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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): May 9, 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 May 9, 2006, AVANT Immunotherapeutics, Inc. issued a press release announcing
its financial results for the first quarter of 2006. 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.
(d) Exhibits.
Exhibit
No. Description
- ------- -----------
99.1 Press Release of AVANT Immunotherapeutics, Inc., dated May 9, 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 signed on its behalf by the
undersigned hereunto duly authorized.
AVANT Immunotherapeutics, Inc.
Dated: May 9, 2006 By: /s/ Avery W. Catlin
---------------------------------
Avery W. Catlin
Senior Vice President and
Chief Financial Officer
Exhibit Index
Exhibit
No. Description
- ------- -----------
99.1 Press Release of AVANT Immunotherapeutics, Inc., dated May 9, 2006.
Exhibit 99.1
AVANT Reports First Quarter 2006 Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--May 9, 2006--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported a net loss of
$3.0 million, or $0.04 per share, for the first quarter of 2006
compared to a net loss of $4.9 million, or $0.07 per share for the
first quarter of 2005. The decrease in net loss between periods
primarily reflects an increase in product development and licensing
revenue and product royalty revenue offset partly by higher operating
expense. At March 31, 2006, AVANT reported cash and cash equivalents
of $59.8 million.
Una S. Ryan, Ph.D., AVANT's President and Chief Executive Officer,
said, "These financial results were consistent with our expectations
and we are encouraged with the progress of our programs during the
first quarter of 2006. We have the technologies, product pipeline and
manufacturing capabilities to build a unique vaccine franchise that
will protect people around the world from existing and emerging
diseases. During 2006, we will be advancing our lead program,
CholeraGarde(R), towards a Phase 3 trial in early 2007." Key events of
2006 to date include:
-- Receipt of a $40 million milestone payment from Paul Royalty
Fund (PRF) related to the Company's Rotarix(R) rotavirus
vaccine that, when combined with cash on-hand, puts AVANT in a
strong financial position to build its industry-leading
bacterial vaccine franchise.
-- Results from a Phase 2b study of TP10, AVANT's complement
inhibitor, in women undergoing cardiac bypass (CABG) surgery
confirmed results from a previous trial that TP10 does not
provide a benefit to women in this setting. As the positive
results for men in the previous trial were statistically
significant in benefiting survival and decreasing
complications of CABG surgery, management believes the results
seen in this trial provide a clear clinical development
pathway for a males-only indication for TP10 in CABG surgery.
-- Market approval of Rotarix(R) from the European regulatory
authorities to GlaxoSmithKline (Glaxo), triggering a $4
million milestone payment by Glaxo to AVANT, 50% of which is
AVANT's net share under the PRF agreement.
-- Initiation of a Phase 1/2 trial of Ty800, AVANT's typhoid
fever vaccine, by the National Institute of Allergy and
Infectious Disease (NIAID), being conducted at the Cincinnati
Children's Hospital Medical Center CCH).
-- Finally, the Company's Fall River vaccine manufacturing
facility is now producing AVANT's single dose, oral vaccines.
Revenues for the first quarter of 2006 were $3.7 million compared
with revenues of $970,522 for the first quarter of 2005. In February
2006, the European Commission granted approval of Rotarix(R) in the
European Union (EU), which triggered a one-time $4 million milestone
payment from Glaxo, 50% of which is creditable against future
royalties. Product development and licensing revenue of $2.6 million
was recorded in the first quarter of 2006 and the remaining $1.4
million was remitted to PRF in accordance with the PRF agreement.
AVANT also recognized approximately $550,000 in revenue related to
PRF's purchased interests in the net royalties that AVANT receives
from Rotarix(R) worldwide net sales. The decrease in government
contracts and grants revenue in 2006 compared to 2005 primarily
reflects reduced levels of vaccine development work billable to DVC
LLC in 2006.
Increased operating expenses primarily resulted from an increase
in research and development expenses due to $600,000 of license fee
expense recorded in the first quarter of 2006 for amounts that will be
payable to CCH in connection with the aforementioned $4 million Glaxo
milestone payment. The Company also experienced increases in research
and development personnel and related costs of $456,745 and
non-personnel operating and facility-related costs of $115,230
associated with operations of the Fall River facility in 2006 compared
to 2005. These increases were offset in part by declines in contract
manufacturing costs incurred for process development and scale-up work
of $413,115 and clinical trials costs of $370,528, both associated
with the TP10 program. The increase in operating expenses also
resulted from higher general and administrative expenses, primarily
due to increases in personnel-related expenses and professional
services costs. AVANT had higher investment income in 2006 primarily
reflecting higher interest rates between periods.
The $40 million milestone payment received from PRF during the
first quarter of 2006 will result in taxable income for the Company.
The regular taxable income generated by this transaction will be fully
offset with available federal and state net operating loss
carryforwards. The Company recorded a provision of $372,000 in the
first quarter of 2006 for the alternative minimum tax that will result
from receipt of this milestone.
Marketed Programs
Glaxo received EU approval for Rotarix(R) in February. Addressing
a worldwide market opportunity estimated by Glaxo at $1.8 billion,
Rotarix(R) has now been approved in 63 markets worldwide, including
Brazil where a publicly funded mass vaccination of the pediatric
population began in the quarter. It has been reported that Glaxo will
file for market approval in the United States in early 2007.
Clinical Development Program Update
In February, AVANT reported that the TP10 females-only study did
not meet the primary endpoint, thus confirming the results for female
subjects in the previous TP10 Phase 2 trial. Therefore, given the
strong efficacy data in males shown in this previous study, AVANT
believes there is a clear clinical development pathway for a
males-only indication for TP10 in cardiac bypass surgery. Males
represent 75% of the U.S. market opportunity in cardiac bypass
surgery. AVANT believes that the TP10 program is now well positioned
for a males-only cardiac bypass surgery indication. AVANT plans to
seek a corporate partner to complete development and to commercialize
TP10.
Also in February, the NIAID of the National Institutes of Health
(NIH) initiated a Phase 1/2 in-patient dose-ranging clinical trial
aimed at demonstrating the safety and immunogenicity of AVANT's Ty800
typhoid fever vaccine. The NIAID trial seeks to confirm the safety and
immunogenicity of the Ty800 single dose, oral vaccine observed in an
earlier physician-sponsored Ty800 vaccine study.
In 2005, AVANT with its partner, the International Vaccine
Institute (IVI), announced the successful completion of a Phase 2
trial CholeraGarde(R), the Company's cholera vaccine, 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. There are currently no licensed cholera
vaccines indicated for use in children under age two anywhere in the
world. AVANT is now preparing for a CholeraGarde(R) Phase 3 clinical
study in the U.S. planned for early next year.
With respect to the Company's CETP program for cholesterol
management, in preclinical studies AVANT identified a new adjuvant for
the vaccine that elicits more than a 10-fold increase in anti-CETP
antibody titers when compared to the previous CETi-1 vaccine. The
Company has received GMP peptide for the newly formulated vaccine and
expects to complete release and stability studies in 2006. AVANT is
seeking a development partner for this program.
Manufacturing: AVANT has made significant progress in terms of
manufacturing at its Fall River facility in recent months. The
manufacture of clinical trial supplies of the oral plague vaccine is
now complete, and this product is projected to enter human clinical
testing in early 2007. AVANT is currently manufacturing
CholeraGarde(R) for a planned Phase 3 study for the travelers' vaccine
market. When that manufacturing task is done, the Company will begin
making clinical trial supplies of Ty800 for a Phase 2 study planned to
start in early 2007.
Webcast and Conference Call
Dr. Ryan and Mr. Catlin will host a conference call and live audio
webcast at 11:00 AM EDT on Tuesday, May 9, 2006 to discuss AVANT's
First Quarter 2006 financial results. To access the conference call,
dial 800-299-7635 (within the United States), or 617-786-2901 (if
calling from outside the U.S.). The passcode for participants is
54133214. 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 41797034. The
replay will also be broadcast via the Company's website
www.avantimmune.com approximately two hours after the live call.
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. 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 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;(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,"; 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 STATEMENT Quarter
OF OPERATIONS DATA Ended March 31,
- ---------------------------------------------------------------------
2006 2005
(Unaudited)
OPERATING REVENUE
Product Development and Licensing
Agreements $2,619,974 $71,457
Government Contracts and Grants 500,207 866,087
Product Royalties 586,306 33,008
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Total Revenue 3,706,487 970,552
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OPERATING EXPENSE
Research and Development 4,348,707 4,030,618
General and Administrative 1,988,514 1,710,784
Amortization of Acquired Intangible Assets 248,778 248,778
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Total Operating Expense 6,585,999 5,990,180
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Operating Loss (2,879,512) (5,019,628)
Investment and Other Income, Net 280,521 151,129
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Loss before Provision for Income Taxes (2,598,991) (4,868,499)
Provision for Income Taxes 372,000 -
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Net Loss $(2,970,991) $(4,868,499)
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Basic and Diluted Net Loss per Common Share $(0.04) $(0.07)
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Weighted Average Common Shares Outstanding 74,172,563 74,231,999
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CONDENSED CONSOLIDATED
BALANCE SHEETS March 31, December 31,
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2006 2005
(Unaudited)
ASSETS
Cash and Cash Equivalents $59,755,919 $23,419,434
Other Current Assets 1,493,979 1,185,462
Property and Equipment, net 6,203,757 5,743,663
Intangible and Other Assets, net 5,854,581 6,103,358
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Total Assets $73,308,236 $36,451,917
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $6,513,155 $3,692,743
Long-Term Liabilities $48,606,549 11,870,051
Stockholders' Equity 18,188,532 20,889,123
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Total Liabilities and Stockholders'
Equity $73,308,236 $36,451,917
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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