial 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.
Manufacturing: We have made significant progress in terms of
manufacturing at our Fall River facility in recent months. The
manufacture of clinical trial supplies of our oral plague vaccine is
now complete, and this product will enter human clinical testing later
this year. We are currently manufacturing CholeraGarde(R) for a
planned Phase 3 study for the travelers' vaccine market. When that
manufacturing task is done, we will then begin making clinical trial
supplies of Ty800, our oral typhoid fever vaccine, for a Phase 2 study
planned to start in early 2007.
Financial Guidance for 2006
Revenues
For 2006, AVANT expects revenue to be between $6-$7 million,
compared with 2005 revenue of $3.1 million, primarily derived from
government contracts and grants and from product milestones and
royalties. As a result of the monetization of Rotarix(R) assets with
PRF, the $40 million milestone payment that we anticipate from PRF on
EU commercial launch of Rotarix(R) will be recorded as deferred
revenue in accordance with guidance in EITF 88-18 "Sales of Future
Revenue." Revenues will be recognized and calculated based on the
ratio of total royalties received from GSK and remitted to PRF over
expected total amounts to be received by PRF and then applying this
percentage to the total cumulative consideration received from PRF to
date.
Research and Development
R&D spending is expected to be between $18-$20 million in 2006,
compared with R&D expense of $14.1 million in 2005. The change in R&D
spending from 2005 to 2006 primarily reflects the following factors:
(i) Costs associated with full operations at our Fall River
manufacturing facility for the production of bacterial vaccine
clinical supplies;
(ii) Spending on clinical trials, with the primary focus in 2006
on the initiation of our Phase 3 trial of CholeraGarde(R) and an oral
plague vaccine scheduled for proof-of-concept testing in humans during
2006;
(iii) Costs incurred on toxicology, release and stability studies
in 2006 for CETi and a number of our preclinical bacterial vaccine
programs;
(iv) Spending to complete the TP10 process development program by
Lonza plc, our contract manufacturing partner for this compound, in
preparation for partnering the program prior to Phase 3 testing; and
(v) Rotarix(R) royalty payments to Cincinnati Children's Hospital
Medical Center.
Other Operating Expenses
AVANT expects general and administrative expenses, including
amortization of acquired intangible assets, this year to be in the
range of $8-$9 million, compared with 2005 expenses of $7.9 million.
Capital Expenditures
AVANT expects capital expenditures this year to be in the range of
$5-$5.5 million, compared with $2.2 million in 2005, primarily for the
expansion of our Fall River manufacturing facility and the renovation
of our Needham headquarters and research facility.
Partnering Activities
In 2006, 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.
Non-Cash, Stock-Based Compensation
The guidance provided earlier in this release for R&D and other
operating expenses exclude the expense of employee stock options and
other stock-based compensation expense. Effective January 1, 2006, R&D
and other operating expenses calculated in accordance with GAAP will
include non-cash, stock-based compensation expense as required by
Statement of Financial Accounting Standards No. 123R, "Share-Based
Payment" and recent guidance issued by the Securities and Exchange
Commission. While AVANT is still in the process of determining the
final amount of such expense, preliminary estimates are in the range
of $1-$2 million in the aggregate, which will be allocated between R&D
and other operating expenses. These determinations are still subject
to significant uncertainty and, therefore, the final amount of
stock-based compensation expense for 2006 may differ materially from
the current estimate.
Conference Call and Webcast
Dr. Ryan and Mr. Catlin will host a conference call and live audio
webcast at 11:00 a.m. ET today, March 8th. To access the live call,
dial 888-362-4820 (within the United States) or 617-597-5345 (outside
the United States). The passcode for participants is 68826183. A
replay will be available approximately two hours after the live call.
To access the replay, dial 888-286-8010 (within the United States) or
617-801-6888 (outside the United States). The passcode I.D. # is
87676895. The replay will also be broadcast via the company's Web site
www.avantimmune.com approximately two hours after the live call.
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. AVANT has three products on the market and
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 products for biodefense,
travelers' vaccines, global health, and pandemic flu needs based on
AVANT'S rapid-protecting, single-dose, oral and temperature stable
vaccine technology.
Additional information on AVANT 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), 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, 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;(15) the amount of non-cash, stock-based
compensation expense associated with the adoption of Statement of
Financial Accounting Standards No. 123R, "Share-based payment," which
has not yet been determined; 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.
-table follows-
AVANT IMMUNOTHERAPEUTICS, INC.
CONSOLIDATED STATEMENTS
OF OPERATIONS DATA
Quarter Ended December 31, Year Ended December 31,
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2005 2004 2005 2004
REVENUE
Product
Development and
Licensing
Agreements $ 32,883 $ 2,172,548 $ 242,092 $ 4,565,666
Government
Contract Revenue 562,971 186,535 2,719,651 2,115,247
Product Royalties 38,452 48,297 126,598 177,685
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Total Revenue 634,306 2,407,380 3,088,341 6,858,598
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OPERATING EXPENSE
Research and
Development 3,010,351 4,247,010 14,063,295 13,873,826
General and
Administrative 1,652,766 1,719,619 6,894,951 5,572,032
Amortization of
Acquired Intangible
Assets 248,778 248,778 995,112 995,112
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Total Operating
Expense 4,911,895 6,215,407 21,953,358 20,440,970
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Operating Loss (4,277,589) (3,808,027) (18,865,017) (13,582,372)
Investment and
Other Income,
Net 297,892 109,626 768,448 378,593
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Net Loss $ (3,979,697)$ (3,698,401)$(18,096,569)$(13,203,779)
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Basic and Diluted
Net Loss per
Common Share $ (0.05)$ (0.05)$ (0.24)$ (0.18)
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Weighted Average
Common
Shares
Outstanding 74,162,810 74,129,225 74,143,454 72,964,640
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CONDENSED CONSOLIDATED
BALANCE SHEETS
December 31, December 31,
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2005 2004
ASSETS
Cash and Cash Equivalents $ 23,419,434 $ 31,741,494
Other Current Assets 1,185,462 2,798,266
Property and Equipment, net 5,743,663 4,164,292
Intangible and Other Assets, net 6,103,358 7,099,470
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Total Assets $ 36,451,917 $ 45,803,522
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 3,692,743 $ 5,292,185
Long-Term Liabilities 11,870,051 2,103,711
Stockholders' Equity 20,889,123 38,407,626
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Total Liabilities and Stockholders'
Equity $ 36,451,917 $ 45,803,522
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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
For Media:
Kureczka/Martin Associates
Joan Kureczka, 415-821-2413
jkureczka@comcast.net