Reductions in R&D, manufacturing and
administrative personnel
Peregrine Pharmaceuticals, Inc. (Nasdaq:PPHM) today announced that
it has reduced its overall workforce by 60 employees (or 20%) as
part of its series of planned strategic actions to reduce costs and
better position the Company to achieve overall profitability while
it pursues strategic options for its research and development
(R&D) assets. The Company expects the workforce
reductions to result in a net cost savings of between $3.7 million
and $4.3 million in fiscal year 2018 and more than $7 million in
reduced annualized operating expenses beginning in fiscal year
2019.
As part of the cost saving initiatives, the Company reduced
Peregrine’s R&D personnel by 50% to 11 employees, with the
remaining staff supporting potential strategic alternatives for its
R&D assets while continuing to assist with collaborative
trials, the antibody discovery platform, and the exosome program.
Personnel supporting the Avid Bioservices CDMO business, a
wholly owned subsidiary of Peregrine Pharmaceuticals, was reduced
by 20% to 184 employees to align operations with the reduction in
forecasted revenues. In addition, selling, general and
administrative (SG&A) personnel was reduced by 8% to 49
employees as the Company continues to pursue leaner support
operations. The charge to earnings for these personnel
reductions will be between $1.1 million and $1.7 million, all of
which is expected to be incurred during the second quarter of
fiscal year 2018.
“While this was a difficult decision, our board and management
team believe it was a necessary step as we continue to evaluate
strategic options to further strengthen our two distinct businesses
and seek to maximize shareholder value,” said Steven King,
president, chief executive officer and director of Peregrine and
president of Avid Bioservices. “I would like to personally
express my appreciation to the affected employees for their
commitment and meaningful contributions to the Peregrine and Avid
businesses. We remain committed to capitalizing on long-term
opportunities available to our CDMO business and pursuing the best
path forward for our R&D business.”
Last month, Peregrine announced that as part of its strategic
review it intends to expand its board of directors to add new
members with CDMO and biologics experience and to commence a search
for a dedicated president to head its Avid CDMO business.
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 Bioservices, Inc. Avid Bioservices,
Inc., a wholly owned subsidiary of Peregrine Pharmaceuticals,
provides a comprehensive range of process development, high quality
cGMP clinical and commercial manufacturing services for the
biotechnology and biopharmaceutical industries. With over 20 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.
Forward–Looking Statements This communication
contains statements that relate to future events and expectations
and as such constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include those containing such words as
“anticipates,” “believes,” “could,” “estimates,” “expects,”
“forecasts,” “guidance,” “goal,” “intends,” “may,” “outlook,”
“plans,” “projects,” “seeks,” “sees,” “should,” “targets,” “will,”
“would,” or other words of similar meaning, including, without
limitation, statements regarding Peregrine’s intent to increase the
size of its Board of Directors and add independent members with
CDMO and biologics experience, the company’s intent to initiate a
search for a President to lead its wholly-owned CDMO subsidiary,
Avid Bioservices, Inc., Peregrine’s plans for advancing its R&D
business, as well as the expected timing for the foregoing matters.
All statements that reflect Peregrine’s expectations, assumptions
or projections about the future, other than statements of
historical fact, are forward-looking statements, including, without
limitation, statements and guidance regarding future financial
results or operating performance. Forward-looking statements are
not guarantees of future performance and are subject to risks,
uncertainties, and changes in circumstances that are difficult to
predict. Although Peregrine believes that the expectations
reflected in any forward-looking statements are based on reasonable
assumptions, it can give no assurance that these expectations will
be attained and it is possible that actual results may differ
materially from those indicated by these forward-looking statements
due to a variety of risks and uncertainties. Such risks and
uncertainties include, but are not limited to the risk factors
discussed in Peregrine’s Form 10-K for the year ended April 30,
2017, and other reports filed with the U.S. Securities and Exchange
Commission (SEC). Peregrine disclaims any obligation to update
publicly any forward-looking statements, whether in response to new
information, future events or otherwise, except as required by
applicable law.
Important Additional Information Peregrine
intends to file a proxy statement with the Securities and Exchange
Commission (SEC) in connection with the solicitation of proxies for
Peregrine’s 2017 Annual Meeting (Proxy Statement) with an
associated WHITE proxy card. Peregrine, its directors and certain
of its executive officers will be participants in the solicitation
of proxies from stockholders in respect of the 2017 Annual Meeting.
Information regarding the names of Peregrine’s directors and
executive officers and their respective interests in Peregrine by
security holdings or otherwise is set forth in the Annual Report on
Form 10-K of Peregrine, for the fiscal year ended April 30, 2017,
filed with the SEC on July 14, 2017, and Peregrine’s proxy
statement for the 2016 Annual Meeting, filed with the SEC on August
26, 2016. To the extent holdings of such participants in
Peregrine’s securities are not reported, or have changed since the
amounts described, in the 2016 proxy statement, such changes have
been reflected on Initial Statements of Beneficial Ownership on
Form 3 or Statements of Change in Ownership on Form 4 filed with
the SEC. Details concerning the nominees of Peregrine’s Board of
Directors for election at the 2017 Annual Meeting will be included
in the Proxy Statement. BEFORE MAKING ANY VOTING DECISION,
INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL
RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING
THE COMPANY’S DEFINITIVE PROXY STATEMENT AND ANY SUPPLEMENTS
THERETO, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors
and stockholders will be able to obtain a copy of the definitive
proxy statement and other documents filed by Peregrine free of
charge from the SEC’s website, www.sec.gov. Peregrine’s
stockholders will also be able to obtain, without charge, a copy of
the definitive Proxy Statement and other relevant filed documents
by directing a request by mail to Peregrine, Corporate Secretary’s
Office, 14282 Franklin Avenue, Tustin, CA 92780, by calling
Peregrine’s proxy solicitor, MacKenzie Partners, Inc., toll-free at
(800) 322-2885, or from Peregrine’s website at
www.peregrineinc.com.
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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