Message #23 From:
NewsBot Date: November 1, 2006 05:00:00 AM
AVAN News AVANT Immunotherapeutics Reports Third Quarter and Nine-Month Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--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®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®
in February 2006. Addressing a worldwide market opportunity estimated by
Glaxo at $1.8 billion, Rotarix®
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®
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®
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 ETECE. 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®,
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®.
Under the direction of John D. Clemens, M.D., IVI plans to conduct Phase
2 and Phase 3 clinical trials of CholeraGarde®
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® 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 ETECE. 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® (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®
(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® (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®Vac
1, Megan®Egg and other future products; (8)
the process of obtaining regulatory approval for the sale of Rotarix®
in major commercial markets, as well as the timing and success of
worldwide commercialization of Rotarix® by
our partner, Glaxo; (9) Glaxo’s strategy and
business plans to launch and supply Rotarix®
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®
(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.
