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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): November 1, 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))
Item 2.02. Results of Operations and Financial Condition.
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On November 1, 2006, AVANT Immunotherapeutics, Inc. issued a press release
announcing its financial results for the third 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.
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(d) Exhibits.
Exhibit
No. Description
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99.1 Press Release of AVANT Immunotherapeutics, Inc.,
dated November 1, 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: November 1, 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 November 1, 2006.
Exhibit 99.1
AVANT Immunotherapeutics Reports Third
Quarter and Nine-Month Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--Nov. 1, 2006--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported a net loss of
$5.6 million, or $.08 per share, for the third quarter of 2006
compared to a net loss of $4.5 million, or $.06 per share, for the
third quarter of 2005. For the nine months ended September 30, 2006,
AVANT reported a net loss of $14.2 million, or $.19 per share,
compared to a net loss of $14.1 million, or $.19 per share, for the
nine months ended September 30, 2005. AVANT reported cash and cash
equivalents of $46.7 million at September 30, 2006.
"The third quarter was an eventful one for AVANT. We received two
significant awards of non-dilutive funding, providing AVANT additional
financial resources to aid in the development of our single-dose, oral
vaccines against important diseases such as cholera and typhoid fever,
for biodefense and for food safety," said Una S. Ryan, Ph.D., AVANT's
President and Chief Executive Officer.
The increased loss for the third quarter of 2006 compared to the
same period in 2005 primarily reflected a decrease in revenue combined
with an increase in operating expense, offset in part by an increase
in investment income. The decrease in revenue primarily reflected
lower billing levels to DynPort Vaccine Company LLC (DVC) for the
anthrax/plague vaccine contract during the third quarter of 2006. The
increase in operating expense is primarily due to increased research
and development personnel and related costs, non-personnel operating
and facility-related expenses of the Fall River manufacturing
facility, and TP10 contract manufacturing costs incurred for process
development and scale-up work. This was offset by a reduction in
clinical trials costs. The increase in operating expense further
resulted from an increase in general and administrative expense.
The nine-month results for 2006 reflect an increase in net loss
compared to the same period in 2005. This increase in net loss
primarily reflected an increase in operating expense offset in part by
an increase in revenue and an increase in investment income. 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 (Glaxo). 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 a decline in clinical trials costs associated with the TP10
program. The increase in operating expense also resulted from higher
general and administrative expenses, primarily due to increases in
personnel-related expenses, stock-based compensation expense, and
consulting 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 2006. Addressing a worldwide market opportunity estimated by
Glaxo at $1.8 billion, Rotarix(R) has now been approved in over 65
markets worldwide. It has been reported that Glaxo will file for
market approval in the United States in early 2007.
In September 2006, we were disappointed to receive notice from
Glaxo that Glaxo had decided to pay royalties on all sales of
Rotarix(R) rotavirus vaccine at the lower of two royalty rates under
the 1997 license agreement. Glaxo's decision to pay the lower royalty
rate (which is 70% of the full rate) is based upon its assertion that
Rotarix(R) is not covered by the patents that Glaxo licensed from
AVANT in Australia and certain European countries.
AVANT is carefully weighing the scientific and legal facts, as
well as the costs and benefits of various strategies for best
protecting AVANT's rights, in order to determine a potential legal
course of action that is in the best interest of AVANT's shareholders.
Clinical Development Program Update
During the quarter, the National Institute of Allergy and
Infectious Disease (NIAID) of the National Institutes of Health (NIH)
completed enrollment of a Phase 1/2 in-patient dose-ranging clinical
trial aimed at demonstrating the safety and immunogenicity of AVANT's
Ty800 typhoid fever vaccine. AVANT is having clinical materials
produced and plans to conduct its own Phase 2 clinical trial of Ty800
in 2007. In September 2006, AVANT was awarded a Phase 2 Small Business
Innovation Research (SBIR) grant to support further development and
manufacture of Ty800. The NIAID awarded this grant, titled
"Development and cGMP Manufacture of a Vitrified Typhoid Vaccine,"
which provides approximately $750,000 in funding to AVANT.
AVANT has additionally been advancing the preclinical development
of other vaccines in its portfolio and has scheduled a pre-IND meeting
with the FDA in the fourth quarter in anticipation of initiating a
Phase 1 clinical study of its oral ETEC E. coli vaccine candidate in
2007.
Furthermore, AVANT is planning to launch a Phase 3 clinical study
in mid-year 2007 for its oral cholera vaccine, CholeraGarde(R), for
the travelers' market while planning for additional studies with its
partner, the International Vaccine Institute (IVI). In August of this
year, AVANT announced that IVI has received $21 million in funding
from the Bill & Melinda Gates Foundation for a Cholera Vaccine
Initiative (CHOVI), which will include conducting further clinical
trials of CholeraGarde(R). Under the direction of John D. Clemens,
M.D., IVI plans to conduct Phase 2 and Phase 3 clinical trials of
CholeraGarde(R) in Bangladesh and India beginning in 2007. IVI will be
purchasing clinical materials produced at AVANT's Fall River, MA
manufacturing facility for the trials. There are currently no licensed
cholera vaccines indicated for use in children under age two anywhere
in the world.
With respect to its cardiovascular programs for TP10 and the CETP
vaccine for cholesterol management, AVANT continues to seek partners
for the development and commercialization of these programs.
In early October 2006, AVANT announced that the U.S. Congress
passed the Defense Appropriations Bill for fiscal year 2007. This bill
provides $2.6 million for the Defense Department's continued
development of AVANT's oral combination vaccine to protect against
anthrax and plague.
Moreover, AVANT announced an extended research and development
agreement with Pfizer aimed at discovering and developing vaccines to
protect livestock and companion animals from respiratory and enteric
diseases. This collaboration further leverages the value of AVANT's
vaccine technology outside its core development programs in human
health care at no cost to AVANT or its shareholders.
Finally, AVANT is evaluating a number of Avian flu constructs in
preclinical 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. AVANT is currently
manufacturing CholeraGarde(R) for a planned Phase 3 study for the
travelers' vaccine market. When that manufacturing campaign is done,
AVANT will begin making clinical trial supplies of ETEC E. coli
vaccine for a Phase 1 study planned to start in 2007.
Webcast and Conference Call
Dr. Ryan and Mr. Catlin will host a conference call and live audio
webcast at 11:00 AM ET on Wednesday, November 1, 2006 to discuss
AVANT's Third Quarter and Nine-Month financial results. To access the
conference call, dial 866-831-6272 (within the United States), or
617-213-8859 (if calling from outside the U.S.). The passcode for
participants is 80476677. 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 26277855. The replay will also be broadcast via the
Company's website 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
five 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 oral, rapid-protecting, single-dose 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 number 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, ETEC E. coli 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, ETEC E. coli 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, ETEC E. coli 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
and its payment of royalties to AVANT; (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, ETEC E. coli, 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 (including those from Glaxo)
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.
-table follows-
AVANT IMMUNOTHERAPEUTICS, INC.
Quarter Nine Months
CONSOLIDATED
STATEMENTS OF Ended September 30, Ended September 30,
OPERATIONS
DATA
- ----------------------------------------------------------------------
2006 2005 2006 2005
(Unaudited) (Unaudited)
REVENUE
Product
Development
and
Licensing
Agreements $35,475 $78,692 $2,672,895 $209,209
Government
Contracts and
Grants 280,419 767,630 1,241,149 2,156,680
Product
Royalties 23,105 - 636,921 88,146
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Total Revenue 338,999 846,322 4,550,965 2,454,035
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OPERATING
EXPENSE
Research and
Development 4,458,690 3,591,334 13,271,296 11,052,944
General and
Administrative 1,850,531 1,670,306 5,956,237 5,242,185
Amortization of
Acquired
Intangible
Assets 248,778 248,778 746,334 746,334
- ----------------------------------------------------------------------
Total Operating
Expense 6,557,999 5,510,418 19,973,867 17,041,463
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Operating Loss (6,219,000) (4,664,096) (15,422,902) (14,587,428)
Investment
Income, Net 624,331 149,662 1,558,943 470,556
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Loss before
Provision for
Income Taxes (5,594,669) (4,514,434) (13,863,959) (14,116,872)
Provision for
Income Taxes - - 372,000 -
- ----------------------------------------------------------------------
Net Loss $(5,594,669) $(4,514,434) $(14,235,959) $(14,116,872)
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Basic and
Diluted Net
Loss per
Common Share $(0.08) $(0.06) $(0.19) $(0.19)
- ----------------------------------------------------------------------
Weighted
Average Common
Shares
Outstanding 74,182,347 74,145,814 74,176,593 74,136,931
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CONDENSED CONSOLIDATED
BALANCE SHEETS September 30, December 31,
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2006 2005
(Unaudited) (Unaudited)
ASSETS
Cash and Cash Equivalents $46,681,330 $23,419,434
Other Current Assets 1,481,557 1,185,462
Property and Equipment, net 10,534,372 5,743,663
Intangible and Other Assets, net 5,357,025 6,103,358
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Total Assets $64,054,284 $36,451,917
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $8,313,350 $3,692,743
Long-Term Liabilities $48,115,441 11,870,051
Stockholders' Equity 7,625,493 20,889,123
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Total Liabilities and Stockholders'
Equity $64,054,284 $36,451,917
============ ============
CONTACT: Una S. Ryan, Ph.D.
President and CEO
AVANT Immunotherapeutics, Inc.
(781) 433-0771
or
Avery W. Catlin
Chief Financial Officer
AVANT Immunotherapeutics, Inc.
(781) 433-0771
info@avantimmune.com
or
For Media:
Joan Kureczka
Kureczka/Martin Associates
(415) 821-2413
jkureczka@comcast.net