-- Avid Bioservices Records Revenues of $27 Million in the
First Quarter of FY2018 --
-- Roger Lias, Ph.D., Appointed President of Avid Bioservices as Company Continues Transition to a CDMO
Focused Business --
-- Supported by Recent Positive Data, Company is Pursuing Strategic Options for its Research and Development
Assets --
TUSTIN, Calif., Sept. 11, 2017 (GLOBE NEWSWIRE) -- Peregrine Pharmaceuticals, Inc. (NASDAQ:PPHM) (NASDAQ:PPHMP),
a biopharmaceutical company committed to improving patient lives by manufacturing high quality products for biotechnology and
pharmaceutical companies and through its proprietary R&D pipeline, today announced financial results for the first quarter of
fiscal year (FY) 2018 ended July 31, 2017, and provided an update on its contract manufacturing operations, research and
development programs, and other corporate highlights.
Highlights Since April 30, 2017
“We have been working diligently toward the transformation from an R&D focused business to a business
dedicated to a contract development and manufacturing organization or CDMO. The appointment of Roger Lias, Ph.D., as
president of our CDMO subsidiary, Avid Bioservices, and his appointment to Peregrine’s board of directors marks an important next
step in this transition. Roger is a highly experienced executive with a long track record of success in the CDMO industry,
and was an ideal candidate for the position,” stated Steven W. King, president and chief executive officer of Peregrine. “We
have built a successful commercial CDMO business with an excellent regulatory track record and we look forward to taking Avid to
the next level under Roger’s leadership. Naturally, job one will be a smooth transition to ensure we continue to support our
existing clients while simultaneously working to attract new clients as we look to grow the business on multiple fronts.”
Avid Bioservices was established as Peregrine’s internal biologics manufacturing and development group, and
began formal operations in January 2002. Avid has grown from an internal support operation to a full service CDMO that
manufactures bulk drug substance for products that are approved and marketed in over 18 countries by leading biopharma companies.
Avid was recently recognized as a leading CDMO by Life Science Leader as a recipient of multiple 2017 Contract
Manufacturing Leadership Awards for Quality, Reliability, Capabilities, Expertise and Compatibility. Avid has an outstanding
regulatory inspection history and state-of-the-art cGMP manufacturing facilities. Mr. King has been president of Avid since
its formation in addition to his role as president and CEO of Peregrine Pharmaceuticals since 2003.
Mr. King continued, “As we focus on the CDMO business, we have been evaluating the best option for divesting our
R&D assets through licensing or asset sale. The goal being to find a partner that will make a significant short term
investment in the bavituximab program in order to validate the subset analysis from the Phase III SUNRISE trial. The subset
analysis, which supports the combination of bavituximab with checkpoint inhibitors, is compelling but needs further clinical
validation. These data, combined with findings from our collaborators at Memorial Sloan Kettering Cancer Center (MSKCC) supporting
combination with cellular therapy and the ongoing trials from our partners at the National Comprehensive Cancer Network (NCCN),
have bolstered our drive to find a suitable partner for advancing the bavituximab and PS-exosome diagnostic programs. We are
moving forward expeditiously as we recognize the need to move quickly from the R&D standpoint, as well as the establishment of
a pure play CDMO with no R&D expenses. We hope to bring this process to completion over the coming months and will update
you on our progress.”
Avid Bioservices Highlights
"Avid had a strong first quarter, recognizing revenue of $27 million,” stated Paul Lytle, chief financial
officer of Peregrine. "When combined with a 57% decrease in R&D spending and a moderate decrease in SG&A, our net
loss for the quarter decreased 89% to $1.2 million. During this transition year where we have seen a lower manufacturing
demand from our top two customers, we are still expecting to generate between $50 and $55 million in revenue while we continue to
focus on securing new customers and diversifying our customer base as we have added four new customers this calendar year thus
far.”
- The company is providing manufacturing revenue guidance for the full FY 2018 of $50 million - $55 million.
- Avid's current manufacturing revenue backlog is $33 million, representing estimated future manufacturing revenue to be
recognized under committed contracts. Most of the backlog is expected to be recognized during the remainder of FY
2018.
Research and Development Highlights
ASCO Highlights:
Peregrine researchers presented additional supportive data demonstrating that patients in the bavituximab containing arm who had
low baseline PD-L1 expression on tumor cells (i.e., patients typically with poorer response to PD-1/PD-L1 checkpoint inhibitors)
lived significantly longer than patients with high baseline PD-L1 expression.
ESMO Highlights:
Clinical investigators and Peregrine researchers presented the final clinical results from the company’s Phase III SUNRISE trial of
bavituximab in patients with previously treated locally advanced or metastatic non-squamous non-small cell lung cancer.
As previously reported, study results demonstrated that the addition of bavituximab to docetaxel did not result
in improvement of the study’s primary endpoint of overall survival in the intent-to-treat population. However, a subgroup
analysis on the final dataset demonstrated that for bavituximab plus docetaxel patients who received subsequent immunotherapy, the
median overall survival was not yet reached. This compared to a median overall survival of 12.6 months for patients who received
placebo plus docetaxel, and subsequent immunotherapy [HR = 0.46; p = 0.006].
NCCN Highlights:
The three clinical trials under the collaboration with the NCCN are advancing as planned.
- Massachusetts General Hospital Cancer Center—Phase I/II Clinical Trial of Bavituximab with Radiation and Temozolomide for
Patients with Newly Diagnosed Glioblastoma. Patient dosing was initiated in September 2017.
- Moffitt Cancer Center—A Phase I Trial of Sorafenib and Bavituximab Plus Stereotactic Body Radiation Therapy for Unresectable
Hepatitis C Associated Hepatocellular Carcinoma. This trial is open for enrollment.
- The Sidney Kimmel Comprehensive Cancer Center at Johns Hopkins—Phase II Study of Pembrolizumab and Bavituximab for
Progressive Recurrent/Metastatic Squamous Cell Carcinoma of the Head and Neck. This trial is expected to be initiated by
the end of the calendar year 2017.
PS Exosome Technology Highlights:
The company continues to make progress with its PS exosome diagnostic technology that is designed to detect and monitor
cancer. The assay has been successfully optimized and we are evaluating options to license, partner, or sell this
technology.
Financial Highlights and Results
- Contract manufacturing revenue from Avid's clinical and commercial biomanufacturing services was $27,077,000 for the first
quarter of FY 2018 compared to $5,609,000 for the first quarter of FY 2017. This represents total revenue growth of
383% for FY 2018 compared to the same prior year period. It is important to note that the $27 million included the shipment of
$10 million in product, which was held over from the fourth quarter of 2017 due to delays in shipping at the customer's request.
The first quarter increase was primarily attributed to an increase in demand for contract manufacturing services associated with
process validation activities in addition to the greater number of manufacturing runs shipped during the quarter.
- Total costs and expenses for the first quarter of FY 2018 were $28,306,000, compared to $16,691,000 for the first quarter of
FY 2017. Research and development expenses decreased 57% to $3,645,000, compared to $8,569,000 for the first quarter of FY
2017.
- Cost of contract manufacturing increased to $20,448,000 in the first quarter of FY 2018 compared to $3,062,000 for the first
quarter of FY 2017. This increase is primarily due to an increase in the cost of contract manufacturing associated with
higher reported revenue. Also contributing to this increase and impacting gross margins for the period was idle capacity
due to lower demand and unavailable capacity during the installation of the new 2,000 liter bioreactors combined with a higher
percentage of revenue related to pass through charges, such as raw materials, that are recorded as revenue at cost plus a nominal
mark-up, thereby lowering the overall gross margin. During the current quarter, 38% of our revenue was related to
pass-through charges versus 20% in the same prior year quarter.
- For the first quarter of FY 2018, selling, general and administrative expenses decreased to $4,213,000 compared to $5,060,000
for FY 2017.
- Peregrine's consolidated net loss attributable to common stockholders was $2,647,000 or $0.06 per share, for the first
quarter of FY 2018, compared to a net loss attributable to common stockholders of $12,437,000, or $0.36 per share, for the same
prior year quarter.
- Peregrine reported $37,256,000 in cash and cash equivalents as of July 31, 2017, compared to $46,799,000 at fiscal year ended
April 30, 2017.
More detailed financial information and analysis may be found in Peregrine's Quarterly Report on Form 10-Q,
which will be filed with the Securities and Exchange Commission today.
Conference Call
Peregrine will host a conference call and webcast this afternoon, September 11, 2017, at 4:30 PM EDT (1:30 PM PDT).
To listen to the conference call, please dial (877) 312-5443 or (253) 237-1126 and request the Peregrine
Pharmaceuticals conference call. To listen to the live webcast, or access the archived webcast, please visit: http://ir.peregrineinc.com/events.cfm.
About Peregrine Pharmaceuticals, Inc.
Peregrine Pharmaceuticals, Inc. is a biopharmaceutical company committed to improving the lives of patients by delivering high
quality pharmaceutical products through its contract development and manufacturing organization (CDMO) services and through its
proprietary R&D pipeline. Peregrine's in-house CDMO services, including cGMP manufacturing and development capabilities,
are provided through its wholly-owned subsidiary Avid Bioservices, Inc. (www.avidbio.com), which provides development and biomanufacturing services for both Peregrine
and third-party customers. The company is also working to evaluate its lead immunotherapy candidate, bavituximab, in
combination with immune stimulating therapies for the treatment of various cancers, and developing its proprietary exosome
technology for the detection and monitoring of cancer. For more information, please visit www.peregrineinc.com.
About Avid Bioservices
Avid Bioservices provides a comprehensive range of process development, high quality cGMP clinical and commercial manufacturing
services for the biotechnology and biopharmaceutical industries. With over 15 years of experience producing monoclonal antibodies
and recombinant proteins in batch, fed-batch and perfusion modes, Avid's services include cGMP clinical and commercial product
manufacturing, purification, bulk packaging, stability testing and regulatory strategy, submission and support. The company also
provides a variety of process development activities, including cell line development and optimization, cell culture and feed
optimization, analytical methods development and product characterization. For more information about Avid, please visit www.avidbio.com.
Safe Harbor Statement: Statements in this press release which are not purely historical,
including statements regarding Peregrine Pharmaceuticals' intentions, hopes, beliefs, expectations, representations, projections,
plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk the company
will not be successful in licensing or selling bavituximab and/or any other R&D assets over the coming months, the risk that
the company will not realize any current monetary value for its research and development assets; the risk that the company will be
unable to monetize bavituximab or any other R&D assets and will need to cease further development of some or all R&D assets
due to insufficient financial resources, the risk that the company may not have or raise adequate financial resources from equity
financings and/or Avid's manufacturing operations to enable it to continue as a going concern, the risk that reductions in demand
from Avid's two significant customers due to their regulatory or other delays will not recover during the current fiscal year
resulting in idle capacity, underutilization of manufacturing facilities, and lower than anticipated revenues, the risk that the
company will need to raise additional capital during the fiscal year in order to fund Avid’s operations, the risk that the company
does not achieve profitability, the risk that Avid may experience technical difficulties in processing customer orders which could
delay delivery of products to customers, revenue recognition and receipt of payment, and the risk that one or more existing Avid
customers terminates its contract prior to completion or reduces or delays its demand for manufacturing services. The
company's actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual
results to differ materially include, but are not limited to, uncertainties associated with completing preclinical and clinical
trials for our technologies; the early stage of product development; the significant costs to develop our products as all of our
products are currently in development, preclinical studies or clinical trials; obtaining additional financing to support our
operations and the development of our products; obtaining regulatory approval for our technologies; anticipated timing of
regulatory filings and the potential success in gaining regulatory approval and complying with governmental regulations applicable
to our business. Our business could be affected by a number of other factors, including the risk factors listed from time to time
in our reports filed with the Securities and Exchange Commission including, but not limited to, our annual report on Form 10-K for
the fiscal year ended April 30, 2017 as well as any updates to these risk factors filed from time to time in the company's other
filings with the Securities and Exchange Commission. The company cautions investors not to place undue reliance on the
forward-looking statements contained in this press release. Peregrine Pharmaceuticals, Inc. disclaims any obligation, and does not
undertake to update or revise any forward-looking statements in this press release.
PEREGRINE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS (UNAUDITED)
| |
|
THREE MONTHS
ENDED
JULY 31, |
| |
|
|
2017 |
|
|
|
2016 |
|
| |
|
|
|
|
| Contract manufacturing revenue |
|
$ |
27,077,000 |
|
|
$ |
5,609,000 |
|
| |
|
|
|
|
| COSTS AND EXPENSES: |
|
|
|
|
| Cost of contract manufacturing |
|
|
20,448,000 |
|
|
|
3,062,000 |
|
| Research and development |
|
|
3,645,000 |
|
|
|
8,569,000 |
|
| Selling, general and administrative |
|
|
4,213,000 |
|
|
|
5,060,000 |
|
| Total costs and expenses |
|
|
28,306,000 |
|
|
|
16,691,000 |
|
| |
|
|
|
|
| LOSS FROM OPERATIONS |
|
|
(1,229,000 |
) |
|
|
(11,082,000 |
) |
| |
|
|
|
|
| OTHER INCOME (EXPENSE): |
|
|
|
|
| Interest and other income |
|
|
27,000 |
|
|
|
25,000 |
|
| Interest and other expense |
|
|
(3,000 |
) |
|
|
— |
|
| |
|
|
|
|
| NET LOSS |
|
$ |
(1,205,000 |
) |
|
$ |
(11,057,000 |
) |
| |
|
|
|
|
| COMPREHENSIVE LOSS |
|
$ |
(1,205,000 |
) |
|
$ |
(11,057,000 |
) |
| |
|
|
|
|
| Series E preferred stock accumulated dividends |
|
|
(1,442,000 |
) |
|
|
(1,380,000 |
) |
| |
|
|
|
|
| NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
$ |
(2,647,000 |
) |
|
$ |
(12,437,000 |
) |
| |
|
|
|
|
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
| Basic and diluted (1) |
|
|
44,773,727 |
|
|
|
34,227,870 |
|
| |
|
|
|
|
| BASIC AND DILUTED LOSS PER COMMON SHARE
(1) |
|
$ |
(0.06 |
) |
|
$ |
(0.36 |
) |
| |
|
|
|
|
| |
(1) All share and per share amounts of our common stock for all periods presented have been retroactively adjusted to
reflect the one-for-seven reverse stock split of our issued and outstanding common stock, which took effect with the opening of
trading on July 10, 2017.
PEREGRINE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| |
JULY 31,
2017 |
|
APRIL 30,
2017 |
| |
Unaudited |
|
|
| ASSETS |
|
|
|
| CURRENT ASSETS: |
|
|
|
| Cash and cash equivalents |
$ |
37,256,000 |
|
|
$ |
46,799,000 |
|
| Trade and other receivables |
|
7,884,000 |
|
|
|
7,742,000 |
|
| Inventories |
|
24,235,000 |
|
|
|
33,099,000 |
|
| Prepaid expenses |
|
1,388,000 |
|
|
|
1,460,000 |
|
| Total current assets |
|
70,763,000 |
|
|
|
89,100,000 |
|
| Property and equipment, net |
|
24,399,000 |
|
|
|
23,674,000 |
|
| Restricted cash |
|
1,150,000 |
|
|
|
1,150,000 |
|
| Other assets |
|
3,963,000 |
|
|
|
4,188,000 |
|
| TOTAL ASSETS |
$ |
100,275,000 |
|
|
$ |
118,112,000 |
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
| CURRENT LIABILITIES: |
|
|
|
| Accounts payable |
$ |
4,013,000 |
|
|
$ |
5,779,000 |
|
| Accrued clinical trial and related fees |
|
4,812,000 |
|
|
|
4,558,000 |
|
| Accrued payroll and related costs |
|
4,844,000 |
|
|
|
6,084,000 |
|
| Deferred revenue |
|
13,433,000 |
|
|
|
28,500,000 |
|
| Customer deposits |
|
14,322,000 |
|
|
|
17,017,000 |
|
| Other current liabilities |
|
963,000 |
|
|
|
993,000 |
|
| Total current liabilities |
|
42,387,000 |
|
|
|
62,931,000 |
|
| |
|
|
|
| Deferred rent, less current portion |
|
1,880,000 |
|
|
|
1,599,000 |
|
| |
|
|
|
| Commitments and contingencies |
|
|
|
| |
|
|
|
| STOCKHOLDERS' EQUITY (1): |
|
|
|
| Preferred stock—$0.001 par value; authorized 5,000,000 shares;
1,647,760 issued and outstanding at July 31, 2017 and April 30, 2017, respectively |
|
2,000 |
|
|
|
2,000 |
|
| Common stock—$0.001 par value; authorized 500,000,000 shares;
45,094,154 and 44,014,040 issued and outstanding at July 31, 2017 and April 30, 2017, respectively |
|
45,000 |
|
|
|
44,000 |
|
| Additional paid-in capital |
|
594,482,000 |
|
|
|
590,971,000 |
|
| Accumulated deficit |
|
(538,521,000 |
) |
|
|
(537,435,000 |
) |
| Total stockholders’ equity |
|
56,008,000 |
|
|
|
53,582,000 |
|
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
100,275,000 |
|
|
$ |
118,112,000 |
|
| |
(1) All share and per share amounts of our common stock for all periods presented have been
retroactively adjusted to reflect the one-for-seven reverse stock split of our issued and outstanding common stock, which took
effect with the opening of trading on July 10, 2017.
Contacts: Stephanie Diaz (Investors) Vida Strategic Partners 415-675-7401 sdiaz@vidasp.com Tim Brons (Media) Vida Strategic Partners 415-675-7402 tbrons@vidasp.com
