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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): May 3, 2007
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)
--------------------------------
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 3, 2007, AVANT Immunotherapeutics, Inc. issued a press release announcing
its financial results for the first quarter of 2007. 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
99.1 Press Release of AVANT Immunotherapeutics, Inc., dated May 3, 2007.
[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: May 3, 2007 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 May 3, 2007.
Exhibit 99.1
AVANT Reports First Quarter 2007 Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--May 3, 2007--AVANT Immunotherapeutics,
Inc. (Nasdaq: AVAN) today reported financial results for the first quarter ended
March 31, 2007. The Company reported a net loss of $5.6 million, or $0.07 per
share, for the first quarter of 2007, compared to a net loss of $3.0 million, or
$0.04 per share, for the first quarter of 2006. The increase in net loss between
periods primarily reflects a decrease in revenue due to a one-time milestone of
$2.6 million recorded in the first quarter of 2006 and an increase in operating
expense of 10.1% in 2007. At March 31, 2007, AVANT reported cash and cash
equivalents of $32.6 million.
Una S. Ryan, Ph.D., AVANT's President and Chief Executive Officer, noted
that these first quarter financial results were consistent with AVANT's
expectations. Dr. Ryan said, "In April, we announced a restructuring of our
company. This action is aimed at reducing ongoing operational costs in certain
areas no longer central to our focus, while allowing us to aggressively pursue
those programs capable of creating the greatest value for AVANT as a developer
of next-generation bacterial and viral vaccines. We expect this action to reduce
our quarterly burn rate by approximately 18% next year, extending our current
and projected near-term financial resources for approximately two years." AVANT
expects to record a one-time restructuring charge of approximately $1 million in
the second quarter, the cash impact of which will primarily be reflected during
the second, third and fourth quarters of 2007.
AVANT plans to concentrate on building an enhanced portfolio of viral and
bacterial vaccines for global health and travelers around AVANT's core
technologies and unique development and manufacturing capabilities. As such,
AVANT will continue to support key partners in their development efforts but
will no longer invest its resources in biodefense research and development (R&D)
activities or further invest in clinical trials for the CETi cholesterol
management vaccine or TP10 programs. AVANT will continue to seek partnerships
for its cardiovascular programs.
"Vaccines have become the fastest growing segment of the global
pharmaceutical market, projected to increase almost 11% annually between 2005
and 2010, thanks to new technologies and greater support for R&D and vaccine
purchasing," Dr. Ryan said. "AVANT is continuing to pursue opportunities in the
growing market for travelers' vaccines, as well as address the larger market for
new and improved viral vaccines - initially influenza."
To this end, in February 2007, AVANT announced an R&D partnership with
Select Vaccines Limited (ASX: SLT), an Australian biotechnology company, focused
on the use of Select Vaccines' virus-like particles (VLPs) as a platform
technology for the development of viral vaccines. The R&D efforts will initially
target the development of vaccines against influenza, including both seasonal
and pandemic forms, with the opportunity to expand the collaboration to two
other disease targets.
Further Financial Highlights
Revenues for the first quarter of 2007 were $1.2 million, compared with
revenues of $3.7 million for the first quarter of 2006. The decrease in product
development and licensing revenue in 2007 reflects a one-time milestone payment
of $2.6 million recorded in the first quarter of 2006. In the first quarter of
2007, AVANT recognized $879,209 in product royalty revenue consisting of
$425,156 related to Paul Royalty Fund's (PRF) purchased interest in Rotarix(R)
net royalties and $454,053 related to royalty expense payable to Cincinnati
Children's Hospital Medical Center (CCH). In the first quarter of 2006, AVANT
recognized $550,803 in product royalty revenue related to PRF's purchased
interests in the net royalties from Rotarix(R) worldwide net sales. The decrease
in government contracts and grants revenue in 2007 compared to 2006 primarily
reflects reduced levels of vaccine development work billable to DVC LLC in 2007.
Increased operating expenses primarily resulted from an increase in
research and development expenses of approximately $610,000, due primarily to
increases in research and development personnel and related costs, laboratory
materials and services, and non-personnel operating and facility-related costs
associated with operations of the Needham and Fall River facilities in 2007
compared to 2006. These increases were offset in part by declines in clinical
trials costs, consulting expenses and royalty expense. R&D expenses include
$454,053 and $600,000 of royalty expense payable to CCH at March 31, 2007 and
2006, respectively. The increase in operating expenses also resulted from higher
general and administrative expenses of approximately $64,000, primarily due to
increases in consulting expenses and legal expenses, partly offset by lower
personnel and related costs. AVANT had higher investment income in 2007,
primarily reflecting higher interest rates and higher cash balances between
periods.
Marketed Programs
GlaxoSmithKline has continued to pursue the global commercialization of
Rotarix(R), which has now been approved in over 65 markets worldwide, including
the European Union. It has been reported that GSK will file for market approval
in the United States in 2007. If GSK achieves U.S. approval for Rotarix(R) in
2008, AVANT will receive a $10 million royalty payment from Paul Royalty Fund.
Clinical Development Program Update
In February 2006, the NIAID of the National Institutes of Health (NIH)
initiated a Phase 1/2 in-patient dose-escalation clinical trial aimed at
demonstrating the safety and immunogenicity of AVANT's Ty800 typhoid fever
vaccine. The NIAID trial seeks to assess the safety and immunogenicity of the
Ty800 single dose, oral vaccine. AVANT expects that results of this study will
be released in mid-2007. AVANT plans to initiate its own sponsored Phase 2
dose-ranging trial of Ty800 in mid-2007.
In 2005, AVANT with its partner, the International Vaccine Institute (IVI),
announced the successful completion of a Phase 2 trial of CholeraGarde(R),
AVANT's cholera vaccine, in Bangladesh where cholera is endemic. With support
from the Gates Foundation, IVI is now planning to initiate further Phase 2 and
Phase 3 studies of CholeraGarde(R) beginning later in 2007.
In the second half of 2007, AVANT expects to initiate a Phase 1 trial of
its ETEC E. coli vaccine candidate. AVANT's long-term goal is to develop a
combination vaccine containing CholeraGarde(R), Ty800, S. paratyphi and ETEC as
a "super enteric vaccine" to address the travelers' market.
Manufacturing:
AVANT has the capability to manufacture vaccines for Phase 2 and 3 clinical
testing to current Good Manufacturing Practices (cGMP) standards through its own
state-of-the-art manufacturing facility for the production of live, attenuated
bacterial vaccines. AVANT has produced clinical trial supplies of ETEC vaccine
for the Phase 1 study planned to start later in 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 Thursday, May 3, 2007 to discuss AVANT's First Quarter 2007
financial results. To access the conference call, dial 866-510-0676 (within the
United States), or 617-597-5361 (if calling from outside the U.S.). The passcode
for participants is 85291645. 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 74784203. 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 four of AVANT's products are
in clinical development. AVANT's pipeline includes products for travelers'
vaccines and global health 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 product research and further
development, including animal, pre-clinical and clinical studies, and
commercialization of CholeraGarde(R) (Peru-15), Ty800, ETEC E. coli vaccine,
VLPs and other products and AVANT's expectations regarding market growth; (4)
the cost, timing, scope and results of ongoing safety and efficacy trials of
CholeraGarde(R) (Peru-15), Ty800, ETEC E. coli vaccine and other preclinical and
clinical testing; (5) the ability to negotiate strategic partnerships or other
disposition transactions for AVANT's cardiovascular programs, including TP10 and
CETi; (6) the ability of AVANT to manage multiple clinical trials for a variety
of product candidates; (7) our expectations regarding our technological
capabilities and expanding our focus to broader markets for vaccines; (8) our
expectations regarding the cost of funding our development partnership with
Select Vaccines Limited for the influenza vaccine, the opportunity to extend to
other disease targets, and AVANT's ability to develop products through this
collaboration; (9) changes in existing and potential relationships with
corporate collaborators; (10) the availability, cost, delivery and quality of
clinical and commercial grade materials produced at AVANT's own Manufacturing
facility or supplied by contract manufacturers and partners; (11) the timing,
cost and uncertainty of obtaining regulatory approvals; (12) the ability to
develop and commercialize products before competitors that are superior to the
alternatives developed by competitors; (13) the ability to retain certain
members of management;(14) AVANT's expectations regarding research and
development expenses and general and administrative expenses; (15) AVANT's
expectations regarding cash balances, capital requirements, anticipated royalty
payments (including those from Paul Royalty Fund), revenues and expenses,
including infrastructure expenses; (16) our belief regarding the validity of our
patents and potential litigation; and (17) certain other factors that might
cause AVANT's actual results to differ materially from those in the
forward-looking statements include those set forth under the headings
"Business," "Risk Factors" and Management's Discussion and Analysis of Financial
Condition and Results of Operations" in each of AVANT's Annual Report on Form
10-K, its Quarterly Reports on Form 8-K, as well as those described in AVANT's
other press releases and filings with the Securities and Exchange Commission,
from time to time. 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 press release, 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 STATEMENT Quarter
OF OPERATIONS DATA Ended March 31,
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2007 2006
(Unaudited)
OPERATING REVENUE
Product Development and Licensing
Agreements $ 8,086 $ 2,619,974
Government Contracts and Grants 262,259 500,207
Product Royalties 911,852 586,306
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Total Revenue 1,182,197 3,706,487
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OPERATING EXPENSE
Research and Development 4,958,702 4,348,707
General and Administrative 2,051,977 1,988,514
Amortization of Acquired Intangible Assets 240,048 248,778
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Total Operating Expense 7,250,727 6,585,999
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Operating Loss (6,068,530) (2,879,512)
Investment and Other Income, Net 442,251 280,521
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Loss before Provision for Income Taxes (5,626,279) (2,598,991)
Provision for Income Taxes - 372,000
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Net Loss $(5,626,279) $(2,970,991)
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Basic and Diluted Net Loss per
Common Share $ (0.07) $ (0.04)
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Weighted Average Common
Shares Outstanding 75,183,981 74,231,999
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CONDENSED CONSOLIDATED
BALANCE SHEETS March 31, December 31,
- ----------------------------------------------------------------------
2007 2006
(Unaudited)
ASSETS
Cash and Cash Equivalents $32,573,796 $40,911,539
Other Current Assets 1,350,755 1,491,955
Property and Equipment, net 15,551,013 13,967,800
Intangible and Other Assets, net 4,868,199 5,108,248
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Total Assets $54,343,763 $61,479,542
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $10,207,669 $10,084,313
Long-Term Liabilities $47,500,786 49,234,249
Stockholders' Equity (3,364,692) 2,160,980
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Total Liabilities and Stockholders' Equity $54,343,763 $61,479,542
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CONTACT: AVANT Immunotherapeutics, Inc.
Una S. Ryan, Ph.D., 781-433-0771
President and CEO
or
Avery W. Catlin, 781-433-0771
Chief Financial Officer
info@avantimmune.com
or
For Media:
Joan Kureczka, 415-821-2413
Kureczka/Martin Associates
jkureczka@comcast.net