Celldex Therapeutics Inc (CLDX) 2007 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the first-quarter 2007 AVANT Immunotherapeutics, Inc.

earnings conference call.

At this time, all participants are in listen-only mode, and we will conduct a question-and-answer session toward the end of the conference.

(OPERATOR INSTRUCTIONS).

As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the presentation over to Una Ryan, President and CEO.

Please proceed, ma'am.

Thank you.

Good morning, ladies and gentlemen.

I'm Una Ryan, President and CEO of AVANT Immunotherapeutics, Inc.

With me on the call is Chip Catlin, AVANT's Chief Financial Officer, and Ron Ellis, Senior Vice President of R&D.

I'd like to read a short prepared text before opening the call to questions.

I went to remind you that statements made by AVANT during the call which are not historical fact may be forward-looking statements that are subject to risks and uncertainties detailed in AVANT's filings with the Securities and Exchange Commission.

Actual results could differ materially from those expressed in any forward-looking statements made by AVANT.

During the call, Chip will review AVANT's first-quarter financial results, and then I will give you a brief update on our lead clinical programs.

Following that, we will open the call to questions.

Good morning.

We announced in our press release today AVANT's first-quarter 2007 financial results.

The press release is filed as an exhibit to Form 8-K with the SEC, and is available at AVANT's website on the investor information page.

I will not review the financial results in detail on this call, as they are detailed in the press release.

But for the three months ended March 31, 2007, we reported a net loss of $5.6 million or $0.07 per share, compared to a net loss of $3 million or $0.04 per share for the three months of 2006.

The increase in net loss between periods is primarily due to a one-time milestone from Glaxo of $2.6 million recorded in the first quarter of 2006, with no such milestone payment recorded in 2007, as well as an increase in R&D expenses in 2007 as a result of increased R&D personnel and related expenses, non-personnel operating and facility-related costs associated with operations of the Needham and Fall River facilities and increased general and administrative expenses.

In March 31, 2007, our cash balance was $32.6 million.

Earlier this month, we announced a restructuring of our company.

This action is aimed at reducing ongoing operational costs in certain areas no longer central to our focus, while allowing 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 to reduce our quarterly burn by approximately 18% next year, extending our current and projected near-term financial resources for approximately two years.

AVANT expects to record a one-time restructuring charge of approximately $1 million in the second quarter, the cash impact of which will primarily be reflected during the remaining three quarters of 2007.

Now for the clinical program, I would like to briefly review our multiple ongoing clinical development programs.

Major programs include oral vaccines against cholera, typhoid fever and other important diarrheal diseases, as well as vaccines against influenza, including seasonal and pandemic forms of that disease.

Our core business is the development of next-generation vaccines for a variety of needs, including travelers, global health and food safety.

Each of these vaccines is designed to provide rapid protection with a single oral dose.

Moreover, this technology offers the capability to create super vaccines that combine protection against multiple diseases in a single product.

These features should make AVANT's next-generation vaccines uniquely suited to address both large commercial markets and serious world health needs.

CholeraGarde, our single-dose oral vaccines against cholera, is supported by the International Vaccine Institute, which plans to begin Phase II field studies with CholeraGarde in India and Bangladesh in late 2007.

The Bill and Melinda Gates Foundation has provided a $21 million grant to the International Vaccine Institute in support of these studies, for which AVANT will manufacture the vaccine in our Fall River facility.

Turning to our Ty800 program or typhoid fever vaccine, we have completed the enrollment of a Phase I/II clinical trial aimed at demonstrating the safety and immunogenicity of the Ty800 vaccine, and results should be reported shortly.

We plan to initiate our own sponsored Phase II dose-ranging trial of Ty800 in mid-2007.

We are also developing additional bacterial vaccines against enterotoxigenic E.

coli -- ETEC, as we call it -- and paratyphoid fever, also important causes of serious enteric diseases worldwide.

In the second half of 2007, we expect to initiate a phase I trial of our ETEC vaccine candidate.

In February 2007, AVANT announced its first initiative towards our goal of expanding our franchise into viral vaccines.

We announced a two-year research and development partnership with Select Vaccines Limited, focused on the use of Select Vaccines' virus-like particles or VLPs and AVANT vaccine antigens as a platform technology for the development of viral vaccines.

This joint R&D effort will initially target the development of both seasonal and pandemic forms of influenza vaccine, with the opportunity to extend the collaboration to two other disease targets.

If successful, products identified through this collaboration will be developed by AVANT.

In conclusion, we're today seeing a renaissance in interest in vaccines that is driven by scientific advancements in vaccine development and manufacturing, new vaccine products for both infectious diseases and pandemic preparedness and increased support from both government and private payers.

Our achievements to date in vaccine research development and manufacture, as well as our success in building partnerships, provides us with a firm basis to become an important player within this rapidly evolving field.

AVANT and its dedicated employees have made tremendous contributions to pioneering vaccine research and the development of important new vaccines that are being used today.

Our recent restructuring is important, so we can focus our resources on those programs that can create the greatest value for us.

During 2007, we expect to further build upon our strong technology and product base by extending our technological capabilities to address larger markets for vaccines against widespread viral illnesses like influenza and pandemic preparedness.

This is the end of my introductory statement, and I welcome your questions.

(OPERATOR INSTRUCTIONS).

Mark Monane, Needham.

I have Alan Carr and myself with questions.

I'll let Alan first.

Una, I was wondering if you could describe how you view the travelers vaccine market and how you envision the super vaccine, super enteric vaccine fitting into it.

Yes.

I think it's an important and growing market.

Since 9/11, people are back traveling extensively, and they are bringing back diseases.

So two things happen in the acute phase.

One is they ruin their vacation; and, two, they bring diseases from the endemic world back into the United States.

So I think it's very important in those terms.

But perhaps an even larger and harder-to-understand opportunity is that many of these infectious diseases actually have long-term sequelae, and so these people are setting themselves up for chronic diseases such as rheumatoid arthritis and glomerular nephritis later in life.

So I think it's very important not just in saving vacations and business trips, but also for the health of the nation long-term.

So we see it as an important market for AVANT as well.

It's probably $1 billion, the total vaccines travelers market, and it's important for AVANT because I think this could be our first entry into sales.

We believe that we could build our own sales force for the travelers market, because we would be selling to travel clinics rather than to individual doctors, and I think we could handle that with a relatively small sales force of the type you would want to start with.

I think it has another important feature.

Travelers are spending a lot of money on their trips, and so I think their willingness to spend from their own pockets for a vaccine that will preserve the integrity of the trip is quite good.

This is not a reimbursed market, so we're not having to deal with CMS.

We're talking about travelers who would be willing to pay $50 to $100 for this kind of protection.

But what they want is a vaccine that's easy to take, that can be done really at the last minute, because people don't plan very well in advance, and that will protect them against the most likely causes of diarrheal and enteric disease.

They don't have to single out particular diseases that they might get.

So if you roll that all up, I think it looks like a single-dose vaccine that's oral, that protects pretty quickly and that protects against a combination of threats.

That's why we've gone after the super combination.

Because of this fairly substantial market, it allows us also to continue to provide the vaccine for the developing world, thanks to the support of the Gates Foundation and the NIH.

But we would not be those, were it not for these important travel markets that we see here and in Europe.

Could you also give us a sense of the timeline for this and how -- you're going to be testing these individually, right?

Phase II and you're thinking Phase III, combining them?

Yes.

Let me give you a sense of that, and then I'll let Ron Ellis go into the details.

I want to stress the importance of AVANT's two platform technologies.

Platforms give you a lot of flexibility and versatility, but they also mean that each thing we do we are doing iteratively, so we get better and better at manufacturing.

But the regulatory agencies get more and more familiar with our vectors and our vaccine technology, and this allows us to do what I wouldn't call shortcuts, but allows us a very interesting development pathway, where we don't have to develop each of the vaccines all the way through to approval.

Now, I would say that Ty800, our typhoid fever vaccine, on its own would be expected to finish its Phase IIIs in the 2010/2011 scenario, in 2010.

So that one, I think, could be out by itself.

But let me have Ron Ellis explain how we will combine those vaccines based on the Vibrio vector with those based on the salmonella vectors, to come up with the rollup at the end of the day.

So Una talked about Ty800 and its progression into Phase III.

The other next key vaccine to go into the combination will be our ETEC vaccine, which is on the Vibrio platform.

So we plan later this year to start our Phase I study in ETEC.

When we go to the Phase II study with ETEC, rather than develop just ETEC by itself, we will evaluate ETEC combined with Ty800 right in the Phase II study, and then after that go to a Phase III study of ETEC combined with Ty, evaluating it for ETEC efficacy, where the Ty800 has already been proven for typhoid efficacy.

Let me just emphasize that ETEC in the Vibrio vector, of course, means that we're protecting against ETEC and cholera.

So you get a three-for-one.

Right, and the next iteration, then, will be paratyphi.

Say when we have ETEC cholera mixed with Ty, when it comes time to bring paratyphi to Phase II, we would do Phase II in combination with the other vaccines and then Phase III likewise.

So that way, each time, a new combination is hitting the market, not just an individual vaccine that has to then be redeveloped into the combination.

In addition, we anticipate that these vaccines should be readily combinable at the manufacturing level, and we also expect that they will be clinically compatible, that we will get good immune responses to both partners in the combination vaccine when we do the actual combination study itself.

So I think we have a good pathway for manufacturing purposes, clinical purposes and regulatory purposes.

My question to do with the combination -- is there a challenge in sequencing the vaccines, rather than giving them together?

What have you learned from any preclinical studies about the potency of the vaccines alone and in combination, and especially in what order?

Well, I think the answer is we have the real benefit of mucosal vaccines.

So they are given orally, and they have the entire intestinal mucosa for presentation to the immune system.

So you may be thinking of the fact that when you give combination vaccines by injection, you sometimes see interference, where you don't get as good an effect as you would have with the two vaccines independently.

We have not seen that in this case, so I would not expect any problems with the sequencing.

Ron, would you --?

No, I agree.

I think another factor is the way in which these bacteria reproduce is rather different.

Vibrio lives its life outside of cells.

The salmonella vector replicates inside cells.

So coupled with, as Una said, the large mucosal surface on the intestine, we don't see, really, any probability that the vaccines will compete with each other.

Rather, each should give a robust immune response on its own in the combination, as well, as efficiently as it would if given individually.

We're certainly exploring this preclinically, and expect to have all that data in support of our first IND for the first combination of ETEC and typhoid fever vaccine.

On the VLP technology, do you expect to see both a T-cell as well as a B-cell response to this, to the virus-like particles that you are generating with this platform?

Do you have an idea of how robust this immunity is over -- how long, how durable is it over time?

We would expect to see both T and B-cell responses.

I think we would consider that the most important response will be the antibody response, because when we are expressing flu antigens, particularly [hemoglodinum], a major protective antigen on the VLPs, the protective response is indeed an antibody response.

We would expect that we would see very vigorous immune responses, because antigens presented on the surface of VLPs -- the immune response would be very much focused on the surface of these particles.

VLPs have a very good track record of inducing such immune responses.

So I think we're fairly confident that we will see the necessary protective responses.

Thank you very much for going over the added information for us and describing further in detail the restructuring of the Company.

(OPERATOR INSTRUCTIONS).

[Dan Isaacs].

Dr.

Ryan, I've called in before.

I've been a long-term shareholder of AVANT.

I'm, of course, as all of our shareholders are, outraged at the share price of our company, and would like you to explain to us why you feel you deserve to remain as the Chairwoman of this company, let alone to receive the salary and benefits that you do, given your leadership of this company over the last several years and inability to capitalize upon our technological success.

Thank you for your question, the same as it usually is.

Well, what do you expect us to say, Dr.?

This is (multiple speakers) you have made promises to us (multiple speakers).

I think that if you would like me to answer it, I will go ahead and do that.

Well, I don't appreciate the sarcasm.

Perhaps it would be best if you called separately, and unfortunately, the other callers won't get the benefit of further explanations.

Well, I think --

So I'll make my closing remarks.

I'll remind you that this press release and conference call contain forward-looking statements that 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, and we look forward to updating you on our programs next quarter.

Thank you very much.

Ladies and gentlemen, this concludes your presentation.

You may now disconnect.

Have a great day.