Celldex Therapeutics Inc (CLDX) 2007 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the second quarter 2007 Avant Immunotherapeutics, Incorporated, earnings conference call.

My name is Nicole, and I will be your coordinator for today.

At this time all participants are in a listen-only mode.

We will be facilitating a question-and-answer session towards the end of this conference.

(Operator Instructions) I would now like to turn the call over to Dr.

Una Ryan, CEO.

Please proceed.

Thank you.

Good morning, ladies and gentlemen, I am Una Ryan, president and CEO of Avant Immunotherapeutics, Inc.

With me on this call is Chip Catlin, AVANT's Chief Financial Officer, and Tim Cooke, our Chief Operating Officer.

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

I want to remind you that statements made by AVANT during the call, which are not historical facts, 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 this call, Chip will review AVANT's second quarter and six-month 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, ladies and gentlemen.

We announced in our press release today financial results for AVANT's second quarter and first six-month period of fiscal year 2007.

The press release is filed as an exhibit for 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 June 30, 2007, we reported a net loss of $5.5 million, or $0.07 per share compared to a net loss of $5.7 million, or $0.08 per share for the comparable three months of 2006.

For the six months ending June 30, 2007, AVANT reported a net loss of $11.1 million, or $0.15 per share compared to a net loss of $8.6 million, or $0.12 per share for the six months ended June 30, 2006.

The 2007 three- and six-month losses included one-time restructuring charges of approximately $724,000.

At March 31, 2007 -- sorry -- at June 30, 2007, our cash balance was $25.9 million.

In April we announced a restructuring of our company to reduce ongoing operating 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, thereby extending our financial resources.

Now for an update on the clinical program and just to remind you, our core business is the development of next-generation vaccines for a variety of needs including travelers, double 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.

This year we've made significant progress in the clinical development of our single-dose oral typhoid fever vaccine called TY800.

In May 2007, AVANT announced preliminary results from the NIAID-sponsored double-blind, placebo-controlled, Phase I/II inpatient study, dose-escalation clinical trial of TY800.

The NIAID researchers found the single-dose oral vaccine to be well tolerated an immunogenic with over 90% of vaccinated subjects generating immune responses.

Earlier this week AVANT announced the initiation of a company-sponsored, double-blind, placebo-controlled, Phase II, dose-ranging trial of TY800 in 180 subjects at five clinical sites across the United States.

Results from this trial are expected in the second quarter of 2008.

CholeraGarde, our single-dose oral vaccine against cholera is supported by the International Vaccine Institute, which plans to begin Phase II field studies with CholeraGarde in India and Bangladesh beginning around year-end 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.

In the second half of 2007, AVANT expects to initiate a Phase I/II trial of its ETEC cholera vaccine candidate.

AVANT's long-term goal is to develop a combination vaccine as a super enteric vaccine to address the travelers' market that will protect against ETEC, cholera, typhoid, and paratyphoid fevers.

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

We announced a two-year research and development partnership with Select Vaccines, Limited, focused on the use of Select Vaccine's 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.

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

(Operator Instructions) Mark Monane, Needham.

It's actually Alan Carr for Mark today.

Very good to hear from you, Alan.

Thanks.

So I have a few questions, one of them is related to the Rotarix GSK just filed for regulatory approval in the U.S., I guess, in the second quarter.

So if you add 10 months onto that, I guess we can expect some feedback in first half in '08.

Have you gotten any guidance from them, and if is positive when they might be able to launch it in the U.S.?

Now, but I think they're sort of wise not to predict the FDA, as that never is very satisfactory a strategy.

We believe that their record over the years has been 12 or 15 months, so I think you're absolutely correct, but we would hope that they would launch in '08.

And just to remind you, that would trigger a $10 million milestone to us from Paul Royalty Fund.

However, if they were not to launch until '09, we would receive $9 million instead.

Just one more piece of information -- GSK was not too anxious for us to announce that filing because, in fact, they're filing is for a lyophilized version, and they expect that ultimately they will market a liquid version in the United States, and they didn't want to anticipate sales incorrectly.

They didn't want there to be unrealistic expectations.

However, it's very material to us, whichever form launches first, obviously.

So when I say I hope they will launch -- that you are correct for the '08 date, I'm talking about the lyo version that they've already filed.

Will they need to file another application, a supplemental for the --?

Yes.

And then start another clock, I take it, then?

Yes.

Have they mentioned any plans on with you -- have they discussed with you guys when they think they might file the second one?

I think in one or two quarters.

Okay, and also getting back to the enteric vaccine, the superenteric vaccine, can you go over the development and regulatory path for that and how the schedule looks right now towards getting -- I think you're going to add four different vaccines to that.

Can you give us an update on that?

Yes, I wish we could put a picture up on the screen here for our listeners -- of course, the first very good piece of news is that we did start our Phase II for typhoid fever earlier this week.

We are very pleased about that, and we will roll the vaccines out one at a time, but we will not take them all the way through to Phase III and approval and then mix them together.

We have what we believe is a very efficient method for combining them and getting the benefits of the market along the way.

However, we have Tim Cooke, our COO, here, and he is the mastermind of much of this strategy, so, Tim, why don't you just quickly roll out what you think the regulatory plan is?

Sure, and let me say I'm not so much a mastermind as doing the market research among key opinion leaders and travel clinics in the U.S.

and internationally.

They've been very enthusiastic about the concept of broader protection in a single dose, so it's pretty classic marketing research that has led to this strategy.

From the clinical and regulatory development point of view, obviously, we are in Phase II now with one of the elements of that super combination, TY800, typhoid fever vaccine.

We are going to add to that our ETEC and cholera vaccine to make a superenteric vaccine protecting against typhoid, ETEC, which is enterotoxigenic E.

coli, the biggest cause of travelers' diarrhea and cholera in a single dose.

What we intend to do is enter the clinic this year with our ETEC/cholera combination vaccine.

We are preparing to file the IND, and we will enter a Phase I/II study.

Upon successful completion of that study, we intend to design a Phase II that would proceed along with the ETEC and cholera combination but in a separate arm look at the co-administration of the typhoid fever vaccine, TY800, with our ETEC/cholera so that we would establish if there is any modification we need to the doses of the components to give protection against that three-component super combination.

We then intend to go into Phase III with our dose defined and have the Phase III performed on the typhoid ETEC/cholera vaccine, and actually we don't intend, at this time, to launch the ETEC/cholera vaccine by itself.

So we're basically going to combine it in Phase II where we feel we will gain value out of the combination and do a single Phase III instead of a Phase III separately on ETEC/cholera.

Obviously, there's a lot of discussion still to go on with the FDA over that strategy but that's what it is.

Okay, so we've got a Phase I/II with ETEC starting at the end of the year, followed by a Phase II while you explore a combination of the three, and then move on to a Phase III after working out dose and that sort of thing and confirm.

Is that right?

That's right.

And then you don't need -- with cholera, you have all the clinical data that you need to move forward with the Phase II into 2008, is that right?

Or do you need to rely on any data from the IVI trials?

Well, the IVI trials are targeted for a developing country use only.

So they are not on the critical path to any of our travelers vaccine development.

Okay.

But will you need to do anymore cholera -- individual CholeraGarde trials?

No, not the travelers' indication.

Okay, that's clear, then.

One last question, if I can?

Yes.

The virosomal program -- what state are you at right now with the -- I think you said flu -- seasonal flu and pandemic flu -- when do you think you'll move into the clinic with that?

Well, right now, much of the work is in the hands of our partners, Select Vaccines, in Australia.

Just to remind you, our first target will be pandemic flu.

The job in hand for this year is to get stable cell lines.

We're going to try to do that for the VLPs, the virus-like particles, in both mammalian cells and in yeast, and I talked to them yesterday, and it seems to be progressing very well.

Bob [Peesbonnan] with IAS.

The stock price that we've been following has been decreasing at a rapid rate.

Do you have any concerns with the price of the stock?

Well, first of all, we, the management and the board of directors of AVANT, take our stock price and our shareholder value very seriously.

We think the current stock price is the result of a realignment of expectations associated with our reorganization and reprioritization of programs combined with the uncertainty over the GSK royalty numbers on Rotarix.

But our number-one goal over the next several months is to build shareholder value to maintain our NASDAQ listing, and the sorts of activities we are undertaking include continued outreach to institutional investors with a new story, and I think I mentioned previously, who have embraced our new focus as positive, and we want to meet or exceed the milestones on the advancement of our vaccine franchise pipeline, and we did do that with the ahead-of-schedule start of our TY800 trials.

We are also evaluating multiple opportunities to in-license new programs.

And just a follow-up -- any update on the royalty rate dispute with GSK?

I recognize that that's going slowly, but just to remind everyone, there are a very large number of parties involved and a very large number of jurisdictions involved here.

I've said in the past we want to keep all of our options open, and it certainly makes sense for us to continue our discussions even if it's slow with GSK rather than doing anything more drastic.

I think that the biggest impact for this will not come until we launch in the U.S., but we are continuing.

We have very strong legal advisers for all parts of the world, so we are moving forward.

But I recognize that it's a little frustrating that you can't see the progress yet.

But we are moving with that.

I show no further questions at this time.

I'd like to turn the call back over to Dr.

Ryan.

All right, thank you all for participating on today's call.

If you have additional questions, please feel free to call me or Chip directly.

I'd remind you again that this press release and conference call contain forward-looking statements, which 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.

So we'll look forward to updating you on our programs next quarter.

Thank you.

Thank you for your participation in today's conference.

This concludes the presentation, and you may now disconnect.

Good day.