AVANT Reports First Quarter 2008 Financial Results

Business Wire, May 19, 2008

Conference Call Tuesday, May 20 at 9:00 a.m. Eastern Time

NEEDHAM, Mass. -- 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[R] 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[R] 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.