AVANT Reports Fourth Quarter and Fiscal 2001 Financial Results
Provides 2002 Financial Guidance
NEEDHAM, Mass.--(BW HealthWire)--Feb. 26, 2002--AVANT Immunotherapeutics, Inc. (Nasdaq: AVAN - news) today reported financial results for the fourth quarter and year ended December 31, 2001. The Company reported a net loss of $6.9 million, or $0.11 per share, for the fourth quarter of 2001 compared to a net loss of $13.5 million, or $0.24 per share, for the fourth quarter of 2000. In 2000, fourth quarter operating expense included a charge of $9.0 million for acquired in-process research and development related to the acquisition of Megan Health. Excluding this charge, net loss for the fourth quarter of 2000 would have been $4.5 million, or $0.08 per share, compared to $6.9 million, or $0.11 per share, for the fourth quarter of 2001. The increase in net loss in 2001 is primarily due to the significant increase in research and development expenses related to AVANT-funded clinical trials and costs associated with the scale-up and manufacture of clinical materials for planned clinical trials. At December 31, 2001, the Company reported cash and cash equivalents of $42.7 million.
For the year ended December 31, 2001, the Company reported a net loss of $22.8 million, or $0.39 per share, compared to a net loss of $22.0 million, or $0.42 per share, for fiscal 2000. The net loss for the year ended December 31, 2000, included a charge of $9.0 million for purchased in-process research and development related to the acquisition of Megan Health in December 2000. Excluding this charge, the net loss for 2001 increased 75.4% to $22.8 million, or $0.39 per share, compared to $13.0 million, or $0.25 per share, for 2000. The full year results for 2001 reflect an increase in revenue combined with a significant increase in operating expense compared to the same period in 2000. The increase in revenue of $2,582,700 reflects (i) amortization of revenue recognized from the Pfizer license fee received in late 2000; (ii) Pfizer's funding of research and development during 2001; (iii) twelve months of product sales of Megan®Vac 1; and (iv) increased government grant revenue recorded in 2001. The increase in operating expense of $3,191,000 is primarily due to increased clinical trials costs and clinical materials costs incurred in connection with the Company's TP10 and CETi-1 clinical programs and additional headcount, primarily in the areas of medical, regulatory, clinical assays and quality control. Also contributing to this increase was the addition of the operating costs of Megan Health in the twelve-month period in 2001 and an increase in the charges for amortization of acquired intangible assets related to the Megan Health acquisition in late 2000.
``During the past twelve months, we have achieved the following notable clinical and financial milestones,'' said Una S. Ryan, president and chief executive officer of AVANT Immunotherapeutics, Inc.
Announced results from Phase I extension study of CETi-1 cholesterol management vaccine demonstrating its tolerability and ability to raise measurable antibody titers against CETP in all dose groups
Announced results of Phase IIb study of our single dose, oral cholera vaccine candidate, demonstrating its tolerability and ability to offer 100% protection against moderate and severe diarrhea following a challenge with live virulent cholera
Signed supply agreements with Bio Sidus S.A. for manufacture of our cholera vaccine and typhoid fever vaccine for clinical trials
Initiated a placebo-controlled Phase II efficacy study of our CETi-1 cholesterol management vaccine
Licensed vaccine technology to U.S. Department of Defense contractor DynPort Vaccine Company LLC for use in development of vaccines to protect against threats of certain biological warfare agents
Raised $14 million in a direct equity financing
Dr. Ryan continued, ``We are extremely disappointed that the Phase II study of TP10 in adults undergoing cardiac surgery failed to meet its primary endpoint. However, I wish to emphasize strongly that AVANT is a company with a number of late-stage programs in clinical development. In particular, we are extremely pleased to be advancing the two lead products in our travelers' vaccines portfolio, CholeraGarde(TM) cholera vaccine and Ty800 typhoid fever vaccine, in the clinic. We are excited about developing a business franchise for safe, effective travelers' vaccines that can be administered with a single oral dose. In addition, we continue to advance CETi-1, our novel immunotherapeutic for cholesterol management, through clinical development. Finally with our partner, GlaxoSmithKline, we are developing a two-dose oral rotavirus vaccine which is expected to enter late-stage clinical studies this year. We have also improved our cash position with a direct equity placement in October which raised $14 million.''
Financial Guidance for 2002
Revenues
For 2002, AVANT expects revenue to be between $3.4-$3.8 million, compared with 2001 revenue of $3.3 million.
Cost of Product Sales
Cost of product sales of Megan®Vac 1, Megan's vaccine for use in chickens for protection against multiple strains of Salmonella bacteria, are expected to be 10-12 percent of product sales in 2002.
Research and Development
Research and development spending is expected to be between $21-$23 million in 2002, compared with 2001 R&D expense of $21.6 million. The change in R&D spending from 2001 to 2002 primarily reflects two factors:
(i) Spending on clinical trials, with the primary focus in 2002
on initiating clinical trials in our travelers' vaccines
program -- Phase III studies for CholeraGarde(TM) and Phase
II studies for Ty800, and continuation of our Phase II trial
of CETi-1 for cholesterol management. In 2001, a significant
portion of our clinical development expense was spent on the
TP10 cardiac surgery programs in adults and infants; and
(ii) The manufacture in 2002 of clinical materials by Bio Sidus
S.A. for intended clinical trials of our CholeraGarde(TM)
cholera vaccine and our Ty800 typhoid fever vaccine. In 2001,
a portion of manufacturing expenses were attributable to
scale-up and development work on TP10 by a contract
manufacturer.
Other Operating Expenses
AVANT expects selling, general and administrative expenses, including amortization of acquired intangible assets, this year to be in the range of $5.9-$6.2 million, compared with 2001 expenses of $6.3 million. The change from 2001 primarily reflects a reduction in amortization expense related to goodwill.
Net Loss Per Shares
Basic net loss per share attributable to AVANT stock is expected to be in the range of $0.38-$0.41 this year. This projection reflects estimated weighted average shares outstanding during 2002 of 60.5 million shares.
Clinical Development Programs
AVANT continues to focus on developing products that use novel applications of immunology to harness the human immune response to prevent and treat disease. AVANT expects to make substantial progress this year in advancing a number of products in its pipeline to the late stages of clinical development.
AVANT has assembled a technology portfolio for the development of single-dose, oral vaccines aimed at providing rapid protection from five of the most important causes of severe diarrheal diseases. This past year, AVANT announced results of a Phase IIb clinical trial conducted by the Walter Reed Army Institute of Research and the National Institutes of Health with the most advanced of these products - an investigational vaccine against cholera, called CholeraGarde(TM). Results of that study demonstrated the ability of AVANT's vaccine candidate to provide complete protection against moderate and severe diarrhea in vaccinated individuals challenged with live, virulent cholera. AVANT is moving rapidly to complete the manufacture of cGMP grade clinical material at Bio Sidus S.A. We are planning to complete a small dose ranging program prior to initiating Phase III human clinical studies of this product in the second half of 2002.
Development of a safe, effective cholera vaccine is the first step in establishing AVANT's travelers' vaccine franchise. AVANT expects to initiate a Phase I/II clinical study of its single dose, oral typhoid fever vaccine, called Ty800, during the middle of 2002, followed by a Phase IIb clinical study, both aimed at demonstrating clinical proof-of-principle for this second product in the travelers' vaccines portfolio. We are also developing three additional vaccines against Shigella, enterotoxigenic E. coli and Campylobacter -- all important causes of serious diarrheal diseases worldwide.
AVANT is also leveraging the value of its vaccine technology into additional markets through key collaborations. For example, we have licensed certain components of AVANT's vaccine technology to DynPort Vaccine Company LLC to use in the development of a new generation anthrax vaccine. In partnership with the International Vaccine Institute (IVI), AVANT is working to bring its products to developing countries where they are most needed. With IVI's support, clinical trials of AVANT's cholera vaccine will begin in Bangladesh during 2002. AVANT has also partnered with Pfizer, who will apply AVANT's vaccine technology to animal health and human food safety markets.
In addition, the attenuated live bacteria used to create AVANT's single-dose oral vaccines also can serve as vectors for the development of vaccines against other bacterial and viral diseases. By engineering key disease antigens into the DNA of the vector organisms, AVANT expects to be able to extend the protective ability its single-dose oral vaccines to a wide variety of illnesses. For example, our vector technologies may prove useful for improving and expanding America's vaccine arsenal against microbial agents used in war or terrorist attacks.
During 2001, AVANT announced results from a double-blinded placebo controlled extension of its earlier completed Phase I trial of its CETP vaccine (CETi-1) in healthy adult volunteers receiving a second dose of the vaccine. CETi-1 is being developed for the management of patients with low levels of HDL (high-density lipoprotein) cholesterol. Results from the extension study showed measurable antibody titers in all dose groups treated with study medication and suggest a dose-response relationship. In August 2001, AVANT initiated a placebo-controlled Phase II study of its CETi-1 vaccine in approximately 200 patients with low levels of HDL cholesterol. The objectives of the study are to evaluate the safety, immunogenicity and dose-response relationship of the CETi-1 product in patients who receive an initial immunization followed by boosters. The primary endpoint is the change in HDL cholesterol measured after the six-month booster and AVANT expects results from the trial during 2003. As clinical data become available, AVANT plans to seek a corporate partner to complete development and to commercialize the CETi-1 vaccine.
In the second half of 2002, AVANT expects its partner, GlaxoSmithKline, to initiate Phase III studies of its investigational rotavirus vaccine, Rotarix(TM), a two-dose oral rotavirus vaccine which has been shown to be helpful in preventing rotavirus gastroenteritis (RGE) disease in young children for at least two years following administration.
Dr. Ryan, Mr. Catlin and Dr. Wheeler will host a conference call at 11:00 AM EST on Wednesday, February 27, 2002 to discuss the 2001 financial results and guidance for 2002. To access the conference call, dial 800-360-9865 (within the United States), or 973-694-6836 (if calling from outside the U.S.). An audio replay will be available immediately following the call for approximately one week and can be accessed by dialing 800-428-6051 (within the U.S.), or 973-709-2089 (if calling from outside the U.S.). The passcode for the audio replay is 232692.
The call will also be broadcast via the Company's website: www.avantimmune.com. In order to access the webcast, your PC must have a sound card, speakers and Windows Media Player software. It is recommended that you configure your PC in advance of the webcast as the software download and installation can take several minutes.
AVANT Immunotherapeutics, Inc. is engaged in the discovery, development and commercialization of products that harness the human immune system to prevent and treat disease. The company is developing a broad portfolio of vaccines against viral and bacterial diseases, including single-dose oral vaccines aimed at protecting travelers from cholera, typhoid fever and other illnesses. In addition, the company is conducting clinical studies of a proprietary vaccine candidate for cholesterol management. AVANT further leverages the value of its technology portfolio through corporate partnerships. Current collaborations encompass the development of an oral human rotavirus vaccine, vaccines to combat threats of biological warfare, and vaccines addressed to human food safety and animal health.
Additional information on AVANT Immunotherapeutics, Inc. can be obtained through the Company's site on the World Wide Web: avantimmune.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements which reflect AVANT's current views with respect to future events and financial performance. The words ``believe,'' ``expect,'' ``anticipate,'' and similar expressions identify forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed in any such forward-looking statements. These factors include, but are not limited to: (1) the ability to successfully complete development and commercialization of products, including the cost, timing, scope and results of preclinical and clinical testing; (2) the ability to successfully complete product research and further development, including animal, pre-clinical and clinical studies, and the adaptation of our attenuated vaccine technology to different infectious diseases; (3) the ability of the Company to manage multiple late stage clinical trials for a variety of product candidates; (4) the volume and profitability of product sales of Megan®Vac 1 and other future products; (5) changes in existing and potential relationships with corporate collaborators; (6) the cost, delivery and quality of clinical and commercial grade materials supplied by contract manufacturers (7) the timing, cost and uncertainty of obtaining regulatory approvals; (8) the ability to obtain substantial additional funding; (9) the ability to develop and commercialize products before competitors; (10) the integration of Megan Health's business and programs; (11) the ability to retain certain members of management; and (12) other factors detailed from time to time in filings with the Securities and Exchange Commission.
AVANT IMMUNOTHERAPEUTICS, INC.
CONSOLIDATED STATEMENTS
OF OPERATIONS DATA Quarter Ended December 31,
2001 2000
OPERATING REVENUE
Product Development and
Licensing Agreements $ 866,700 $ 268,200
Product Sales 69,000 33,400
Total Operating Revenue 935,700 301,600
OPERATING EXPENSE
Research and Development 6,445,100 3,701,500
Selling, General and
Administrative 1,265,400 1,613,500
Cost of Product Sales 10,100 3,500
Charge for Purchased
In-Process Research
and Development -- 9,012,300
Legal Settlements -- --
Amortization of Acquired
Intangible Assets 343,900 206,100
Total Operating Expense 8,064,500 14,536,900
Operating Loss (7,128,800) (14,235,300)
Interest Income, Net 273,400 741,200
Net Loss $ (6,855,400) $(13,494,100)
Basic and Diluted Net Loss per
Common Share $ (0.11) $ (0.24)
Weighted Average Common
Shares Outstanding 59,917,200 55,710,700
OPERATING REVENUE Year Ended December 31,
2001 2000
Product Development and
Licensing Agreements $ 2,999,800 $ 729,800
Product Sales 346,100 33,400
Total Operating Revenue 3,345,900 763,200
OPERATING EXPENSE
Research and Development 21,580,500 10,774,200
Selling, General and
Administrative 4,914,100 4,808,300
Cost of Product Sales 36,800 3,500
Charge for Purchased
In-Process Research
and Development -- 9,012,300
Legal Settlements -- (500,000)
Amortization of Acquired
Intangible Assets 1,375,900 618,000
Total Operating Expense 27,907,300 24,716,300
Operating Loss (24,561,400) (23,953,100)
Interest Income, Net 1,808,400 1,978,100
Net Loss $(22,753,000) $(21,975,000)
Basic and Diluted Net Loss per
Common Share $ (0.39) $ (0.42)
Weighted Average Common
Shares Outstanding 57,981,800 52,438,100
CONSOLIDATED BALANCE
SHEET DATA December 31, December 31,
2001 2000
Cash and Cash Equivalents,
including Restricted Cash $ 42,665,900 $ 50,177,000
Working Capital 37,820,900 46,408,600
Accumulated Deficit 178,073,400 155,320,400
Total Stockholders' Equity 45,268,800 53,932,000
--------------------------------------------------------------------------------
Contact:
AVANT Immunotherapeutics, Inc.
Una S. Ryan, Ph.D.
President and Chief Executive Officer
(781) 433-0771
or
AVANT Immunotherapeutics, Inc.
Avery W. Catlin
Chief Financial Officer
(781) 433-0771
info@avantimmune.com |
