AVANT Immunotherapeutics Reports Second Quarter and Six-Month Financial Results NEEDHAM, Mass.--(BUSINESS WIRE)

AVANT Immunotherapeutics Reports Second Quarter

and Six-Month Financial Results

NEEDHAM, Mass.--(BUSINESS WIRE)--Aug. 2, 2007--AVANT

Immunotherapeutics, Inc. (Nasdaq: AVAN) today reported financial

results for the second quarter and first six-month period of fiscal

year 2007. The Company reported a net loss of $5.5 million, or $.07

per share, for the second quarter of 2007 compared to a net loss of

$5.7 million, or $.08 per share, for the second quarter of 2006. For

the six months ended June 30, 2007, AVANT reported a net loss of $11.1

million, or $.15 per share, compared to a net loss of $8.6 million, or

$.12 per share, for the six months ended June 30, 2006. The 2007 three

and six month losses include one-time restructuring charges of

$723,785. AVANT reported cash and cash equivalents of $26 million at

Una S. Ryan, Ph.D., AVANT's President and Chief Executive Officer,

said, "These financial results were consistent with our expectations

and we remain on track in our active product development programs. In

April, we announced a restructuring of our company to reduce ongoing

operational costs in certain areas no longer central to our focus.

This will allow us to aggressively pursue those programs capable of

creating the greatest value for AVANT as a developer of

next-generation bacterial and viral vaccines. We expect this action

will also reduce our quarterly burn rate by approximately 18% next

year, extending our financial resources."

AVANT plans to concentrate on building an enhanced portfolio of

viral and bacterial vaccines for travelers and global health around

AVANT's core technologies and unique development and manufacturing

capabilities. As such, AVANT will continue to support key partners in

their development efforts but will no longer invest its resources in

biodefense research and development (R&D) activities or further invest

in clinical trials for the CETi cholesterol management vaccine or TP10

Further Financial Highlights

The net loss for the second quarter of 2007 was comparable to the

net loss for the same period in 2006. The increase in revenues

primarily reflected increased product royalties offset by reduced

levels of vaccine development work billable to DVC LLC (DVC) during

the second quarter of 2007. In the second quarter of 2007, AVANT

recognized $875,018 in product royalty revenue consisting of $478,528

related to Paul Royalty Fund's (PRF) purchased interest in Rotarix(R)

net royalties and $396,490 related to royalty expense payable to

Cincinnati Children's Hospital Medical Center (CCH). Operating

expenses in 2007 include restructuring charges of $723,785 recorded

during the second quarter. R&D expenses in the second quarter of 2007

also included $396,490 of royalty expense payable to CCH. AVANT had

lower investment income in 2007, primarily reflecting lower cash

balances between periods.

The six-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

six months of 2007 were $2.2 million, compared with revenues of $4.2

million for the first six 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 six months of 2007, AVANT recognized $1.8 million

in product royalty revenue consisting of $903,210 related to PRF's

purchased interest in Rotarix(R) net royalties and $850,543 related to

royalty expense payable to CCH. In the first six months of 2006, AVANT

recognized $550,803 in product royalty revenue related to PRF's

purchased interests in Rotarix(R) net royalties. The decrease in

government contracts and grants revenue in 2007 compared to 2006

primarily reflects reduced levels of vaccine development work billable

Increased operating expenses in the six-month results for 2007

primarily resulted from an increase in research and development

expense of approximately $1,113,725, due primarily to restructuring

charges of $723,785 recorded during the second quarter of 2007. R&D

expenses include $850,543 and $600,000 of royalty expense payable to

CCH at June 30, 2007 and 2006, respectively. The increase in operating

expenses also resulted from higher general and administrative

expenses, which are primarily due to increases in personnel-related

expenses and professional services costs. AVANT had higher investment

income in the first half of 2006 primarily reflecting higher cash

balances 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.

GlaxoSmithKline (GSK) has continued to pursue the global

commercialization of Rotarix(R), which has now been approved in over

90 markets worldwide, including the European Union. In June, AVANT

reported that GSK had filed for market approval in the United States.

If GSK achieves U.S. approval for Rotarix(R) and launches the vaccine

in 2008, AVANT will receive a $10 million royalty payment from PRF.

Clinical Development Program Update

In February 2006, the 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 further develop Ty800 to compete in the expanding typhoid

fever vaccine market, which currently has over $200 million in annual

sales. AVANT has subsequently announced the initiation of a

company-sponsored double-blind, placebo-controlled Phase 2

dose-ranging trial of Ty800.

In 2005, AVANT and its partner, the International Vaccine