AVANT Reports Fourth Quarter and Fiscal 2002 Financial Results
Wednesday February 26, 8:03 am ET
Provides 2003 Financial Guidance
NEEDHAM, Mass.--(BUSINESS WIRE)--Feb. 26, 2003--AVANT Immunotherapeutics, Inc. (Nasdaq: AVAN - News) today reported financial results for the fourth quarter and year ended December 31, 2002. The Company reported a net loss of $3.5 million, or $0.06 per share, for the fourth quarter of 2002 compared to a net loss of $6.9 million, or $0.11 per share, for the fourth quarter of 2001. The decreased loss for the fourth quarter of 2002 primarily reflects a decrease in operating expense compared to the same period in 2001 offset in part by decreases in revenue and investment income. The decrease in revenue of $124,900 results from a reduction in licensing revenue as a result of the termination of the Novartis agreement on TP10 in transplantation in the third quarter of 2002 offset by a milestone payment received from Pfizer in late 2002. The decrease in operating expense of $3.7 million primarily results from a reduction in research and development expenses in the fourth quarter of 2002 related to 1) the Company's terminated TP10 programs; 2) a decrease in clinical trials expenses due to fewer clinical trials in progress during the fourth quarter of 2002; 3) a decrease in manufacturing costs as a result of delays in production runs for the bacterial vaccines programs; and 4) a decrease in personnel-related expenses. The decrease in research and development expenses was offset in part by an increase in facility-related expenses and increased legal, insurance and corporate communications costs. At December 31, 2002, the Company reported cash and cash equivalents of $25.1 million.
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For the year ended December 31, 2002, the Company reported a net loss of $13.8 million, or $0.23 per share, compared to a net loss of $22.8 million, or $0.39 per share, for fiscal 2001. The full year results for 2002 reflect an increase in revenue combined with a decrease in operating expense compared to the same period in 2001. The increase in revenue of $3.4 million primarily results from the recognition of approximately $4.0 million in revenue upon the termination of the Novartis TP10 agreement offset in part by a reduction in product sales of Megan®Vac 1 and a decrease in government grant revenue recorded in 2002. The decrease in operating expense of $6.8 million 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 of $580,800, offset in part by an increase in consultancy, legal and facility-related expenses. The decrease in investment income of $1,205,700 reflects lower average cash balances between periods and significantly lower interest rates.
"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.:
We completed enrollment in the Phase II efficacy study with our vaccine candidate for cholesterol management, CETi-1. We expect to report results from this lengthy study in the fourth quarter of 2003.
We also completed a Phase II dose-ranging study for our cholera vaccine candidate, CholeraGarde(TM). The study results confirm the vaccine's safety and supported the start of trials in December with the International Vaccines Institute (IVI) in Bangladesh where cholera is endemic.
We announced the acquisition of the technology and intellectual property portfolio of Universal Preservation Technologies, Inc. (UPT), including VitriLife®, a new technology with the potential to reduce manufacturing costs and improve product stability, eliminating the need for vaccine refrigeration.
Finally, clinical testing began with an injectable anthrax vaccine that uses AVANT technology. Our partner, DynPort Vaccine Company (DVC), is developing this vaccine for the U.S. Department of Defense.
We additionally announced in January 2003 a new Department of Defense subcontract from DVC that supports the development of an oral, combination vaccine against both anthrax and plague using our vectored vaccine technology. Under the agreement, AVANT may receive in excess of $8 million over a two-year period, covering vaccine development through preclinical testing.
Dr. Ryan continued, "I wish to emphasize strongly that AVANT is a company with a variety of late-stage programs in clinical development, the majority of which are supported by major companies, governmental agencies or international health organizations. In particular, we are extremely pleased to have been awarded the DVC subcontract for the development of the oral, combination anthrax and plague vaccine since it provides non-dilutive funding to the company.
Receipt of this contract means that AVANT should now have over two years of cash and cash equivalents on hand. Moreover, we are excited about using our vectored vaccine technology in support of the country's biodefense initiatives.
Dr. Ryan added, "We continue to advance CETi-1, our novel immunotherapeutic for cholesterol management, through clinical development with Phase II clinical results expected in the fourth quarter. We are supporting this current trial on our own, with the intent to partner this product for further development and potential commercialization. With our partner, GlaxoSmithKline, we are developing a two-dose oral rotavirus vaccine that is expected to enter global late-stage clinical studies in the second half of this year. Finally, we are advancing the two lead products in our bacterial vaccines portfolio, CholeraGarde(TM) cholera vaccine and Ty800 typhoid fever vaccine, in the clinic while leveraging the costs of these trials through our partners."
Clinical Development Programs
AVANT's focus is unlocking the power of the immune system to prevent and treat disease. We have assembled a broad portfolio of technologies and intellectual property that give us a strong competitive position in the vaccines arena and five of our vaccines are in clinical development. The development of immunotherapeutic vaccines like CETi-1 and the marriage of innovative vector delivery technologies with the unique Vitri®Life manufacturing process represent the potential for a new generation of vaccines. Our goal is to become a leading developer of such innovative vaccines that address health care needs on a global basis. AVANT expects to make substantial progress this year in advancing a number of products in its pipeline to the later stages of clinical development.
In the second half of 2003, AVANT expects its partner, GlaxoSmithKline, to initiate Phase III global clinical 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.
Also during the fourth quarter 2003, AVANT expects to announce results from a blinded, placebo-controlled Phase II study of its innovative 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. CETi-1 is being developed for the management of patients with low levels of HDL (high-density lipoprotein) cholesterol. As clinical data become available, AVANT plans to seek a corporate partner to complete development and to commercialize the CETi-1 vaccine.
Development of a safe, effective cholera vaccine is the first step in establishing AVANT's single-dose, oral bacterial vaccine franchise. During 2002, AVANT completed a Phase II dose-ranging study with its CholeraGarde(TM) vaccine which confirmed the safety and activity of this vaccine and supported the start of trials in December with IVI in Bangladesh where cholera is endemic. In addition, the National Institute of Allergy and Infectious Disease (NIAID) of the National Institutes of Health (NIH) and AVANT have entered into a cooperative agreement for the NIAID to conduct a Phase I in-patient dose ranging clinical trial aimed at demonstrating the safety and immunogenicity of the Ty800 typhoid fever vaccine. The trial is planned for an NIAID funded clinical site using NIAID funded clinical material. The NIAID trial seeks to confirm the safety and immunogenicity of the Ty800 oral vaccine observed in an earlier physician sponsored Ty800 vaccine study. Finally, we are developing three additional bacterial vaccines against enterotoxigenic E. coli, Shigella and Campylobacter -- all important causes of serious diarrheal diseases worldwide.
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 of its single-dose oral vaccines to a wide variety of illnesses. We believe our vector technologies may prove useful for improving and expanding America's vaccine arsenal against microbial agents used in war or terrorist attacks.
AVANT is leveraging the value of its vaccine technologies into additional markets through key collaborations. In addition to our arrangements with DVC and the NIAID to develop new generations of anthrax and plague vaccines using our vectoring technologies and IVI to bring our bacterial vaccines to developing countries where they are most needed, AVANT has also partnered with Pfizer, who will apply AVANT's vaccine technologies to animal health and human food safety markets. The Pfizer research programs are making excellent progress and in late 2002 we achieved an important milestone which resulted in a modest payment to AVANT.
Modern biotechnology offers great potential for bettering health conditions worldwide. New vaccine technologies, in particular, can provide avenues to disease prevention and treatment with notable advantages over drugs in terms of patient compliance and cost. They also offer strategies to solve global health problems, to protect both civilians and military from biowarfare threats, and to increase the safety of our food supply.
Financial Guidance for 2003
Revenues
For 2003, AVANT expects revenue to be between $6.0-$6.2 million, compared with 2002 revenue of $6.7 million.
Research and Development
Research and development spending is expected to be between $10-$12 million in 2003, compared with 2002 R&D expense of $14.7 million. The change in R&D spending from 2002 to 2003 primarily reflects two factors:
(i) Spending on clinical trials will be reduced, with the primary focus in 2003 on our Phase II trial of CETi-1 for cholesterol management. We expect clinical trial costs for our bacterial vaccines program -- Phase II studies for CholeraGarde(TM) in Bangladesh and a Phase I in-patient study for Ty800, to be incurred by our partners, the IVI and the NIH; and
(ii) A significant reduction in the level of contract manufacture expense is expected in 2003 due to delays in delivery of clinical materials of CholeraGarde(TM) vaccine from Bio Sidus and the fact that NIAID is taking on manufacturing of TY800 clinical materials.
Other Operating Expenses
AVANT expects selling, general and administrative expenses, including amortization of acquired intangible assets, this year to be in the range of $5.6-$6.2 million, compared with 2002 expenses of $6.4 million. The change from 2002 primarily reflects a reduction in expected consulting services, legal and patent expenses.
Net Loss Per Shares
Basic net loss per share attributable to AVANT stock is expected to be in the range of $0.15-$0.19 this year. This projection reflects estimated weighted average shares outstanding during 2003 of 60.5 million shares.
Dr. Ryan and Mr. Catlin will host a conference call at 11:00 AM EST on Wednesday, February 26, 2003 to discuss the 2002 financial results and guidance for 2003. To access the conference call, dial 800-915-4836 (within the United States), or 973-317-5319 (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 286493.
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 addressing a wide range of applications including bacterial and viral diseases, chronic human disease, biodefense and food safety. These include single-dose, oral vaccines that protect against important disease-causing agents and a novel, proprietary vaccine candidate for cholesterol management. AVANT's goal is to demonstrate proof-of-concept for its products before leveraging their value through 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 be cautious in relying 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 integration of the UPT technology 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 any other microbes used as bioweapons; (3) the ability to successfully complete development and commercialization of CholeraGarde(TM) (Peru-15), Ty800 and of other products; (4) the cost, timing, scope and results of ongoing safety and efficacy trials of CholeraGarde(TM) (Peru-15), Ty800 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 CholeraGarde(TM) (Peru-15), Ty800 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 and other future products; (8) changes in existing and potential relationships with corporate collaborators; (9) the cost, delivery and quality of clinical and commercial grade materials supplied by contract manufacturers (10) the timing, cost and uncertainty of obtaining regulatory approvals to use CholeraGarde(TM) (Peru-15) and Ty800, among other purposes, to protect travelers and people in endemic regions from diarrhea causing diseases and for other products; (11) the ability to obtain substantial additional funding; (12) the ability to develop and commercialize products before competitors; (13) the ability to retain certain members of management; and (14) 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 OPERATIONS DATA Quarter Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
OPERATING REVENUE
Product Development
and Licensing
Agreements $810,800 $866,700 $6,412,400 $2,999,800
Product Sales - 69,000 292,400 346,100
Total Operating
Revenue 810,800 935,700 6,704,800 3,345,900
OPERATING EXPENSE
Research and
Development 2,809,300 6,445,100 14,708,500 21,580,500
Selling, General and
Administrative 1,393,100 1,265,400 5,592,100 4,914,100
Cost of Product
Sales - 10,100 41,000 36,800
Amortization of
Acquired Intangible
Assets 198,700 198,700 795,100 795,100
Amortization of
Goodwill - 145,200 - 580,800
Total Operating
Expense 4,401,100 8,064,500 21,136,700 27,907,300
Operating Loss (3,590,300) (7,128,800)(14,431,900)(24,561,400)
Forest City
Settlement - - - -
Interest Income, Net 115,200 273,400 602,700 1,808,400
Net Loss $(3,475,100)$(6,855,400)$(13,829,200)$(22,753,000)
Basic and Diluted
Net Loss per
Common Share $(0.06) $(0.11) $(0.23) $(0.39)
Weighted Average
Common Shares
Outstanding 60,464,900 59,917,200 60,461,600 57,981,800
CONDENSED CONSOLIDATED
BALANCE SHEETS
December 31, December 31,
2002 2001
ASSETS
Cash and Cash Equivalents $25,070,700 $42,665,900
Other Current Assets 789,300 677,500
Property and Equipment, net 1,119,500 987,800
Intangible and Other Assets, net 8,253,700 9,153,500
Total Assets $35,233,200 $53,484,700
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $3,432,600 $5,522,500
Noncurrent Liabilities 456,200 2,693,400
Stockholders' Equity 31,344,400 45,268,800
Total Liabilities and Stockholders'
Equity $35,233,200 $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
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Source: AVANT Immunotherapeutics, Inc. |
