AVANT Reports First Quarter 2008 Financial Results

AVANT Immunotherapeutics, Inc. (NASDAQ: AVAN) today reported financial results for the first quarter ended March 31, 2008. AVANT reported a net loss of $22.1 million, or $2.19 per share, for the first quarter of 2008 compared to a net loss of $4.0 million, or $0.49 per share, for the first quarter of 2007. As discussed in further detail later in this release, the increase in net loss between the three-month periods was primarily due to non-cash operating expenses, which includes a one-time non-cash charge of $14.8 million, or $1.46 per share, for purchased in-process research and development and a non-cash charge of $1.6 million, or $0.16 per share, for stock-based compensation expense, and decreased investment and other income, offset partially by increased revenues. At March 31, 2008, AVANT reported cash and cash equivalents of $11.4 million. This figure does not include upfront payments and an equity investment totaling $50 million which would occur upon the effective date of AVANT’s recently announced license and development agreement with Pfizer for CDX-110 or a $10 million milestone payment from Paul Royalty Fund upon the U.S. launch of Rotarix® expected in the second half of 2008. "AVANT recently completed one of the largest partnership agreements in cancer immunotherapy in our CDX-110 transaction with Pfizer. Additionally, this transformative deal followed the presentation of additional positive data on CDX-110 at AACR,” said Anthony S. Marucci, AVANT’s Interim President and Chief Executive Officer. "We also recently completed the AVANT Celldex merger and look forward to continuing the momentum we have created in all aspects of our business.” Key 2008 events recently announced: Entered into an exclusive worldwide licensing agreement with Pfizer for our therapeutic cancer vaccine candidate, CDX-110, which is in Phase 2/3 development for the treatment of glioblastoma multiforme (GBM). This agreement also gives Pfizer exclusive rights to the development of EGFRvIII vaccines in other potential indications. Under the licensing and development agreement, upon the effective date, Pfizer will make an upfront payment to AVANT of $40 million and will make a $10 million equity investment in AVANT, and thereafter Pfizer will fund all development costs for these programs. AVANT is also eligible to receive milestone payments exceeding $390 million for the successful development and commercialization of CDX-110 and additional EGFRvIII vaccine products, as well as double-digit royalties on any product sales. The agreement is subject to approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (as amended) and is expected to close in the second quarter of 2008. Completed the merger of AVANT Immunotherapeutics and Celldex Therapeutics. Reported results that the double-blind, placebo-controlled multi-center Phase 2 clinical trial of Ty800 met all primary endpoints. Importantly, immunogenic response was dose-dependent. Positive immune response or seroconversion (prospectively defined as a 4-fold increase in anti-LPS titers over pre-dose level) rates were 65% (36/55) and 80% (44/55) in the low and high dose groups, respectively, and was significantly (p<0.001) higher than placebo. Announced that AVANT’s partner, GlaxoSmithKline (GSK), received approval from the U.S. Food and Drug Administration (FDA) for Rotarix® for the prevention of rotavirus gastroenteritis in infants. With only two doses, Rotarix will offer protection against the most commonly circulating rotavirus types in the U.S. and allow infants to complete the vaccination series by four months of age. FDA approval triggered a $1.5 million milestone payment from GSK, $750,000 of which AVANT retained. Reported data in a late-breaking presentation at the recent American Association for Cancer Research from the Phase 2 ACT II study of CDX-110 in glioblastoma multiforme (GBM) suggesting that temozolomide (TMZ), the standard chemotherapy agent for this disease, may potentiate the effect of CDX-110. Patients vaccinated in conjunction with the daily TMZ dose had a statistically significant increase in anti-EGFRvIII antibody titers (P=0.028) compared to patients that received TMZ alone. Contrary to conventional scientific expectation, the data suggest that chemotherapy enhances the induction of a vaccine specific immune response, and that daily chemotherapy may further enhance the vaccine’s effect. Announced that Dr. Una S. Ryan had informed the Board of Directors of her intention to depart from AVANT as President and CEO of AVANT after more than15 years of service to the Company and the appointment of Anthony S. Marucci as interim President and CEO. Further Financial Highlights The net loss for the first quarter of 2008 showed an increase of $18.1 million compared to the net loss for the same period in 2007. The increase in net loss reflected an increase in operating expenses which includes a non-cash charge of $14.8 million for purchased in-process research and development and non-cash charges of $0.6 million and $1.0 million for stock-based compensation expense in research and development (R&D) expense and general and administrative (G&A) expense, respectively. The increase in net loss also reflected a decrease in investment and other income. R&D expenses in the first quarter of 2008 increased $1.7 million compared to R&D expenses in 2007 due primarily to the combined R&D expenses of the two companies from March 8 to March 31, 2008. G&A expenses increased $1.5 million due primarily to an increase in non-cash stock-based compensation expense and increased professional services expenses incurred in connection with the merger with Celldex. AVANT had lower investment income in 2008, primarily reflecting lower cash balances between periods. AVANT’s Form 10-Q for the period was filed earlier today. Important Information Related to AVANT’s Financial Results On March 7, 2008, AVANT completed the merger of a wholly-owned subsidiary of AVANT with Celldex Therapeutics, Inc. (Celldex). The merger has created a NASDAQ-listed, fully-integrated and diversified biopharmaceutical company with a deep pipeline of product candidates addressing indications in oncology, infectious and inflammatory diseases. In connection with the merger, AVANT’s board of directors approved a 1-for-12 reverse stock split of AVANT’s common stock, which became effective on March 7, 2008. As of April 30, 2008, AVANT had approximately 15 million shares outstanding. The merger was accounted for using the purchase method of accounting and was treated as an acquisition by Celldex of AVANT with Celldex being considered the accounting acquirer even though AVANT was the issuer of common stock and surviving legal entity in the transaction. Because Celldex was determined to be the acquirer for accounting purposes, the historical financial statements of Celldex became the historical financial statements of the Company. Accordingly, the financial statements of the Company prior to the merger reflect the financial position, results of operations and cash flows of Celldex only, which was then majority-owned by Medarex, Inc. Following the merger, the financial statements of the current period reflect the financial position, results of operation and cash flows of Celldex for the three-month period ended March 31, 2008 combined with the results of operations of AVANT beginning March 8, 2008. Accordingly, the attached financial information reflects the financial condition, results of operations and liquidity of the Company at March 31, 2008 and historically of Celldex on a stand-alone basis for all periods prior to March 8, 2008. The financial condition, results of operations and liquidity of the Company as of March 31, 2008 and 2007 may not be indicative of the Company’s future performance or reflect what the Company’s financial conditions, results of operations and liquidity would have been had the merger been consummated as of January 1 of each respective year or had the Company operated as a separate, stand-alone entity during the periods presented. Webcast and Conference Call AVANT will host a conference call and live audio webcast at 9:00 AM ET on Tuesday, May 20, 2008 to discuss AVANT’s first quarter 2008 financial results. To access the conference call, dial 888-713-4213 (within the U.S.), or 617-213-4865 (if calling from outside the U.S.). The passcode for participants is 12334680. An audio replay will be available approximately two hours after the call for approximately one week and can be accessed by dialing 888-286-8010 (within the U.S.), or 617-801-6888 (if calling from outside the U.S.). The passcode I.D. number is 65160343. The replay will also be broadcast via the Company’s website, www.avantimmune.com, after the live call. Additionally, a copy of this press release is available by contacting Investor Relations at 781-433-0771. About AVANT Immunotherapeutics, Inc. AVANT Immunotherapeutics, Inc. is a NASDAQ-listed company discovering and developing innovative vaccines and targeted immunotherapeutics for the treatment of cancer, infectious and inflammatory diseases. AVANT focuses on the use of tumor-specific targets and human monoclonal antibodies (mAbs) to precisely deliver therapeutic agents through its novel "targeted immunization” approach. AVANT also possesses innovative bacterial vector delivery technologies with unique manufacturing and preservation processes that offer the potential for a new generation of infectious disease vaccines. AVANT’s deep product pipeline consists of products in varying stages of development, with its lead candidate, CDX-110, partnered with Pfizer, Inc. (subject to Hart-Scott-Rodino approval), currently undergoing evaluation in a Phase 2/3 clinical trial in newly diagnosed glioblastoma multiforme, one of the most aggressive forms of brain cancer. AVANT also has five product candidates in its development pipeline including: CDX-1307, a product based on its proprietary APC Targeting Technology™, which is in two Phase 1 clinical trials for patients with advanced pancreatic, bladder, breast and colon cancer; TP10, a complement inhibitor, in development for transplantation and other indications; and Three candidates based on its oral, rapidly-protecting, single-dose and temperature-stable vaccine technology, including combination vaccines for travelers, the military and global health needs. AVANT has three commercialized products, including Rotarix® for the prevention of rotavirus infection and two human food safety vaccines for reducing salmonella infection in chickens and eggs. Additional information on AVANT Immunotherapeutics, Inc. can be obtained through its site on the World Wide Web: http://www.avantimmune.com. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements that are subject to a variety of risks and uncertainties and reflect AVANT’s current views with respect to future events and financial performance. There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by AVANT. These factors include, but are not limited to: (1) the successful integration of the businesses, multiple technologies and programs of AVANT and Celldex; (2) the ability to adopt AVANT’s APC Targeting TechnologyTM to develop new, safe and effective vaccines against oncology and infectious disease indications; (3) the ability to adapt AVANT’s vectoring systems to develop new, safe and effective orally administered vaccines against disease causing agents; (4) the ability to successfully complete product research and further development, including animal, pre-clinical and clinical studies, and commercialization of CDX-110, CDX-1307, CholeraGarde® (Peru-15), Ty800, ETEC E. coli vaccine, and other products and AVANT’s expectations regarding market growth; (5) the cost, timing, scope and results of ongoing safety and efficacy trials of CDX-110, CDX-1307, CholeraGarde® (Peru-15), Ty800, ETEC E. coli vaccine and other preclinical and clinical testing; (6) the ability to negotiate strategic partnerships or other disposition transactions for AVANT’s cardiovascular programs, including TP10 and CETi; (7) the ability of AVANT to manage multiple clinical trials for a variety of product candidates; (8) the volume and profitability of product sales of Megan®Vac 1, Megan®Egg and other future products; (9) the process of obtaining regulatory approval for the sale of Rotarix® in major commercial markets, as well as the timing and success of worldwide commercialization of Rotarix® by our partner, GlaxoSmithKline or Glaxo; (10) Glaxo’s strategy and business plans to launch and supply Rotarix® worldwide, including in the U.S. and other major markets and its payment of royalties to AVANT; (11) Pfizer’s and our strategy and business plans concerning the continued development and commercialization of CDX-110; (12) AVANT’s expectations regarding its technological capabilities and expanding its focus to broader markets for vaccines; (13) changes in existing and potential relationships with corporate collaborators; (14) the availability, cost, delivery and quality of clinical and commercial grade materials produced at AVANT’s own manufacturing facility or supplied by contract manufacturers and partners; (15) the timing, cost and uncertainty of obtaining regulatory approvals, including Hart-Scott-Rodino approval of our license and development agreement with Pfizer; (16) AVANT’s ability to develop and commercialize products before competitors that are superior to the alternatives developed by such competitors; (17) AVANT’s ability to retain certain members of management;(18) AVANT’s expectations regarding research and development expenses and general and administrative expenses; (19) AVANT’s expectations regarding cash balances, capital requirements, anticipated royalty payments (including those from Paul Royalty Fund), revenues and expenses, including infrastructure expenses; (20) the ability to obtain substantial additional funding; (21) AVANT’s belief regarding the validity of our patents and potential litigation; and (22) certain other factors that might cause AVANT’s actual results to differ materially from those in the forward-looking statements including those set forth under the headings "Business,” "Risk Factors” and Management’s Discussion and Analysis of Financial Condition and Results of Operations” in each of AVANT’s Annual Report on Form 10-K, its current Reports on Form 8-K, as well as those described in AVANT’s other press releases and filings with the Securities and Exchange Commission, from time to time. You should carefully review all of these factors, and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this press release, and AVANT does not promise to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes. AVANT IMMUNOTHERAPEUTICS, INC.       CONSOLIDATED STATEMENT Quarter OF OPERATIONS DATA   Ended March 31, 2008 2007 (Unaudited) OPERATING REVENUE Product Development and Licensing Agreements $ 119,864 $ 116,538 Government Contracts and Grants     27,534       27,502   Total Revenue     147,398       144,040     OPERATING EXPENSE Research and Development 4,486,774 2,789,365 General and Administrative 3,032,758 1,528,577 Charge for Purchased In-Process Research & Development 14,755,908 - Amortization of Acquired Intangible Assets     48,894       29,233     Total Operating Expense     22,324,334       4,347,175     Operating Loss (22,176,936 ) (4,203,135 )   Investment and Other Income, Net     46,254       170,732     Net Loss   $ (22,130,682 )   $ (4,032,403 )   Basic and Diluted Net Loss per   Common Share   $ (2.19 )   $ (0.49 ) Weighted Average Common   Shares Outstanding     10,127,435       8,309,420     CONDENSED CONSOLIDATED BALANCE SHEETS   March 31,   December 31, 2008 2007 (Unaudited) ASSETS Cash and Cash Equivalents $ 11,418,544 $ 4,909,530 Other Current Assets 11,258,378 788,843 Property and Equipment, net 14,592,563 1,918,036 Intangible and Other Assets, net   3,354,275     1,758,095   Total Assets $ 40,623,760   $ 9,374,504     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities $ 11,478,937 $ 10,136,440 Long-Term Liabilities 1,161,863 369,961 Stockholders' Equity (Deficit)   28,162,960     (1,131,897 ) Total Liabilities and Stockholders' Equity (Deficit) $ 40,803,760   $ 9,374,504