Associate

Una Ryan, president and CEO of Avant Therapeutics Inc., wants more control. To get it, her company is raising $10 million through an opening U.S. biotech window and doing so in a way she prefers.

"Basically, we were not in any sort of desperate straits, but it's a guiding principle that when the window opens you go through it," she told BioWorld Today. "We took advantage of the fact that the U.S. markets are looking friendlier."

The company entered a definitive agreement with an unnamed new institutional investor to privately place about 4.4 million shares of stock at $2.25 per share. It also will issue warrants for 444,444 shares exercisable at $3 per share. If exercised, they would bring in another $1.3 million. Rodman & Renshaw Inc., of New York, acted as placement agent for the offering.

Avant's stock (NASDAQ:AVAN) fell 14 cents Tuesday to close at $2.75. After the placement, the company has about 65 million shares outstanding. The lowered selling price, Ryan said, was because "we decided to sell unregistered stock and you always give that at some discount, and we felt this was a respectable one."

The past few weeks have seen a spate of biotechnology convertible notes or debenture offerings, driven by favorable rates and a rising market. Ryan, however, who said she was "$10 million happier" Tuesday than she was Monday, favors financing like the one her company just announced, saying, "Convertible debentures is not [a financing] we want to do at this time."

Why?

"I want to maintain control of this company," she said. "You've seen some good companies with good management get into a lot of trouble where convertibles caused them to be delisted. Or where preferred shareholders could come in and wreak havoc. That's a game for good times. We've been more conservative here."

Besides being opportunistic and in a vessel Ryan likes, the funding should help Avant, of Needham, Mass., stand on its own a bit more. She said the company is ready "to take manufacturing more under our own control and clinical trials more under our own control." By Ryan's own admission, the company has "been extraordinarily clever in tough times" at financing its trials, with help from Small Business Innovation Research grants and National Institutes of Health sponsorship, but she said deals like that usually cost the company something.

"We never gave up anything our investors needed, but what we did give up was the control of our timelines," she told BioWorld Today.

Avant should be able to pay for more itself now. At the end of the first quarter, the company had about $20 million in cash. Ryan said it is burning through about $1 million a month, so add $10 million and Avant has more than two years of cash.

The biggest event on Avant's horizon is the planned initiation of Phase III trials of its rotavirus infection vaccine, partnered with GlaxoSmithKline plc, of London. The companies anticipate 75,000 patients participating in the trial, and Ryan said GSK is estimating a product launch in 2005.

Data from a Phase II trial of its cholesterol management product, CETi-1, are expected in the fourth quarter. The clinical portion of its injectable anthrax vaccine is expected to finish this year, Ryan said, as is the dosing portion of Avant's cholera trial being conducted in Bangladesh. It also has Ty800, a typhoid fever vaccine, in clinical development, and several other products in preclinical development. It has a subcontract granted to it by DynPort Vaccine Co. LLC, of Frederick, Md., to develop for the U.S. Department of Defense an oral combination vaccine against anthrax and plague.

"We think the big biodefense subcontract is very important to the company, because it's important funding," Ryan said. "It's still preclinical, but we expect to meet all our milestones with the military there."

That subcontract was signed in January and is worth up to $8 million to Avant, helping to kick off a 2003 that's been filling with good tidings. (See BioWorld Today, Jan. 23, 2003.)

"So far, this has been a good year for the industry and I believe a good year for Avant," Ryan said. "Last year was not a good year for Avant. So, we're kind of feeling bullish."