--
Avid Bioservices Records Revenues of $27 Million in the First
Quarter of FY2018 --
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 CallPeregrine 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 BioservicesAvid
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
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