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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): October 31, 2007
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))
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Item 2.02. Results of Operations and Financial Condition.
On October 31, 2007, AVANT Immunotherapeutics, Inc. issued a press release
announcing its financial results for the third 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 October 31, 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: October 31, 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 October 31, 2007.
EXHIBIT 99.1
AVANT Immunotherapeutics Reports Third Quarter and Nine-Month Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--Oct. 31, 2007--AVANT Immunotherapeutics,
Inc. (Nasdaq: AVAN) today reported financial results for the third quarter and
first nine-month period of fiscal year 2007. The Company reported a net loss of
$5.3 million, or $.07 per share, for the third quarter of 2007 compared to a net
loss of $5.5 million, or $.07 per share, for the third quarter of 2006. For the
nine months ended September 30, 2007, AVANT reported a net loss of $16.4
million, or $.22 per share, compared to a net loss of $14.2 million, or $.19 per
share, for the nine months ended September 30, 2006. The 2007 nine month losses
include one-time restructuring charges of $765,204. AVANT reported cash and cash
equivalents of $20.3 million at September 30, 2007.
On October 22, 2007, AVANT and Celldex Therapeutics, Inc., a privately-held
company, announced the signing of a definitive merger agreement. The merger
creates a NASDAQ-listed, fully-integrated and diversified biopharmaceutical
company with a deep pipeline of product candidates addressing high-value
indications including oncology and infectious and inflammatory diseases. The
all-stock transaction, approved by both companies' Boards of Directors, will
combine the two companies under the name AVANT, and is currently expected to
close in the first quarter of 2008. Closing of the merger is contingent upon a
vote of approval by AVANT's current shareholders at a special meeting of
shareholders expected to take place in the first quarter of 2008.
"AVANT's third quarter 2007 financial results are in line with our
expectations and leave us in a strong financial position to execute on the
business plan of the proposed combined company of AVANT and Celldex," said Una
S. Ryan, Ph.D., AVANT's President and Chief Executive Officer. "We expect the
merger with Celldex to close in the first quarter of 2008 and believe that the
result will be a promising biopharmaceutical company with a robust portfolio of
immunotherapy-based product candidates in development for serious indications in
significant markets."
Further Financial Highlights
The net loss for the third quarter of 2007 showed a decrease of $267,086
compared to the net loss for the same period in 2006. The decrease in net loss
reflected an increase in revenues primarily due to increased product royalties
from net sales on Rotarix(R) offset by reduced levels of vaccine development
work billable to DVC LLC (DVC) during the third quarter of 2007. In the third
quarter of 2007, AVANT recognized $988,462 in Rotarix-related product royalty
revenue consisting of $540,374 related to Paul Royalty Fund's (PRF) purchased
interest in Rotarix net royalties and $448,088 related to royalty expense
payable to Cincinnati Children's Hospital Medical Center (CCH). Research and
development (R&D) expenses in the third quarter of 2007 were comparable to R&D
expenses in 2006 and included $448,088 of royalty expense payable to CCH.
General and Administrative (G&A) expenses increased $181,472 due primarily to an
increase in professional services expenses. AVANT had lower investment income in
2007, primarily reflecting lower cash balances between periods.
The nine-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 nine months of 2007 were $3.4 million,
compared with revenues of $4.6 million for the first nine 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 nine months of 2007, AVANT recognized $2.8 million in product
royalty revenue consisting primarily of $1.4 million related to PRF's purchased
interest in Rotarix net royalties and $1.3 million related to royalty expense
payable to CCH. In the first nine months of 2006, AVANT recognized $550,803 in
product royalty revenue related to PRF's purchased interests in Rotarix 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 nine-month results for 2007 primarily
resulted from an increase in research and development expense of approximately
$1,154,880, due primarily to restructuring charges of $765,204 recorded during
the first nine months of 2007 and an increase in royalty expense. R&D expenses
included $1,298,631 and $600,000 of royalty expense payable to CCH during the
nine-month periods ended September 30, 2007 and 2006, respectively. The increase
in operating expenses was partly offset by lower general and administrative
expenses, which are primarily due to decreases in personnel-related expenses and
consulting costs. AVANT had higher investment income in the first nine months of
2006 primarily reflecting higher cash balances between periods.
Marketed Products
GlaxoSmithKline (GSK) has continued to pursue the global commercialization
of Rotarix, which has now been approved in over 90 markets worldwide, including
the European Union. In August, AVANT reported that GSK's application for Rotarix
marketing approval had been accepted for review by the FDA. If GSK achieves U.S.
approval for Rotarix and launches the vaccine in 2008, AVANT will receive a $10
million royalty payment from PRF.
Clinical Development Program Update
In February 2006, the National Institute of Allergy and Infectious Diseases
(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 continue development
of Ty800 to compete in the expanding typhoid fever vaccine market, which
currently has annual sales of over $200 million. In July 2007, AVANT announced
the initiation of a company-sponsored double-blind, placebo-controlled Phase 2
dose-ranging trial of Ty800 in approximately 180 healthy adult volunteers. The
Phase 2 study is an out-patient, dose-ranging clinical trial that will evaluate
two dose levels of the single-dose, oral Ty800 vaccine and will follow each
subject for six months post-vaccination. Enrollment was completed in late
September 2007. Results are expected to be reported in the first half of 2008.
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 beginning around year-end 2007.
In early 2008, 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, 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 in early 2008.
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, October 31, 2007 to discuss AVANT's Third Quarter
and Nine-Month financial results. To access the conference call, dial
866-362-4831 (within the U.S.), or 617-597-5347 (if calling from outside the
U.S.). The passcode for participants is 12146414. 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 27209463. The replay
will also be broadcast via the Company's website, www.avantimmune.com, 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. is a Massachusetts-based NASDAQ-listed
company discovering and developing innovative vaccines and therapeutics that
harness the human immune system to prevent and treat disease. AVANT's innovative
bacterial vector delivery technologies with unique manufacturing and
preservation processes offer the potential for a new generation of vaccines.
AVANT has three commercialized products, including Rotarix(R) for the treatment
of rotavirus and two human food safety vaccines for reducing salmonella
infection in chickens and eggs. AVANT also has four product candidates in its
development pipeline, an anti-inflammatory agent, TP10, and three candidates
based on its oral, rapidly-protecting, single-dose and temperature-stable
vaccine technology, including combination vaccines for travelers, the military
and global health needs.
Additional information on AVANT Immunotherapeutics, Inc. can be obtained
through our site on the World Wide Web: http://www.avantimmune.com.
Additional Information about the Merger and Where to Find It
This communication may be deemed to be solicitation material in respect of
the proposed merger of AVANT and Celldex. In connection with the proposed
merger, AVANT and Celldex intend to file relevant materials with the SEC,
including AVANT's joint registration statement/proxy statement on Form S-4.
SHAREHOLDERS OF AVANT ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE
SEC, INCLUDING AVANT'S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will
be able to obtain the documents free of charge at the SEC's web site,
http://www.sec.gov, and AVANT shareholders will receive information at an
appropriate time on how to obtain transaction-related documents for free from
AVANT. Such documents are not currently available.
Participants in the Solicitation
The directors and executive officers of AVANT and Celldex may be deemed to
be participants in the solicitation of proxies from the holders of AVANT common
stock in respect of the proposed transaction. Information about the directors
and executive officers of AVANT is set forth in the proxy statement for AVANT's
most recent 10-K, which was filed with the SEC on March 16, 2007. Investors may
obtain additional information regarding the interest of AVANT and its directors
and executive officers, and Celldex and its directors and executive officers in
the proposed transaction by reading the proxy statement regarding the
acquisition when it becomes available.
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
regarding the Merger (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 Cholera 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 future experience and results to differ materially from those
expressed in any forward-looking statement made by AVANT.
Factors related to the Merger include, but are not limited to: (i) costs
related to the Merger; (ii) failure of AVANT's shareholders to approve the
Merger; (iii) AVANT's or Celldex's inability to satisfy the conditions of the
Merger; (iv) AVANT's inability to maintain its NASDAQ listing; (v) the risk that
AVANT's and Celldex's businesses will not be integrated successfully; (vi) the
combined company's inability to further identify, develop and achieve commercial
success for new products and technologies; (vii) the possibility of
Merger-related delays in the research and development necessary to select drug
development candidates and delays in clinical trials; (viii) the risk that
clinical trials by the combined company may not result in marketable products;
(ix) the risk that the combined company may be unable to successfully secure
regulatory approval of and market its drug candidates; (x) the risks associated
with reliance on outside financing to meet capital requirements; (xi) risks
associated with Celldex's new and uncertain technology and the development of
competing technologies; and (xii) risks related to the combined company's
ability to protect its proprietary technologies and patent-infringement claim.
Factors not related to the Merger include, but are not limited to: (1) the
ability to adapt AVANT's vectoring systems to develop new, safe and effective
orally administered vaccines against other disease causing agents; (2) 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 Cholera vaccine, and other products and
AVANT's expectations regarding market growth; (3) the cost, timing, scope and
results of ongoing safety and efficacy trials of CholeraGarde(R) (Peru-15),
Ty800, ETEC Cholera vaccine and other preclinical and clinical testing; (4) the
ability to negotiate strategic partnerships or other disposition transactions
for AVANT's cardiovascular programs, including TP10 and CETi; (5) the ability of
AVANT to manage multiple clinical trials for a variety of product candidates;
(6) AVANT's expectations regarding its technological capabilities and expanding
its focus to broader markets for vaccines; (7) AVANT's ability to develop
products through its collaborations; (8) changes in existing and potential
relationships with corporate collaborators; (9) 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; (10)
the timing, cost and uncertainty of obtaining regulatory approvals; (11) the
ability to develop and commercialize products before competitors that are
superior to the alternatives developed by competitors; (12) the ability to
retain certain members of management;(13) AVANT's expectations regarding
research and development expenses and general and administrative expenses; (14)
AVANT's expectations regarding cash balances, capital requirements, anticipated
royalty payments (including those from PRF), revenues and expenses, including
infrastructure expenses; (15) AVANT's belief regarding the validity of its
patents and potential litigation; and (16) 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 undertake 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 Quarter Nine Months
STATEMENTS
OF OPERATIONS Ended September 30, Ended September 30,
DATA
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2007 2006 2007 2006
(Unaudited) (Unaudited)
REVENUE
Product
Development
and
Licensing
Agreements $ 100,508 $ 35,475 $ 118,612 $ 2,672,895
Government
Contracts and
Grants 90,149 280,419 441,407 1,241,149
Product
Royalties 1,000,878 23,105 2,823,109 636,921
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Total Revenue 1,191,535 338,999 3,383,128 4,550,965
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OPERATING
EXPENSE
Research and
Development 4,457,475 4,416,320 14,383,806 13,228,926
General and
Administrative 2,000,271 1,818,799 5,723,386 5,924,505
Amortization of
Acquired
Intangible
Assets 240,048 248,778 720,144 746,334
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Total Operating
Expense 6,697,794 6,483,897 20,827,336 19,899,765
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Operating Loss (5,506,259) (6,144,898) (17,444,208) (15,348,800)
Investment
Income, Net 132,778 624,331 939,202 1,558,943
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Loss before
Provision for
Income Taxes (5,373,481) (5,520,567) (16,505,006) (13,789,857)
Provision for
Income Taxes (120,000) - (120,000) 372,000
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Net Loss $(5,253,481) $(5,520,567) $(16,385,006) $(14,161,857)
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Basic and
Diluted Net
Loss per
Common Share $ (0.07) $ (0.07) $ (0.22) $ (0.19)
- ----------------------------------------------------------------------
Weighted
Average Common
Shares
Outstanding 75,188,022 74,182,347 75,185,365 74,176,593
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CONDENSED CONSOLIDATED
BALANCE SHEETS September 30, December 31,
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2007 2006
(Unaudited)
ASSETS
Cash and Cash Equivalents $ 20,339,659 $40,911,539
Other Current Assets 1,040,718 1,491,955
Property and Equipment, net 17,072,700 13,967,800
Investment in Select Vaccines Ltd. 576,905 -
Intangible and Other Assets, net 4,374,647 5,108,248
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Total Assets $ 43,404,629 $61,479,542
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 8,762,104 $10,084,313
Long-Term Liabilities $ 48,589,127 49,234,249
Stockholders' Equity (13,946,602) 2,160,980
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Total Liabilities and Stockholders'
Equity $ 43,404,629 $61,479,542
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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