AVANT Immunotherapeutics Reports Third Quarter and Nine-Month Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--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® 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®, 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. |
