AVANT Immunotherapeutics Reports Third Quarter 2002 Financial Results
Wednesday October 23, 8:03 am ET
NEEDHAM, Mass.--(BUSINESS WIRE)--Oct. 23, 2002--AVANT Immunotherapeutics, Inc. (Nasdaq: AVAN - News) today reported financial results for the third quarter ended September 30, 2002. The company reported a net loss of $276,200, or $.01 per share, for the third quarter of 2002 compared to a net loss of $6.2 million, or $.11 per share, for the third quarter of 2001. The decreased loss for the third quarter of 2002 primarily reflects a significant increase in revenue and a decrease in operating expense compared to the same period in 2001 offset in part by a decrease in investment income. The increase in revenue of $3.8 million primarily results from the recognition of a $2.0 million fee payable by Novartis for the termination of its agreement on TP10 in transplantation and the recognition of the remaining $2.0 million in deferred revenue related to the Novartis agreement. The Novartis-related revenue is non-recurring in nature and the deferred revenue portion represents non-cash revenue. The decrease in operating expense of $2.3 million primarily results from a reduction in research and development expenses in the third quarter of 2002 related to the company's terminated TP10 programs and a decrease in manufacturing costs as a result of the timing of production runs for the travelers' vaccines programs. The decrease in operating expense was offset in part by an increase in facility-related expenses and increased manufacturing consultancy and corporate communications costs. The company ended the quarter with cash and cash equivalents of $26.3 million.
For the nine months ended September 30, 2002, the company reported a net loss of $10.4 million, or $.17 per share, compared to a net loss of $15.9 million, or $.28 per share, for the nine months ended September 30, 2001. The nine-month results for 2002 reflect a decrease in net loss of $5.5 million compared to the same period in 2001. This decrease in net loss primarily reflects significant increases in revenue and decreases in operating expense, offset in part by a decrease in investment income. The increase in revenue primarily results from the recognition of approximately $4.0 million in revenue related to the termination of the Novartis TP10 agreement. The decrease in operating expense is primarily due to decreased clinical trials costs and clinical materials costs incurred in connection with the company's clinical programs. It also reflects the elimination of goodwill amortization, offset in part by an increase in consultancy, legal and facility-related expenses. The decrease in investment income reflects lower average cash balances between periods and significantly lower interest rates.
"We believe the termination of the Novartis agreement related to the use of TP10 in transplantation is an important event for AVANT, because it expands the licensing opportunities for TP10," said Una S. Ryan, Ph.D., President and Chief Executive Officer of AVANT Immunotherapeutics, Inc. "We are now able to offer potential partners a worldwide license for all fields, which we believe improves the likelihood of a partnership arrangement."
In a separate, related announcement, AVANT also announced today its intent to acquire the technology and intellectual property portfolio of Universal Preservation Technologies, Inc. (UPT), a privately held company based in San Diego, California. Through this acquisition, AVANT gains exclusive rights to UPT's VitriLife® process for use in AVANT's oral vaccines and certain other non-injectable applications. VitriLife is a patented drying method for the industrial-scale preservation of biological solutions and suspensions such as proteins, enzymes, viruses, bacteria and other cells, for shipping and storage at or above room temperature.
Review of Additional Events During the Quarter
Bioterrorism Vaccines
In early July, AVANT was awarded a Phase I Small Business Innovation Research (SBIR) grant by the National Institute of Allergy and Infectious Disease (NIAID) of the National Institutes of Health (NIH) to support the development of the company's single oral-dose bacterial vectors to immunize people against anthrax. The proposed bacterial vectors are derived from AVANT's cholera and typhoid fever vaccines currently in clinical development. During the quarter, AVANT has been active in ongoing discussions with the U.S. government regarding development of vaccines to protect against bioterrorism agents.
Last week AVANT announced that its partner, DynPort Vaccine Company LLC (DVC), will enter into a Phase I clinical trial of a new injectable recombinant anthrax vaccine in approximately 70 volunteers. The vaccine candidate consists of a highly purified protein - Protective Antigen - derived from the anthrax bacterium using recombinant technology and advance production processes licensed from AVANT. DVC hopes this vaccine will offer a safe, effective product to support the country's need for a new-generation anthrax vaccine.
Bacterial Vaccines
On September 30, 2002, AVANT announced successful results of a Phase II dose-ranging study of its investigational cholera vaccine, Peru-15. The objectives of this study were to evaluate the safety, immunogenicity and dose-response relationship of the vaccine with the aim of optimizing dosage and evaluating a new buffer system prior to undertaking larger-scale clinical studies.
"The excellent results from this trial have allowed us to establish that a single dose produces an effective immune response," said Alistair Wheeler, MD, Vice President, Medical Affairs of AVANT Immunotherapeutics. "The vaccine was well tolerated in vaccinated individuals, results confirm that the new buffer system works well with Peru-15, and the study generated sufficient data to describe a dose-response relationship for the vaccine. We are pleased that the results of this study provide a solid basis for the further clinical development of Peru-15."
Cholesterol Management Vaccine
During the quarter, AVANT also completed enrollment in the placebo-controlled Phase II study of its cholesterol management vaccine (CETi-1) in approximately 200 subjects with low levels of HDL (high-density lipoprotein) cholesterol. The company is half way through this important two-year study and on schedule to report results in the second half of 2003.
Animal Health and Food Safety Vaccines
Additionally, AVANT has appointed Lohmann Animal Health International (LAHI) as the exclusive distributor of its Megan Health poultry vaccines in North America, which AVANT believes leverages the value of its oral vaccine technology in a significant market opportunity outside of AVANT's own focus on human health care.
"AVANT has made significant progress in leveraging the value of its vaccine technologies for multiple human healthcare needs, as well as applications in animal health and food safety," commented Dr. Ryan.
Dr. Ryan and Mr. Catlin will host a conference call at 11:00 AM EDT on Wednesday, October 23, 2002 to discuss the Third Quarter 2002 financial results. 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 within two hours 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 264024.
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. 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 our 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. These forward-looking statements are based on management's beliefs and assumptions and information currently available. The words "believe", "expect", "anticipate", "intend", "estimate", "project" and similar expressions which do not relate solely to historical matters 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 ability to retain certain members of management; and (11) other factors detailed from time to time in filings with the Securities and Exchange Commission. We expressly disclaim any responsibility to update forward-looking statements.
AVANT IMMUNOTHERAPEUTICS, INC.
CONSOLIDATED
STATEMENTS OF Quarter Year to Date
OPERATIONS DATA Ended September 30, Ended September 30,
2002 2001 2002 2001
(Unaudited) (Unaudited)
REVENUE
Product Development
and
Licensing
Agreements $4,493,900 $663,800 $5,601,600 $2,133,100
Product Sales 66,500 61,700 292,400 277,100
Total Revenue 4,560,400 725,500 5,894,000 2,410,200
OPERATING EXPENSE
Research and
Development 3,423,200 5,633,100 11,899,200 15,135,400
Selling, General
and
Administrative 1,325,600 1,321,700 4,199,000 3,648,700
Cost of
Product Sales 10,300 8,400 41,000 26,700
Amortization of
Acquired
Intangible
Assets 198,800 198,800 596,400 596,400
Amortization
of Goodwill -- 145,200 -- 435,600
Total Operating
Expense 4,957,900 7,307,200 16,735,600 19,842,800
Operating Loss (397,500) (6,581,700) (10,841,600) (17,432,600)
Investment
Income, Net 121,300 357,700 487,500 1,535,000
Net Loss $(276,200) $(6,224,000) $(10,354,100) $(15,897,600)
Basic and Diluted
Net Loss per
Common Share $(0.01) $(0.11) $(0.17) $(0.28)
Weighted Average
Common Shares
Outstanding 60,464,900 57,379,700 60,460,300 57,329,600
CONDENSED CONSOLIDATED
BALANCE SHEETS September 30, December 31,
2002 2001
(Unaudited)
ASSETS
Cash and Cash Equivalents $26,314,000 $42,665,900
Other Current Assets 2,830,600 677,500
Property and Equipment, net 1,038,200 987,800
Intangible and Other Assets, net 8,507,100 9,153,500
Total Assets $38,689,900 $53,484,700
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 3,623,000 $ 5,522,500
Noncurrent Liabilities 154,000 2,693,400
Stockholders' Equity 34,912,900 45,268,800
Total Liabilities and
Stockholders' Equity $38,689,900 $53,484,700
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Contact:
AVANT Immunotherapeutics, Inc.
Una S. Ryan, Ph.D., 781/433-0771
or
AVANT Immunotherapeutics, Inc.
Avery W. Catlin, 781/433-0771
info@avantimmune.com
or
For Media:
Kureczka/Martin Associates
Joan Kureczka/Jesse Fisher, 415/821-2413
jkureczka@aol.com
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Source: AVANT Immunotherapeutics, Inc. |
