-- Avid Revenue Guidance Increased to $60 - $65
Million for Full FY 2017 and Contracted Backlog of Future Business
Currently at $70 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 third quarter
of fiscal year (FY) 2017 ended January 31, 2017, and provided an
update on its contract manufacturing business, preclinical and
clinical pipeline, and other corporate developments.
Highlights Since October 31,
2016"During the third quarter, Avid’s revenue growth
continued, which is a strong indicator of the increasing value of
this contract development and manufacturing organization (CDMO)
business. The steady growth of this business over the past 5
years has been remarkable and we are pleased to see the trend
continuing as we move through a number of process validations for
clients, which we expect to spur further growth in the future as
some or all of those products move to commercialization. We see
Avid as a tremendously important asset with solid upside potential
that is often overlooked as a value driver for the overall
organization. With projected revenue of over $60 million for
the current fiscal year, this is already a strong business in an
industry that is expecting substantial growth over the next decade
and we are excited about the future of the company,” stated Steven
W. King, president and chief executive officer of Peregrine, and
president of Avid Bioservices. "An important component of our
Avid growth strategy is capacity expansion within our Myford
facility. We are currently on track to install two
2,000-liter bioreactors in the facility within the next few months
with a book of business for the reactors already in place. We
believe the total capacity potential of the facility, when
operating in campaign mode, can exceed more than $75 million
annually bringing us to well over $100 million in total potential
revenue between our two manufacturing facilities, and giving us
adequate capacity to continue Avid revenue growth through FY
2018.
“As we look to the future, based on current
operations and projected demand from our existing clients, we have
also recently secured additional space within the same building as
our Myford facility for which we already have use as part of our
existing operations but would also allow us to further expand
capacity based on committed business. While we will only
begin converting the space into manufacturing capacity once client
commitments and other necessary financing is in place, this puts us
in an excellent position for continuing to grow the business beyond
the coming fiscal year.”
Mr. King continued, "During the quarter, we also
achieved a number of goals on the development front. These
efforts are highlighted by the three clinical trials under our
collaboration with the National Comprehensive Cancer Network (NCCN)
which are advancing as planned, and we expect at least two of the
trials to be initiated by mid-year. Additionally, we and our
collaborators will be presenting a number of studies at the
upcoming AACR annual meeting including data from researchers at
Memorial Sloan Kettering that support the ability of PS-targeting
agents, including bavituximab, to significantly impact the tumor
microenvironment, creating a more favorable environment for
checkpoint inhibitors. Additionally, our collaborators at the
University of Texas Southwestern Medical Center published positive
proof-of-concept data for our recently-licensed exosome-based
cancer detection platform, which could have broad potential for
patients with cancer. Even though we have reduced our R&D
expenditures, we are pleased that collaborations such as these are
allowing us to continue the advancement of our therapeutic and
diagnostic programs as we continue to evaluate the best ways for
moving our bavituximab and other PS-targeting programs
forward. The combined efforts of growing the Avid
biomanufacturing business and these important collaborations are
allowing us to make great strides on all fronts."
Avid Bioservices Highlights"The
Avid business continues to build momentum. During the third
quarter of FY 2017, contract manufacturing revenue increased 61% to
$10.7 million compared to the third quarter of FY 2016. Given
this performance, and our expected fourth quarter results, we are
increasing our full FY 2017 revenue guidance from $50 to $55
million, to $60 to $65 million," stated Paul Lytle, chief financial
officer of Peregrine. "We are also pleased to report that we
recently leased 42,000 square feet within the same building as our
Myford facility, allowing us to leverage existing oversized
utilities and infrastructure that should allow us greater
operational efficiency and overall cost savings. While we
design the new facility within this new space, it’s important to
note that our two existing commercial facilities have sufficient
capacity to continue to grow our contract manufacturing revenue in
FY 2018.”
- The company is increasing its manufacturing revenue guidance
for the full FY 2017 from $50 - $55 million, to $60 - $65
million.
- Avid's current manufacturing revenue backlog is $70 million,
representing estimated future manufacturing revenue to be
recognized under committed contracts. This backlog primarily
covers revenue to be recognized during the remainder of fiscal year
2017 and fiscal year 2018.
Clinical Development
Highlights
-- The three clinical trials under the collaboration with the
NCCN are advancing as planned.
- Moffitt Cancer Center—A Phase I Trial of Sorafenib and
Bavituximab Plus Stereotactic Body Radiation Therapy for
Unresectable Hepatitis C Associated Hepatocellular Carcinoma. This
protocol is approved and patient screening is expected
soon.Massachusetts General Hospital Cancer Center—Phase I/II
Clinical Trial of Bavituximab with Radiation and Temozolomide for
Patients with Newly Diagnosed Glioblastoma. This trial is on
track to be initiated by mid-calendar 2017.
- 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 on track to be initiated by
mid-calendar 2017.
-- The company is continuing its comprehensive biomarker
analysis of data collected in the Phase III SUNRISE trial.
- Through this analysis, and as reported previously, Peregrine
scientists have identified a correlation between overall survival
and pre-treatment levels of the biomarker, beta-2 glycoprotein-1
(β2GP1).
- The results of an analysis of pre-treatment interferon gamma
(IFN-ɣ) will be the subject of a presentation at AACR
entitled:
IFN-ɣ Analysis in Blood and Tissue as a Potential Prognostic
and/or Predictive Biomarker
Research Highlights
-- Peregrine scientists and collaborators from Memorial Sloan
Kettering Cancer Center will present preclinical results from
multiple studies at the upcoming AACR meeting in April. Each
study evaluates the use of a bavituximab equivalent in combination
with immune stimulating therapies. The following abstracts
will be presented:
- Memorial Sloan Kettering: Targeting
Phosphatidylserine in Combination with Adoptive T Cell Transfer
Eliminates Advanced Tumors without Off-Target Toxicities in a
Melanoma Preclinical Model
- Memorial Sloan Kettering (initial findings presented at
SITC): Phosphatidylserine Targeting Antibody in
Combination with Tumor Radiation and Immune Checkpoint Blockade
Promotes Anti-Tumor Activity in Mouse B16 Melanoma
- Peregrine (initial findings presented at the 2016
Society for Immunotherapy of Cancer Meeting):
Combinational Activity of LAG3 and PD-1 Targeted Therapies is
Significantly Enhanced by the Addition of Phosphatidylserine
Targeting Antibodies and Establishes an Anti-Tumor Memory Response
in Murine Triple Negative Breast Cancer
-- Collaborators from the University of Texas Southwestern
Medical Center at Dallas, recently published positive
proof-of-concept findings for Peregrine’s recently licensed
exosome-based cancer detection platform in the peer-reviewed
journal, Oncotarget. Results demonstrated that those patients
with malignant ovarian cancer displayed significantly higher blood
PS exosome levels than those with benign tumors, and the malignant
and benign groups displayed significantly higher blood PS exosome
levels than the healthy subjects.
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 15 months from
now. During the first nine months of FY 2017, the company
made significant progress toward this goal with contract
manufacturing revenues increasing 55% compared to the first nine
months of FY 2016 and research and development expenses decreasing
by 50% compared to the first nine months of FY 2016.
- Contract manufacturing revenue from Avid's biomanufacturing
services provided to its third-party customers increased to
$10,747,000 for the third quarter of FY 2017 compared to $6,672,000
for the third quarter of FY 2016.
- Total costs and expenses for the third quarter of FY 2017 were
$18,544,000, compared to $23,576,000 for the third quarter of FY
2016. For the third quarter of FY 2017, research and
development expenses decreased 60% to $5,989,000, compared to
$15,156,000 for the third quarter of FY 2016. Cost of contract
manufacturing increased to $7,974,000 in the third quarter of FY
2017 compared to $3,896,000 for the third 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 third quarter of FY 2017,
selling, general and administrative expenses increased slightly to
$4,581,000 compared to $4,524,000 for the third quarter of FY 2016
primarily due to the company's growing manufacturing business.
- Peregrine's consolidated net loss attributable to common
stockholders was $9,216,000 or $0.04 per share, for the third
quarter of FY 2017, compared to a net loss attributable to common
stockholders of $18,227,000, or $0.08 per share, for the same prior
year quarter.
- Peregrine reported $41,528,000 in cash and cash equivalents as
of January 31, 2017, 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, March 13, 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 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 are 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 15 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 manufacturing
facility will not be operational in 2019, due to construction or
other delays or causes, including the inability to raise the
capital to construct the facility. 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 ENDEDJANUARY
31, |
|
NINE MONTHS ENDEDJANUARY
31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
|
|
Contract manufacturing
revenue |
$ |
10,747,000 |
|
|
$ |
6,672,000 |
|
|
$ |
39,726,000 |
|
|
$ |
25,574,000 |
|
License revenue |
|
— |
|
|
|
37,000 |
|
|
|
— |
|
|
|
329,000 |
|
Total
revenues |
|
10,747,000 |
|
|
|
6,709,000 |
|
|
|
39,726,000 |
|
|
|
25,903,000 |
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
Cost of contract
manufacturing |
|
7,974,000 |
|
|
|
3,896,000 |
|
|
|
26,477,000 |
|
|
|
13,245,000 |
|
Research and
development |
|
5,989,000 |
|
|
|
15,156,000 |
|
|
|
21,580,000 |
|
|
|
43,264,000 |
|
Selling, general and
administrative |
|
4,581,000 |
|
|
|
4,524,000 |
|
|
|
14,625,000 |
|
|
|
13,839,000 |
|
Total
costs and expenses |
|
18,544,000 |
|
|
|
23,576,000 |
|
|
|
62,682,000 |
|
|
|
70,348,000 |
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
(7,797,000 |
) |
|
|
(16,867,000 |
) |
|
|
(22,956,000 |
) |
|
|
(44,445,000 |
) |
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE): |
|
|
|
|
|
|
|
Interest and other
income |
|
25,000 |
|
|
|
34,000 |
|
|
|
71,000 |
|
|
|
691,000 |
|
Interest and other
expense |
|
(2,000 |
) |
|
|
(14,000 |
) |
|
|
(2,000 |
) |
|
|
(14,000 |
) |
Total
other income, net |
|
23,000 |
|
|
|
20,000 |
|
|
|
69,000 |
|
|
|
677,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS |
$ |
(7,774,000 |
) |
|
$ |
(16,847,000 |
) |
|
$ |
(22,887,000 |
) |
|
$ |
(43,768,000 |
) |
|
|
|
|
|
|
|
|
COMPREHENSIVE
LOSS |
$ |
(7,774,000 |
) |
|
$ |
(16,847,000 |
) |
|
$ |
(22,887,000 |
) |
|
$ |
(43,768,000 |
) |
|
|
|
|
|
|
|
|
Series E preferred
stock accumulated dividends |
|
(1,442,000 |
) |
|
|
(1,380,000 |
) |
|
|
(3,558,000 |
) |
|
|
(3,448,000 |
) |
|
|
|
|
|
|
|
|
NET LOSS
ATTRIBUTABLE TO COMMON STOCKHOLDERS |
$ |
(9,216,000 |
) |
|
$ |
(18,227,000 |
) |
|
$ |
(26,445,000 |
) |
|
$ |
(47,216,000 |
) |
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
260,811,553 |
|
|
|
227,389,225 |
|
|
|
248,407,470 |
|
|
|
209,549,670 |
|
|
|
|
|
|
|
|
|
BASIC AND
DILUTED LOSS PER COMMON SHARE |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.23 |
) |
PEREGRINE PHARMACEUTICALS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
JANUARY 31,2017 |
|
APRIL 30,2016 |
|
Unaudited |
|
|
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash
equivalents |
$ |
41,528,000 |
|
|
$ |
61,412,000 |
|
Trade and other
receivables |
|
5,883,000 |
|
|
|
2,859,000 |
|
Inventories |
|
33,829,000 |
|
|
|
16,186,000 |
|
Prepaid expenses and
other current assets |
|
1,747,000 |
|
|
|
1,351,000 |
|
Total
current assets |
|
82,987,000 |
|
|
|
81,808,000 |
|
Property and equipment,
net |
|
24,143,000 |
|
|
|
24,302,000 |
|
Restricted cash |
|
600,000 |
|
|
|
600,000 |
|
Other assets |
|
3,587,000 |
|
|
|
2,333,000 |
|
TOTAL ASSETS |
$ |
111,317,000 |
|
|
$ |
109,043,000 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT
LIABILITIES: |
|
|
|
Accounts payable |
$ |
7,696,000 |
|
|
$ |
8,429,000 |
|
Accrued clinical trial
and related fees |
|
3,127,000 |
|
|
|
7,594,000 |
|
Accrued payroll and
related costs |
|
5,637,000 |
|
|
|
5,821,000 |
|
Deferred revenue |
|
26,367,000 |
|
|
|
10,030,000 |
|
Customer deposits |
|
26,210,000 |
|
|
|
24,212,000 |
|
Other current
liabilities |
|
941,000 |
|
|
|
1,488,000 |
|
Total
current liabilities |
|
69,978,000 |
|
|
|
57,574,000 |
|
|
|
|
|
Deferred rent, less
current portion |
|
1,325,000 |
|
|
|
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 January 31, 2017 and April 30, 2016,
respectively |
|
2,000 |
|
|
|
2,000 |
|
Common stock—$0.001 par
value; authorized 500,000,000 shares; 271,068,464 and 236,930,485
issued and outstanding at January 31, 2017 and April 30, 2016,
respectively |
|
271,000 |
|
|
|
237,000 |
|
Additional paid-in
capital |
|
571,904,000 |
|
|
|
559,111,000 |
|
Accumulated
deficit |
|
(532,163,000 |
) |
|
|
(509,276,000 |
) |
Total
stockholders’ equity |
|
40,014,000 |
|
|
|
50,074,000 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
111,317,000 |
|
|
$ |
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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