View:
================================================================================
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): August 2, 2006
AVANT Immunotherapeutics, Inc.
(Exact name of registrant as specified in its charter)
------------------------
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)
------------------------
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))
================================================================================
Item 2.02. Results of Operations and Financial Condition.
On August 2, 2006, AVANT Immunotherapeutics, Inc. issued a press release
announcing its financial results for the second 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 August 2, 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: August 2, 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 August 2, 2006.
Exhibit 99.1
AVANT Immunotherapeutics Reports Second Quarter and Six-Month Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--Aug. 2, 2006--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported a net loss of
$5.7 million, or $.08 per share, for the second quarter of 2006
compared to a net loss of $4.7 million, or $.06 per share, for the
second quarter of 2005. For the six months ended June 30, 2006, AVANT
reported a net loss of $8.6 million, or $.12 per share, compared to a
net loss of $9.6 million, or $.13 per share, for the six months ended
June 30, 2005. AVANT reported cash and cash equivalents of $53.5
million at June 30, 2006.
Una S. Ryan, Ph.D., AVANT's President and Chief Executive Officer,
said, "These financial results were consistent with our expectations
and we remain on track in all of our product development programs.
AVANT is also in a solid financial position to continue to advance
these programs and to build on our industry-leading bacterial vaccine
franchise, especially following the receipt of $42.6 million in total
milestone payments related to the European approval and commercial
launch of the Rotarix(R) rotavirus vaccine.
"During the remainder of 2006, we will be advancing our lead
vaccine program, CholeraGarde(R), towards a Phase 3 trial in early
2007 as well as preparing to initiate human safety studies of our oral
plague vaccine in early 2007" Dr. Ryan said.
The increased loss for the second quarter of 2006 compared to the
same period in 2005 primarily reflected a decrease in revenues
combined with an increase in operating expense, offset in part by an
increase in investment income. The decrease in revenues primarily
reflected lower billing levels to DynPort Vaccine Company LLC (DVC)
for the anthrax/plague vaccine contract during the second quarter of
2006. The increase in operating expense is primarily due to increased
operating expenses of the Fall River manufacturing facility, TP10
contract manufacturing costs incurred for process development and
scale-up work, offset by a reduction in clinical trials costs. The
increase in operating expenses further resulted from an increase in
general and administrative expenses partly offset by an increase in
investment income.
The six-month results for 2006 reflect a decrease in net loss
compared to the same period in 2005. This decrease in net loss
primarily reflected an increase in revenue and an increase in
investment income, offset in part by an increase in operating expense.
Product development and licensing revenue of $2.6 million was recorded
in the first quarter of 2006 due to the receipt of a milestone payment
from GlaxoSmithKline. AVANT also recognized approximately $550,000 in
revenue related to PRF Vaccine Holdings LLC's (PRF) 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 in 2006.
The increase in operating expense in 2006 compared to 2005 was
primarily a result of an increase in research and development expense
due to increases in research and development personnel and related
costs, consultant fees, contract research costs, license fees, and
non-personnel operating and facility-related costs associated with
operations of the Fall River facility These increases were offset in
part by declines in contract manufacturing costs incurred for process
development and scale-up work and clinical trials costs, 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 cash balances and higher interest
rates between periods.
The $40 million milestone payment received from PRF during the
first quarter of 2006 resulted in taxable income for AVANT. The
regular taxable income generated by this transaction will be fully
offset with available federal and state net operating loss
carryforwards. AVANT 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 European Union (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 over 65 markets
worldwide, including Brazil where a publicly funded mass vaccination
of the pediatric population began earlier this year. It has been
reported that Glaxo will file for market approval in the United States
in early 2007.
Clinical Development Program Update
In February 2006, 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 plans to seek a corporate partner to complete
development and commercialize TP10.
Also in February 2006, 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.
AVANT has additionally been advancing the preclinical development
of other vaccines in its portfolio, and expects to file an
Investigational New Drug application in the fourth quarter of 2006 to
initiate Phase 1 human safety studies in early 2007 of its oral plague
vaccine candidate.
Furthermore, AVANT expects to launch a Phase 3 clinical study in
early 2007 for its oral cholera vaccine, CholeraGarde(R), for the
travelers' market while planning for additional studies with a partner
to address global health needs. In 2005, AVANT with its partner, the
International Vaccine Institute (IVI), announced the successful
completion of a Phase 2 trial CholeraGarde(R), AVANT'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.
With respect to AVANT'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 in animal studies. AVANT
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.
Finally, AVANT initiated late last fall a new development program
that applies its proprietary bacterial vector technologies to the
development of a single-dose, oral vaccine against Avian flu. The
combination of conserved antigens together with its existing vaccine
technologies, could lead to an Avian flu vaccine with product
characteristics ideal for mass vaccinations: safe and effective,
single-dose, oral, and storable at room temperature. AVANT is
currently evaluating a number of Avian flu constructs in pre-clinical
animal models to determine their immunogenicity and, if successful,
would hope to select a vaccine candidate within 6-12 months.
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 was
completed. AVANT is currently manufacturing CholeraGarde(R) for a
planned Phase 3 study for the travelers' vaccine market. When that
manufacturing task is done, AVANT 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 Wednesday, August 2, 2006 to discuss
AVANT's Second Quarter and Six-Month financial results. To access the
conference call, dial 866-770-7125 (within the United States), or
617-213-8066 (if calling from outside the U.S.). The passcode for
participants is 79009907. 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 52485000. 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
that are subject to a variety of risks and uncertainties and reflect
AVANT's current views with respect to future events and financial
performance. There are a umber of important factors that could cause
the actual results to differ materially from those expressed in any
forward-looking statement made by AVANT. 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 any other microbes used as bioweapons and
other disease causing agents; (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, Glaxo; (9) Glaxo's strategy and business
plans to launch and supply Rotarix(R) worldwide, including in the U.S.
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;(16) AVANT's expectations regarding research and
development expenses and general and administrative expenses; (17)
DVC's ability to complete clinical trials and perform under its
agreement; (18) AVANT's expectations regarding CETP's ability to
improve cholesterol levels and AVANT's ability to develop and
commercialize CETP; (19) AVANT's expectations regarding cash balances,
anticipated royalty payments and expenses, including infrastructure
expenses; and (20) other factors detailed from time to time in filings
with the Securities and Exchange Commission. You should carefully
review all of these factors, and you should be aware that there may be
other factors that could cause these differences. These
forward-looking statements were based on information, plans and
estimates at the date of this report, and we do not promise to update
any forward-looking statements to reflect changes in underlying
assumptions or factors, new information, future events or other
changes.
AVANT IMMUNOTHERAPEUTICS, INC.
CONSOLIDATED
STATEMENTS
OF OPERATIONS Quarter Six Months
DATA Ended June 30, Ended June 30,
- ----------------------------------------------------------------------
2006 2005 2006 2005
(Unaudited) (Unaudited)
REVENUE
Product
Development and
Licensing
Agreements $17,446 $59,060 $2,637,420 $130,517
Government
Contracts and
Grants 460,523 522,963 960,730 1,389,050
Product Royalties 27,510 55,138 613,816 88,146
- ----------------------------------------------------------------------
Total Revenue 505,479 637,161 4,211,966 1,607,713
- ----------------------------------------------------------------------
OPERATING EXPENSE
Research and
Development 4,463,899 3,430,992 8,812,606 7,461,610
General and
Administrative 2,117,192 1,861,095 4,105,706 3,571,879
Amortization of
Acquired
Intangible Assets 248,778 248,778 497,556 497,556
- ----------------------------------------------------------------------
Total Operating
Expense 6,829,869 5,540,865 13,415,868 11,531,045
- ----------------------------------------------------------------------
Operating Loss (6,324,390) (4,903,704) (9,203,902) (9,923,332)
Investment
Income, Net 654,091 169,764 934,612 320,894
- ----------------------------------------------------------------------
Loss before
Provision for
Income Taxes (5,670,299) (4,733,940) (8,269,290) (9,602,438)
Provision for
Income Taxes - - 372,000 -
- ----------------------------------------------------------------------
Net Loss $(5,670,299) $(4,733,940) $(8,641,290) $(9,602,438)
- ----------------------------------------------------------------------
Basic and Diluted
Net Loss per
Common Share $(0.08) $(0.06) $(0.12) $(0.13)
- ----------------------------------------------------------------------
Weighted Average
Common
Shares
Outstanding 74,174,761 74,132,829 74,173,668 74,132,416
- ----------------------------------------------------------------------
CONDENSED CONSOLIDATED
BALANCE SHEETS June 30, December 31,
- ----------------------------------------------------------------------
2006 2005
(Unaudited) (Unaudited)
ASSETS
Cash and Cash
Equivalents $53,468,716 $23,419,434
Other Current
Assets 1,523,599 1,185,462
Property and
Equipment, net 7,950,494 5,743,663
Intangible and
Other Assets,
net 5,605,803 6,103,358
------------ ------------
Total Assets $68,548,612 $36,451,917
============ ============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current
Liabilities $6,595,344 $3,692,743
Long-Term
Liabilities $49,154,474 11,870,051
Stockholders'
Equity 12,798,794 20,889,123
------------ ------------
Total Liabilities and
Stockholders' Equity $68,548,612 $36,451,917
============ ============
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