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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): August 2, 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)
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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 August 2, 2007, AVANT Immunotherapeutics, Inc. issued a press release
announcing its financial results for the second 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 August 2, 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: August 2, 2007 By: /s/ Avery W. Catlin
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Avery W. Catlin
Senior Vice President and
Chief Financial Officer
Exhibit Index
99.1 Press Release of AVANT Immunotherapeutics, Inc., dated August 2, 2007.
Exhibit 99.1
AVANT Immunotherapeutics Reports Second Quarter
and Six-Month Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--Aug. 2, 2007--AVANT
Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported financial
results for the second quarter and first six-month period of fiscal
year 2007. The Company reported a net loss of $5.5 million, or $.07
per share, for the second quarter of 2007 compared to a net loss of
$5.7 million, or $.08 per share, for the second quarter of 2006. For
the six months ended June 30, 2007, AVANT reported a net loss of $11.1
million, or $.15 per share, compared to a net loss of $8.6 million, or
$.12 per share, for the six months ended June 30, 2006. The 2007 three
and six month losses include one-time restructuring charges of
$723,785. AVANT reported cash and cash equivalents of $26 million at
June 30, 2007.
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 our active product development programs. In
April, we announced a restructuring of our company to reduce ongoing
operational costs in certain areas no longer central to our focus.
This will allow 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
will also reduce our quarterly burn rate by approximately 18% next
year, extending our financial resources."
AVANT plans to concentrate on building an enhanced portfolio of
viral and bacterial vaccines for travelers and global health 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.
Further Financial Highlights
The net loss for the second quarter of 2007 was comparable to the
net loss for the same period in 2006. The increase in revenues
primarily reflected increased product royalties offset by reduced
levels of vaccine development work billable to DVC LLC (DVC) during
the second quarter of 2007. In the second quarter of 2007, AVANT
recognized $875,018 in product royalty revenue consisting of $478,528
related to Paul Royalty Fund's (PRF) purchased interest in Rotarix(R)
net royalties and $396,490 related to royalty expense payable to
Cincinnati Children's Hospital Medical Center (CCH). Operating
expenses in 2007 include restructuring charges of $723,785 recorded
during the second quarter. R&D expenses in the second quarter of 2007
also included $396,490 of royalty expense payable to CCH. AVANT had
lower investment income in 2007, primarily reflecting lower cash
balances between periods.
The six-month results for 2007 reflect an increase in net loss
compared to the same period in 2006. This increase in net loss
primarily reflected a decrease in revenue, an increase in operating
expense, and a decrease in investment income. Revenues for the first
six months of 2007 were $2.2 million, compared with revenues of $4.2
million for the first six months 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 six months of 2007, AVANT recognized $1.8 million
in product royalty revenue consisting of $903,210 related to PRF's
purchased interest in Rotarix(R) net royalties and $850,543 related to
royalty expense payable to CCH. In the first six months of 2006, AVANT
recognized $550,803 in product royalty revenue related to PRF's
purchased interests in Rotarix(R) net royalties. The decrease in
government contracts and grants revenue in 2007 compared to 2006
primarily reflects reduced levels of vaccine development work billable
to DVC in 2007.
Increased operating expenses in the six-month results for 2007
primarily resulted from an increase in research and development
expense of approximately $1,113,725, due primarily to restructuring
charges of $723,785 recorded during the second quarter of 2007. R&D
expenses include $850,543 and $600,000 of royalty expense payable to
CCH at June 30, 2007 and 2006, respectively. The increase in operating
expenses also resulted from higher general and administrative
expenses, which are primarily due to increases in personnel-related
expenses and professional services costs. AVANT had higher investment
income in the first half of 2006 primarily reflecting higher cash
balances 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 Products
GlaxoSmithKline (GSK) has continued to pursue the global
commercialization of Rotarix(R), which has now been approved in over
90 markets worldwide, including the European Union. In June, AVANT
reported that GSK had filed for market approval in the United States.
If GSK achieves U.S. approval for Rotarix(R) and launches the vaccine
in 2008, AVANT will receive a $10 million royalty payment from PRF.
Clinical Development Program Update
In February 2006, the NIAID of the National Institutes of Health
(NIH) initiated an investigational double-blind, placebo-controlled
Phase 1/2 in-patient dose-escalation clinical trial aimed at
demonstrating the safety and immunogenicity of AVANT's Ty800 typhoid
fever vaccine. In May 2007, AVANT announced preliminary results in
which the NIAID researchers found the single-dose, oral vaccine to be
well tolerated and immunogenic, with over 90% of vaccinated subjects
generating immune responses. Based on these excellent results, AVANT
plans to further develop Ty800 to compete in the expanding typhoid
fever vaccine market, which currently has over $200 million in annual
sales. AVANT has subsequently announced the initiation of a
company-sponsored double-blind, placebo-controlled Phase 2
dose-ranging trial of Ty800.
In 2005, AVANT and 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 around year-end 2007.
In the second half of 2007, AVANT expects to initiate a Phase 1/2
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 A 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 1/2
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, August 2, 2007 to discuss AVANT's
Second Quarter and Six-Month financial results. To access the
conference call, dial 800-659-2037 (within the U.S.), or 617-614-2713
(if calling from outside the U.S.). The passcode for participants is
74142034. 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 67559598. 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
three 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: The statements made in this press release which
are not statements of historical fact are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, including, without
limitation, statements that may be identified by words such as
"expectations," "remains," "focus," "expected," "prospective,"
"expanding," "building," "continue," "progress," "plan," "efforts,"
"hope," "believe," "objectives," "opportunities," "will," "seek," and
other expressions which are predictions of or indicate future events
and trends and which do not constitute historical matters identify
forward-looking statements. These statements also include statements
regarding: (i) AVANT's expectations regarding its restructuring and
quarterly cash burn rate, (ii) AVANT's expectations to find
partnerships for the cardiovascular programs (iii) AVANT's
expectations of royalty payments from PRF related to Rotarix, (iv)
AVANT's expectations to initiate its own sponsored double-blind,
placebo-controlled Phase 2 dose-ranging trial of Ty800 and Phase 1/2
trial of its ETEC E. coli vaccine candidate, and (v) statements made
regarding AVANT's goals for its programs and products. 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) AVANT's expectations regarding
its technological capabilities and expanding its focus to broader
markets for vaccines; (8) the Company's expectations regarding the
cost of funding its 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) AVANT's belief regarding the validity of its 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 including those set forth under the
headings "Business," "Risk Factors" and Management's Discussion and
Analysis of Financial Condition and Results of Operations" in AVANT's
Annual Report on Form 10-K for the year ended December 31, 2006, 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 AVANT does 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 Quarter Six Months
OPERATIONS DATA Ended June 30, Ended June 30,
- ----------------------------------------------------------------------
2007 2006 2007 2006
(Unaudited) (Unaudited)
REVENUE
Product
Development and
Licensing
Agreements $ 10,018 $ 17,446 $ 18,104 $ 2,637,420
Government
Contracts and
Grants 88,999 460,523 351,258 960,730
Product
Royalties 910,379 27,510 1,822,231 613,816
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Total Revenue 1,009,396 505,479 2,191,593 4,211,966
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OPERATING
EXPENSE
Research and
Development 4,967,629 4,463,899 9,926,331 8,812,606
General and
Administrative 1,671,138 2,117,192 3,723,115 4,105,706
Amortization of
Acquired
Intangible
Assets 240,048 248,778 480,096 497,556
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Total Operating
Expense 6,878,815 6,829,869 14,129,542 13,415,868
- ----------------------------------------------------------------------
Operating Loss (5,869,419) (6,324,390) (11,937,949) (9,203,902)
Investment
Income, Net 364,173 654,091 806,424 934,612
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Loss before
Provision for
Income Taxes (5,505,246) (5,670,299) (11,131,525) (8,269,290)
Provision for
Income Taxes - - - 372,000
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Net Loss $(5,505,246) $(5,670,299) $(11,131,525) $(8,641,290)
- ----------------------------------------------------------------------
Basic and
Diluted Net
Loss per Common
Share $ (0.07) $ (0.08) $ (0.15) $ (0.12)
- ----------------------------------------------------------------------
Weighted Average
Common Shares
Outstanding 75,184,048 74,174,761 75,184,015 74,173,668
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CONDENSED CONSOLIDATED
BALANCE SHEETS June 30, December 31,
- ----------------------------------------------------------------------
2007 2006
(Unaudited)
ASSETS
Cash and Cash Equivalents $25,909,541 $40,911,539
Other Current Assets 1,419,553 1,491,955
Property and Equipment, net 16,555,004 13,967,800
Investment in Select Vaccines Ltd. 696,951 -
Intangible and Other Assets, net 4,628,151 5,108,248
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Total Assets $49,209,200 $61,479,542
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 8,465,338 $10,084,313
Long-Term Liabilities $49,575,359 49,234,249
Stockholders' Equity (8,831,497) 2,160,980
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Total Liabilities and Stockholders' Equity $49,209,200 $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:
Kureczka/Martin Associates
Ellen Martin, 510-832-2077
emm@pacbell.net