-- Avid Posts Record Revenue of $23.4 Million
During Second Quarter FY 2017 with Contracted Backlog of Future
Business Currently at $73 Million --
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 advancing its proprietary R&D
pipeline, today announced financial results for the second quarter
of fiscal year (FY) 2017 ended October 31, 2016, and provided an
update on its contract manufacturing business, clinical pipeline
and other corporate developments.
Highlights Since July 31,
2016"The Avid business is on track to continue its revenue
growth this fiscal year as we move toward overall profitability
within the next 18 months. Our two facilities have the
potential to generate in excess of $80 million in revenue, leaving
additional capacity for revenue growth beyond fiscal year 2017
revenue guidance,” stated Steven W. King, president and chief
executive officer of Peregrine. "We are moving forward with
our plans to construct a third manufacturing facility, with an eye
toward efficiencies that will reduce the overall cost of
construction and operation. While this may delay the new
facility launch until later in calendar year 2017, we currently
have adequate existing capacity to continue meeting the needs of
our current clients while also bringing in new customers so we do
not expect it to impact our near-term ability to grow top-line
revenue as originally planned. Independently, Avid is a
successful and growing CDMO business generating significant revenue
and one of our key goals going forward is to help ensure that its
value is appropriately represented in the market cap of our overall
business.”
Mr. King continued, "During, and subsequent to,
the second quarter, we announced a series of important findings,
all of which will contribute to our future development of
bavituximab. Our ongoing analysis of the Phase III SUNRISE
data has revealed a promising biomarker that may give us insight
into key patient populations. We are actively evaluating additional
potential biomarkers and we hope to identify a profile for patients
who will receive therapeutic benefit from treatment with
bavituximab. Concurrent with our internal clinical work, our
collaborators at NCCN are in the process of initiating trials for
three new bavituximab combination treatments, which we expect to
begin enrolling patients in the coming months. What is exciting is
that the NCCN studies will help build on developments we are seeing
from our internal scientists, as well as our collaborators at Duke,
Rutgers and Memorial Sloan Kettering Cancer Center. Together,
we presented compelling data supporting our long-standing belief
that bavituximab significantly impacts the tumor microenvironment,
creating a more immune active environment in which other therapies,
including checkpoint inhibitors, are able to have a greater
anti-tumor effect. These findings are highly validating and
we look forward to continuing our work with these world-class
institutions to help guide clinical development.”
Avid Bioservices
Highlights"Growing top-line revenue is a key focus and we
are pleased to report a 53% improvement in contract manufacturing
revenue for the current six-month period compared to the same
period last fiscal year. In addition, our revenue guidance for the
second quarter was targeted to exceed $20 million and we achieved
$23.4 million in contract manufacturing revenue as we worked
closely with the third-party testing laboratory to resolve the
unexpected delays in testing we encountered during the first
quarter. As a result, we reaffirm our manufacturing revenue
guidance of between $50 and $55 million for the full fiscal year,”
stated Paul Lytle, chief financial officer of Peregrine. “We
also continued to advance the validation of three separate
manufacturing processes related to third-party customer products
that could lead to future commercial manufacturing for these
products. While these activities generally have a higher cost of
manufacturing, which impacted our gross margin during the second
quarter, we believe our investment in these products will provide
us future revenue opportunities once these products are
approved.”
- The company reaffirms its manufacturing revenue guidance for
the full FY 2017 of $50 - $55 million.
- Avid's current manufacturing revenue backlog is $73 million,
representing estimated future manufacturing revenue to be
recognized under committed contracts. This backlog mostly
covers revenue to be recognized during the remainder of fiscal year
2017 and fiscal year 2018.
Clinical Development
Highlights
- Through the ongoing analysis of the Phase III SUNRISE data,
Peregrine scientists identified a correlation between overall
survival and pre-treatment levels of the biomarker, beta-2
glycoprotein-1 (β2GP1), which we presented at ESMO in
October.
- Data demonstrated that patients with pre-treatment β2GP1 levels
between 200 and 240 µg/mL - representing approximately 30% of
randomized patients - achieved a statistically significant,
5.5-month improvement, from 7.7 months to 13.2 months, in median
overall survival as compared to patients in the control group with
the same range of β2GP1 levels.
- Peregrine's research collaboration with NCCN is advancing as
planned, with grants awarded to three investigators to support
research of bavituximab in combination with other therapeutics for
the following studies:
- Phase I Trial of Sorafenib and Bavituximab Plus Stereotactic
Body Radiation Therapy (SBRT) for Unresectable Hepatitis C
Associated Hepatocellular Carcinoma
- Phase I/II Clinical Trial of Bavituximab with Radiation and
Temozolomide for Patients with Newly Diagnosed
Glioblastoma
- Phase II Study of Pembrolizumab and Bavituximab for Progressive
Recurrent/Metastatic Squamous Cell Carcinoma of the Head and
Neck
The company expects these trials to begin over
the coming
months. Research
Highlights
- Peregrine scientists and collaborators from Duke University
Medical Center, Rutgers University College of Medicine, and
Memorial Sloan Kettering Cancer Center each presented compelling
data demonstrating that shifts in the tumor microenvironment from
immune suppressed to immune active occurred when a bavituximab
equivalent antibody was administered as part of a combination
treatment regimen. Presentations addressed multiple
phosphatidylserine (PS)-targeting combinations, including those
with checkpoint inhibitors such as anti-PD-1, anti-PD-L1 and
anti-LAG3, as well as with radiation or chemotherapy. These
data suggest that the addition of PS-targeting reverses an
immunosuppressive tumor environment, creating an immune active
tumor microenvironment that can potentially convert patients that
generally do not respond to immuno-oncology (I-O) therapies into
responders. Key presentations were made at the Second International
Cancer Immunotherapy Conference in September, the American
Association for Cancer Research’s Tumor Immunology and
Immunotherapy Conference in October, the Society for Immunotherapy
of Cancer (SITC) in November, and the San Antonio Breast Cancer
Symposium in December.
Financial Highlights and
Results
- Peregrine continues to execute its previously-announced
strategy to reach sustained profitability by increasing contract
manufacturing revenue while decreasing research and development
expenses, with the goal of reaching profitability 18 months from
now. During the first six months of FY 2017, the company made
significant progress toward this goal with contract manufacturing
revenues increasing 53% compared to the first six months of FY 2016
and research and development expenses decreasing by 45% compared to
the first six months of FY 2016.
- Contract manufacturing revenue from Avid's clinical and
commercial biomanufacturing services provided to its third-party
customers increased to $23,370,000 for the second quarter of FY
2017 compared to $9,523,000 for the second quarter of FY
2016. In addition, as previously-announced, a backlog at a
third-party testing lab, unrelated to product quality, required
that the recognition of some revenue be shifted from the first
quarter to the second quarter of fiscal year 2017.
- Total costs and expenses for the second quarter of FY 2017 were
$27,447,000, compared to $23,347,000 for the second quarter of FY
2016. For the second quarter of FY 2017, research and
development expenses decreased 51% to $7,022,000, compared to
$14,190,000 for the second quarter of FY 2016. Cost of contract
manufacturing increased to $15,441,000 in the second quarter of FY
2017 compared to $4,741,000 for the second quarter of FY 2016,
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 is the
higher cost of operating the new Myford facility as well as the
higher cost associated with performing process validation runs
during the quarter. For the second quarter of FY 2017,
selling, general and administrative expenses increased to
$4,984,000 compared to $4,416,000 for the second quarter of FY 2016
primarily due to the company’s growing manufacturing business.
- Peregrine's consolidated net loss attributable to common
stockholders was $5,498,000 or $0.02 per share, for the second
quarter of FY 2017, compared to a net loss attributable to common
stockholders of $14,578,000, or $0.07 per share, for the same prior
year quarter.
- Peregrine reported $49,055,000 in cash and cash equivalents as
of October 31, 2016, compared to $61,412,000 at fiscal year ended
April 30, 2016.
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, December 12,
2016, at 4:30 PM ET (1:30 PM PT).
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 advancing and licensing its investigational immunotherapy
and related products. 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 that the
biomarker data does not support the development of a specific
profile for patients who will receive therapeutic benefit from
treatment with bavituximab, the risk that one or more of the NCCN
grant funded investigator-initiated clinical studies may experience
initiation and/or enrollment delays, the risk that data from one or
more of the NCCN grant funded investigator-initiated clinical
studies does not support further evaluation, the risk that the
results from the pre-clinical studies is not replicated in human
clinical trials, the risk that the company may not have or raise
adequate financial resources from debt and/or equity financings
and/or Avid's manufacturing operations to fund the further
development of bavituximab, the risk that Avid's revenue growth may
slow or decline, the risk that the company does not achieve
profitability in 18 months, the risk that Avid may experience
technical difficulties in processing customer orders, including
delays in third party release testing, which could delay delivery
of products to customers, revenue recognition and receipt of
payment, the risk that one or more existing Avid customers
terminates its contract prior to completion or reduces its demand
for manufacturing services, and the risk that the new clinical
manufacturing facility will not be operational in by the end of, or
begin generating revenue in, 2017, due to construction or other
delays or causes. 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,
2016 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 ENDEDOCTOBER
31, |
|
SIX MONTHS ENDEDOCTOBER
31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
|
Contract manufacturing
revenue |
|
$ |
23,370,000 |
|
|
$ |
9,523,000 |
|
|
$ |
28,979,000 |
|
|
$ |
18,902,000 |
|
License revenue |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
292,000 |
|
Total
revenues |
|
|
23,370,000 |
|
|
|
9,523,000 |
|
|
|
28,979,000 |
|
|
|
19,194,000 |
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
Cost of contract
manufacturing |
|
|
15,441,000 |
|
|
|
4,741,000 |
|
|
|
18,503,000 |
|
|
|
9,349,000 |
|
Research and
development |
|
|
7,022,000 |
|
|
|
14,190,000 |
|
|
|
15,591,000 |
|
|
|
28,108,000 |
|
Selling, general and
administrative |
|
|
4,984,000 |
|
|
|
4,416,000 |
|
|
|
10,044,000 |
|
|
|
9,315,000 |
|
Total
costs and expenses |
|
|
27,447,000 |
|
|
|
23,347,000 |
|
|
|
44,138,000 |
|
|
|
46,772,000 |
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
|
(4,077,000 |
) |
|
|
(13,824,000 |
) |
|
|
(15,159,000 |
) |
|
|
(27,578,000 |
) |
|
|
|
|
|
|
|
|
|
Interest and other
income |
|
|
21,000 |
|
|
|
626,000 |
|
|
|
46,000 |
|
|
|
657,000 |
|
|
|
|
|
|
|
|
|
|
NET LOSS |
|
$ |
(4,056,000 |
) |
|
$ |
(13,198,000 |
) |
|
$ |
(15,113,000 |
) |
|
$ |
(26,921,000 |
) |
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
LOSS |
|
$ |
(4,056,000 |
) |
|
$ |
(13,198,000 |
) |
|
$ |
(15,113,000 |
) |
|
$ |
(26,921,000 |
) |
|
|
|
|
|
|
|
|
|
Series E preferred
stock accumulated dividends |
|
|
(1,442,000 |
) |
|
|
(1,380,000 |
) |
|
|
(2,477,000 |
) |
|
|
(2,413,000 |
) |
|
|
|
|
|
|
|
|
|
NET LOSS
ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
$ |
(5,498,000 |
) |
|
$ |
(14,578,000 |
) |
|
$ |
(17,590,000 |
) |
|
$ |
(29,334,000 |
) |
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
Basic and
Diluted |
|
|
244,815,767 |
|
|
|
203,942,411 |
|
|
|
242,205,428 |
|
|
|
200,629,892 |
|
|
|
|
|
|
|
|
|
|
BASIC AND
DILUTED LOSS PER COMMON SHARE |
|
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.15 |
) |
PEREGRINE PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
OCTOBER 31,2016 |
|
APRIL 30,2016 |
|
|
Unaudited |
|
|
ASSETS |
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
49,055,000 |
|
|
$ |
61,412,000 |
|
Trade and other
receivables |
|
|
6,066,000 |
|
|
|
2,859,000 |
|
Inventories |
|
|
25,924,000 |
|
|
|
16,186,000 |
|
Prepaid expenses and
other current assets |
|
|
1,711,000 |
|
|
|
1,351,000 |
|
Total
current assets |
|
|
82,756,000 |
|
|
|
81,808,000 |
|
Property and equipment,
net |
|
|
23,957,000 |
|
|
|
24,302,000 |
|
Restricted cash |
|
|
600,000 |
|
|
|
600,000 |
|
Other assets |
|
|
2,624,000 |
|
|
|
2,333,000 |
|
TOTAL ASSETS |
|
$ |
109,937,000 |
|
|
$ |
109,043,000 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Accounts payable |
|
$ |
11,572,000 |
|
|
$ |
8,429,000 |
|
Accrued clinical trial
and related fees |
|
|
3,639,000 |
|
|
|
7,594,000 |
|
Accrued payroll and
related costs |
|
|
5,280,000 |
|
|
|
5,821,000 |
|
Deferred revenue |
|
|
17,980,000 |
|
|
|
10,030,000 |
|
Customer deposits |
|
|
26,928,000 |
|
|
|
24,212,000 |
|
Other current
liabilities |
|
|
1,012,000 |
|
|
|
1,488,000 |
|
Total
current liabilities |
|
|
66,411,000 |
|
|
|
57,574,000 |
|
|
|
|
|
|
Deferred rent, less
current portion |
|
|
1,347,000 |
|
|
|
1,395,000 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY: |
|
|
|
|
Preferred stock -
$0.001 par value; authorized 5,000,000 shares; 1,647,760 and
1,577,440 issued and outstanding at October 31, 2016 and April 30,
2016, respectively |
|
|
2,000 |
|
|
|
2,000 |
|
Common stock-$0.001 par
value; authorized 500,000,000 shares; 251,765,279 and 236,930,485
issued and outstanding at October 31, 2016 and April 30, 2016,
respectively |
|
|
252,000 |
|
|
|
237,000 |
|
Additional paid-in
capital |
|
|
566,314,000 |
|
|
|
559,111,000 |
|
Accumulated
deficit |
|
|
(524,389,000 |
) |
|
|
(509,276,000 |
) |
Total
stockholders’ equity |
|
|
42,179,000 |
|
|
|
50,074,000 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
109,937,000 |
|
|
$ |
109,043,000 |
|
|
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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