Full Press Release Details
Reports Fourth Quarter and Fiscal 2007 Financial Results
NEEDHAM, Mass.--(BUSINESS WIRE)--AVANT Immunotherapeutics, Inc. (Nasdaq:
AVAN) today reported financial results for the fourth quarter and year
ended December 31, 2007. AVANT reported a net loss of $5.3 million, or
$0.07 per share, for the fourth quarter of 2007 compared to a net loss
of $6.2 million, or $0.08 per share, for the fourth quarter of 2006. For
the twelve months ended December 31, 2007, the net loss was $21.6
million, or $0.29 per share, compared with a net loss of $20.4 million,
or $0.27 per share, for the twelve months of 2006. As discussed in more
detail later in this release, the increase in net loss between the
twelve-month periods was due to increased operating expenses and
decreased investment and other income, offset partially by increased
revenues. At December 31, 2007, AVANT reported cash and cash equivalents
On October 22, 2007, AVANT and Celldex Therapeutics, Inc., a privately
held company, announced the signing of a definitive merger agreement.
The merger will create 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. Closing of the merger is contingent upon a vote of approval
by AVANT's current shareholders at a special meeting of shareholders
scheduled for March 6, 2008.
"AVANT's 2007 financial results are in line with our expectations and we
are in 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 March 2008. The result will be a promising
biopharmaceutical company with a robust portfolio of immunotherapy-based
product candidates in development for serious indications in significant
Other key events of 2007 included:
Reported results from a placebo-controlled, double-blind Phase 1/2
clinical trial of AVANT's single-dose, oral typhoid fever vaccine
candidate, Ty800, under the sponsorship of the National Institutes of
Health (NIH), showed the vaccine to be well tolerated and immunogenic,
with over 90% of vaccinated subjects generating immune responses.
Completed enrollment in an AVANT-sponsored randomized,
placebo-controlled, double-blind Phase 2 study of Ty800. The
out-patient, dose-ranging trial is evaluating two dose levels of the
vaccine and results are expected in the first half of 2008.
Filing of a Biologics License Application (BLA) for Rotarix
by AVANT's partner, GlaxoSmithKline (GSK), was accepted for review by
the U.S. Food and Drug Administration (FDA). AVANT's agreement with an
affiliate of Paul Royalty Fund (PRF) includes a $10 million milestone
payment upon a Rotarix product launch in 2008 in the
United States. On February 20, 2008, the FDA's vaccines advisory
committee recommended Rotarix for approval as safe
and effective for stopping the leading cause of diarrhea in infants.
While the FDA is not obligated to follow the advice of its advisory
committee, it usually does. The FDA is expected to issue a decision on
the approval of Rotarix by April 3.
Sponsorship by the National Institute of Allergy and Infectious
Diseases (NIAID) of a Phase 1 study of AVANT's investigational
single-dose, oral vaccine designed to offer combined protection
against both enterotoxigenic Escherichia coli (ETEC) and
cholera. The trial is expected to start in the first half of 2008.
Presented preclinical data demonstrating positive immunogenicity and
lack of immune interference for an experimental single-dose, oral
vaccine combining protection from three of the most important causes
of severe enteric diseases: typhoid fever, ETEC and cholera.
Further Financial Highlights
The net loss for the fourth quarter of 2007 showed a decrease of
$958,320 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 fourth quarter of 2007. In the fourth quarter of 2007, AVANT
recognized $1,627,932 in Rotarix-related product royalty revenue,
consisting of $890,324 related to PRF's purchased interest in Rotarix
net royalties and $737,608 related to royalty expense payable to
Cincinnati Children's Hospital Medical Center (CCH). Research and
development (R&D) expenses in the fourth quarter of 2007 decreased
$725,484 compared to R&D expenses in 2006. This decrease included
$737,608 of royalty expense payable to CCH. General and Administrative
(G&A) expenses increased $466,156 due primarily to an increase in
professional services expenses incurred in connection with the proposed
merger with Celldex. AVANT had lower investment income in 2007,
primarily reflecting lower cash balances between periods.
The twelve-month results for 2007 reflect an increase in net loss of
$1.3 million compared to the same period in 2006. This increase in net
loss primarily reflected an increase in operating expense and a decrease
in investment income, partially offset by an increase in revenue.
Revenues for 2007 were $5.1 million compared with revenues of $4.9
million for 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 2007, AVANT recognized $4.5
million in product royalty revenue consisting primarily of $2.3 million
related to PRF's purchased interest in Rotarix net royalties and $2
million related to royalty expense payable to CCH. In 2006, AVANT
recognized $550,800 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 biodefense vaccine development work billable to DVC in
Increased operating expenses in fiscal 2007 primarily resulted from an
increase in research and development expense of approximately $429,396.
This was due primarily to restructuring charges of $765,204 recorded
during the second quarter of 2007 and an increase in royalty expense.
R&D expenses included $2,036,240 and $600,000 of royalty expense payable
to CCH during the twelve-month periods ended December 31, 2007 and 2006,
respectively. The increase in operating expenses was also due to higher