West Coast Editor

The investor thrill that cutbacks last spring failed to provide for Avant Immunotherapeutics Inc. came in spades with news of the company's merger with Celldex Therapeutics Inc., and the all-stock deal creates a new firm worth about $115 million, (based on Avant's closing price Oct. 19), giving privately held Celldex about 58 percent ownership of the new company.

Avant's shares (NASDAQ:AVAN) closed Monday at 70 cents, up 15 cents, or 27.3 percent, after trading as high as 79 cents.

Keeping Avant's name and trading under its symbol, the new firm will use Celldex's antigen-presenting cell (APC)-targeting technology over time to add candidates to the pipeline, which already includes three compounds in midstage or late-stage development and six more farther back.

APC deploys a human monoclonal antibody approach technology to directly target the immune system, which fits nicely with Avant's vector vaccine delivery, manufacturing and preservation technologies.

"The prize was putting the manufacturing piece into the puzzle," said Avant CEO Una Ryan, who keeps her title with the new firm. Celldex, formed in 2003 as a wholly owned subsidiary of Princeton, N.J.-based Medarex Inc., registered to go public in 2004, but later withdrew that filing and formally spun out from Medarex in October 2005. (See BioWorld Today, April 14, 2004.)

"We wanted a merger of equals, and that's what we've managed to pull off here," Ryan told BioWorld Today, noting that to make the deal in stock was necessary because it's "really our only currency at the moment." As of June 30, the company had about $25.9 million in cash and cash equivalents.

The merger is expected to finalize in the first quarter of next year, followed by a cascade of news from the firm, including Phase IIb data on CDX-110 in glioblastoma multiforme, Phase II data on the typhoid vaccine Ty800 and Phase I results with CDX-1307, in development for colorectal, pancreatic, bladder and breast cancers.

Since Wall Street tends to like later-stage products, there's enthusiasm around CD-X110, with its FDA-cleared trial design that allows the Phase II to roll directly into Phase III, Ryan said.

On the other hand, the Street "wasn't terribly excited by just travelers' vaccines and global heath," where the Avant has been focused, she said.

"The diversified pipeline mitigates risk and gets us into areas that are larger market opportunities," Ryan said.

Also next year, Avant plans to start multiple Phase I trials for oncology, infectious and inflammatory disease treatment candidates, and kick off new therapeutic programs with monoclonal antibodies.

"My own excitement is with things that are as yet a little below the radar screen," Ryan said, referring to the APC technology, which uses antibodies to "direct the immune system, rather than as passive immunotherapy."

Along with the typhoid vaccine, the firm has CholeraGarde, a Phase II, single-dose oral vaccine for protection against cholera, plus ETEC/Cholera, entering Phase I trials in 2008 as a single-dose oral vaccine to guard against enteric disease.

CDX-1307 is a Phase 1 immunotherapy targeting the beta chain of human chorionic gonadotropin (beta hCG) for cancers, and CDX-2401 is an HIV prophylactic vaccine expected to enter Phase I trials in 2008 as part of a Bill & Melinda Gates Foundation-funded collaboration with Rockefeller University.

Avant watchers expected that news of a partnership might tickle the stock.

"This doesn't preclude that," Ryan said. "We put some of our partnering on hold while we were going through this, because we weren't sure what prospective merger partners would need. We're not really looking to get rid of anything, but we've been approached by people."

Avant also has a marketed product, Rotarix, a two-dose oral vaccine against rotavirus, in collaboration with London-based GlaxoSmithKline plc.

Rotarix, for preventing gastroenteritis caused by rotavirus in children, has been approved in more than 90 countries, including the European Union, and is under review by the FDA, with a response expected in the second half of next year. If the vaccine is launched in the U.S., Avant gets a $10 million milestone payment from Paul Royalty Fund.

GSK reported last month new study results indicating that Rotarix could be co-administered with routine infant vaccines recommended in the U.S. at the two- and four-month immunization visits, pending FDA approval. Data from a Phase III study showed that co-administration does not impair the immune responses to vaccines included in the schedule of recommended shots.

Avant earlier this year cut about a third of its work force, and backed away from biodefense contracts while halting cash flow into a pair of programs, aiming to trim costs as much as 18 percent over the next two years. (See BioWorld Today, April 17, 2007.)

In July, Nasdaq notified Avant that the firm could face delisting because its share price had fallen below $1 for 30 days in a row, and the company was given until Jan. 2, 2008, to regain compliance with the stock market's rule.