By Kim Coghill
Avant Immunotherapeutics Inc. said it has entered into a definitive agreement to purchase Megan Health Inc., a privately held vaccine company. The acquisition, combined with Avant's new partnership with Pfizer Inc. for the expanded development of Megan's animal health and food safety vaccines, means Avant will greatly expand its product portfolio in the travelers' vaccine market.
Under terms of the agreement to purchase St. Louis-based Megan, Avant will issue 1.9 million shares to Megan's current shareholders in a transaction valued at about $18 million. Upon completion of the deal, Needham, Mass.-based Avant will have 57 million shares outstanding.
Megan, which will become a wholly owned subsidiary of Avant, has technologies for developing vaccines against Campylobacter and E. coli, both causes of diarrheal diseases worldwide. Those technologies will be added to Avant's current research into vaccines for cholera, typhoid and Shigella sonnei. Avant also will gain ownership to Megan's only product on the market, Megan Vac 1, a vaccine against Salmonella typhimurium in chickens.
"We believe that Avant is now pre-eminent in the field of single-dose, oral travelers' vaccines that are safe and effective," said Una Ryan, president and CEO of Avant.
But the acquisition does not mean that research into animal vaccines will end.
"Although vaccines for treating animals is not our business, it is clear that development of vaccines for animals and humans could progress along a parallel path," Ryan said. "We will keep our focus on human vaccines, but through the Pfizer deal, we will be able to develop products for the animal health and food safety market."
New York City-based Pfizer, a research-based health care company, has agreed to pay an up-front license fee of $2.5 million and a $3 million equity investment in Avant. Ryan said although milestones and royalties are part of the deal, the companies agreed not to discuss them.
The separately reported funding from Pfizer, coupled with Megan's existing cash resources, is expected to fund Megan's programs for more than two years.
"This is self-funding and cash-positive and it will in no way affect the time lines of other Avant programs," Ryan said. "This is a very focused acquisition in an area where we are building considerable strength. This really rounds out our portfolio and puts us into a unique position."
Avant raised $36.5 million in a July private placement of 4.65 million shares of common stock with institutional investors. The majority of the funds raised were used to further clinical development of TP10, which is designed to halt the inappropriate activation of the complement cascade following cardiac surgery (see BioWorld Today, July 18, 2000). Ryan said that by the end of the year, TP10 should enter Phase IIb trials in pediatric cardiac surgery and Phase II trials for adults in cardiac surgery.
In late October, Avant initiated Phase IIb studies of its cholera vaccine candidate, Peru-15, to evaluate safety, immunogenicity and the protective capacity of the vaccine against a challenge of live virulent cholera.
Avant has completed Phase I/II safety and immunogenicity studies of its typhoid vaccine, Ty800. The Shigella sonnei vaccine, aimed at the shigella strain most often contracted by travelers, is in preclinical development.
Avant's stock (NASDAQ:AVAN) closed up $1.93 Monday at $9.343.