Vaccine and drug developer Avant Immunotherapeutics Inc. doubled its reserves after raising about $25 million in gross proceeds through a private equity sale.
The Needham, Mass.-based company said it received commitments from investors to buy more than 8.9 million common shares at $2.75 apiece, a discount to their $3.01 close a day earlier. On Friday, the stock (NASDAQ:AVAN) traded down 18 cents to close at $2.83.
The shares were sold directly under a shelf registration statement filed in November.
"There are always people who will offer you a quick deal that's good for the investors," said Avant President and CEO Una Ryan, noting that she stayed away from equity placements that included warrants. "I think this one will be good for the investors and good for the company. We really held the line and are quite pleased."
The company said the financing provides sufficient resources to fund clinical development programs and for general working capital needs, plus it offers flexibility to pursue licensing and acquisition opportunities. The added funds expand Avant's cash balance so that it now exceeds currently anticipated requirements for the next two years. The company closed the quarter ended Sept. 30 with $23.5 million in cash and cash equivalents and 64.7 million shares outstanding. It burned $2.1 million in the third quarter.
Ryan said the transaction could mark the final financing for the company as it anticipates revenue from Rotarix sales, potential partnership revenues and additional biodefense contracts. Avant also could use a portion of the funds to complete its manufacturing facility in Fall River, Mass.
"Investors like that kind of a story," she said, adding that the new backers represent a quality institutional base. "I think they really like that we have such a strong pipeline. Avant has a very broad, deep and well-spaced pipeline."
It includes one product in Phase III, three in Phase II and a pair of Phase I candidates in development.
"I think 2004 is going to be a big year for Avant," Ryan added, making note of London-based partner GlaxoSmithKline plc's plan to launch Rotarix, an oral vaccine for rotavirus, later this year in Mexico. A 60,000-patient Phase III study of the product in Latin America and Southeast Asia is expected to conclude later this year as well. The company also has two food-safety vaccines approved.
"Another exciting event for 2004 will center on our TP10 program," she said. "A complement inhibitor, it showed an extraordinary benefit to males in a Phase II study that we had done a couple of years ago."
The company plans to begin a similar study of the cardiac surgery candidate in women, and should it prove successful, Avant would move the product into a single Phase III study for registration. TP10 is designed to reduce complement-mediated tissue damage associated with cardiac bypass surgery.
Deeper in the pipeline sits a vaccine for cholesterol management. Through acquisitions, Avant also has a technology platform that enables the creation of rapid-protecting, single-dose, oral vaccines that remain stable without refrigeration. The company is developing applications of its vaccine technology for biodefense, travelers' vaccines, global health needs and human food safety.