News Release

Project BioShield: Consistent financing, markets, indemnity for biodefense vaccine developers needed

AVANT CEO Una Ryan testifies before Congress

Business Announcement

Kureczka/Martin Associates

WASHINGTON, DC (April 4, 2003): Biotechnology companies are well suited to address the modest commercial opportunities offered by creating safer, more effective and less costly vaccines for biodefense. However, the ultimate effectiveness of Project BioShield -- aimed at supporting such product development – depends on its ability to provide consistent and well-coordinated, long-term financing and sufficient, ensured markets, as well as a degree of protection from liability for vaccine developers. Dr. Una Ryan, Ph.D., president and chief executive officer of AVANT Immunotherapeutics (Nasdaq: AVAN), based in Needham, Massachusetts and Overland, Missouri, testified today before the House Government Reform Committee on industry concerns that the ultimate shaping of Project BioShield meets the needs and requirements of both the federal government and industry in order to achieve maximum success.

"AVANT has advanced vaccine technology that is already being employed in the clinical development of a next-generation injectable anthrax vaccine, as well as preclinical work on oral biodefense vaccines against anthrax and plague," said Dr. Ryan. AVANT's injectable anthrax vaccine, which entered human clinical testing in October 2002, as well as a single-dose oral vaccine combining protection against both anthrax and plague are under development in collaboration with Department of Defense (DoD) prime contractor, DynPort Vaccine Company (DVC). "We have received initial support for these vaccines through three separate funding agreements from the National Institutes of Health (NIH) and the DoD, through its Joint Vaccines Acquisition Program. However, we and other small companies cannot fully commit ourselves to the development and supply of biodefense vaccines unless doing so also makes long-term business sense for our firms and their shareholders." Dr. Ryan testified that she and other biotechnology industry executives had several issues of concern related to the shaping of Project BioShield that would affect its ability to attract biotechnology companies to participate.

Need for a Long-term, Sizeable Government Commitment

Dr. Ryan said that her primary concern revolved around whether the BioShield initiative and corresponding efforts at the DoD represent a long-term government commitment of sufficient size to make the venture worthwhile for companies. She noted that the market created by BioShield must be large enough to convince biotechnology companies that they have a partner who understands the high cost, complexity, and significant risk of developing therapeutics and bringing them to market. "Biotechnology companies need to see a federal program of sufficient size to convince them that their efforts can be funded through to product commercialization and that the risk that they ensure and the success they achieve will be fairly compensated," she said.

She further voiced the need for a long-term commitment of such funding, to ensure adequate resources over the many years it can take to develop biomedical countermeasures against difficult disease agents. "I believe the government understands that meeting the biological weapons threat is of similar importance to the nuclear threat in many respects. The Strategic Defense Initiative, which celebrated its 20th anniversary last month, launched a missile defense program whose funding has not dropped below $3 billion dollars annually over two decades. That kind of long-range commitment will convince companies that the government is a serious partner in this undertaking," Dr. Ryan said. She commented that while work on vaccines against anthrax and plague was proceeding rapidly, other less well understood agents, such as viral pathogens and hemorrhagic fevers like Ebola, could pose significantly more difficult problems for vaccine developers, making long-term research and development funding crucial.

Consistent, Coordinated and Transparent Policy

"Transparency and consistency in BioShield policy – as well as the careful coordination of efforts between the NIH, DoD, and Department of Homeland Security (DHS) – will also be important for attracting industry participation," Dr. Ryan added. "The biotechnology industry understands that acquisition priorities must vary in response to evolving threats and technological advances. To the extent attainable, however, acquisition priorities that remain consistent from year to year will boost industry confidence that we have a reliable government partner."

She noted that the crucial role of product acquisition would be played by the Department of Homeland Security, and that the industry would be watching closely to see that DHS is given the authority and funding it will need to effectively fill this crucial role.

Liability Protections Also Needed

"Finally, after an adequate and reliable market, our industry's great concern revolves around indemnification," said Dr. Ryan. "A biotechnology company like AVANT cannot afford to risk their stockholders' investments and employees' livelihoods by venturing unprotected into the biodefense realm where large portions of the population will be inoculated in a program of administration over which we have little or no control." She noted that there are many examples of product liability protection extended to companies that supply much needed but potentially risky vaccines, most recently the protection offered by the Homeland Security Act to manufacturers of the smallpox vaccine.

"Unless companies are protected to a fair and reasonable degree from the risk of lawsuits that could put them out of business just by their existence, rather than their merit, the biotechnology industry will be unable to participate in this national effort," Dr. Ryan said.

About AVANT Immunotherapeutics

AVANT Immunotherapeutics is engaged in the discovery, development and commercialization of products that harness the human immune system to prevent and treat disease. The company is developing a broad portfolio of vaccines addressing a wide range of applications including bacterial and viral diseases, chronic human disease, biodefense and food safety. These include single-dose, oral vaccines that protect against important disease-causing agents and a novel, proprietary vaccine candidate for cholesterol management. AVANT's goal is to demonstrate proof-of-concept for its products before leveraging their value through partnerships. Current collaborations encompass the development of an oral human rotavirus vaccine, vaccines to combat threats of biological warfare, and vaccines addressed to human food safety and animal health.

AVANT is currently engaged in three separate programs with public funding support aimed at the development of biodefense vaccines:

  • A next-generation injectable vaccine against anthrax, now in Phase I clinical development under the direction of DynPort Vaccine Company, with funding from the DoD under the Joint Vaccine Acquisition Program (JVAP);
  • An oral anthrax vaccine currently in preclinical development at AVANT, with support from a Small Business Innovation Research (SBIR) grant from the National Institute of Allergy and Infectious Diseases (NIAID) of the National Institutes of Health; and
  • An oral, combination anthrax-plague vaccine currently in preclinical development at AVANT under subcontract to prime contractor DVC, with funding through JVAP and the DoD.

Additional information on AVANT Immunotherapeutics, Inc. can be obtained through our site on the World Wide Web: http://www.avantimmune.com.

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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements which reflect AVANT's current views with respect to future events and financial performance. These forward-looking statements are based on management's beliefs and assumptions and information currently available. The words "believe", "expect", "anticipate", "intend", "estimate", "project" and similar expressions which do not relate solely to historical matters identify forward-looking statements. Investors should be cautious in relying on forward-looking statements because they 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. These factors include, but are not limited to: (1) the integration of the UPT technology and programs; (2) the ability to adapt AVANT's vectoring systems to develop new, safe and effective orally administered vaccines against anthrax and plague or any other microbes used as bioweapons; (3) the ability to successfully complete development and commercialization of CholeraGardeTM (Peru-15), Ty800 and of other products; (4) the cost, timing, scope and results of ongoing safety and efficacy trials of CholeraGardeTM (Peru-15), Ty800 and other preclinical and clinical testing; (5) the ability to successfully complete product research and further development, including animal, pre-clinical and clinical studies of CholeraGardeTM (Peru-15), Ty800 and other products; (6) the ability of the Company to manage multiple late stage clinical trials for a variety of product candidates; (7) the volume and profitability of product sales of Megan®Vac 1 and other future products; (8) changes in existing and potential relationships with corporate collaborators; (9) the cost, delivery and quality of clinical and commercial grade materials supplied by contract manufacturers (10) the timing, cost and uncertainty of obtaining regulatory approvals to use CholeraGardeTM (Peru-15) and Ty800, among other purposes, to protect travelers and people in endemic regions from diarrhea causing diseases and for other products; (11) the ability to obtain substantial additional funding; (12) the ability to develop and commercialize products before competitors; (13) the ability to retain certain members of management; and (14) other factors detailed from time to time in filings with the Securities and Exchange Commission. We expressly disclaim any responsibility to update forward-looking statements.

Contacts:

Una Ryan
AVANT Immunotherapeutics
(781) 433-0771

Joan Kureczka
Kureczka-Martin Associates
(415) 821-2413


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