-- Avid Bioservices Records Revenues of $12.8
Million in the Second Quarter of FY2018
-- --
Transition to a Dedicated CDMO Business Nearing Completion --
Peregrine Pharmaceuticals, Inc. (NASDAQ:PPHM) (NASDAQ:PPHMP), a
company committed to improving patient lives by manufacturing and
delivering high quality biologics, today announced financial
results for the second quarter of fiscal year (FY) 2018 ended
October 31, 2017, and provided an update on its contract
manufacturing operations, and other corporate highlights.
Highlights Since July 31,
2017
“Today, we are pleased to report that the
company has made great progress in its transition from an R&D
focused business to a dedicated contract development and
manufacturing organization (CDMO),” stated Roger J. Lias, Ph.D.,
president of Avid Bioservices. “In late November, the company
came to an agreement with an investor group, appointing a highly
qualified new board of directors consisting of three new
independent members from this investor group and one mutually
designated independent member in addition to myself and the two
independent members previously appointed. We have now added
six highly qualified and independent board members since October.
In addition, we are focused on hiring experienced and successful
CDMO professionals who are dedicated to revenue growth through the
expansion and diversification of Avid’s client base, as evidenced
by the recently announced hiring of Tracy Kinjerski as vice
president of business operations. We are actively planning to
expand Avid’s service offerings and enhance our manufacturing
infrastructure to ensure that we are offering the highest quality
services, and state-of-the-art facilities to our customers.
We are also taking steps to officially change the name of the
entire organization to Avid Bioservices, Inc. to formalize this
transition. Lastly, we are in continued discussions with
third parties regarding the divestiture of the company’s remaining
R&D assets and we will keep you apprised on our progress as we
advance the process.”
Recent Developments at Avid
Bioservices
- Established a dedicated CDMO management infrastructure with the
hiring of Roger J. Lias, Ph.D., as the President of Avid
Bioservices and director.• Dr. Lias brings more than 20 years
of experience in the industry having held senior management
positions at several leading CDMOs including Cytovance Biologics,
KBI BioPharma, Diosynth RTP (formerly Covance Biotechnology
Services) and Lonza Biologics.
- Strengthened Avid’s sales and business development function
with the hiring of Tracy Kinjerski as vice president of business
operations.• Ms. Kinjerski brings more than 17 years of
experience with a focus in contract development and manufacturing.
She is charged with driving Avid’s growth through the strategic
expansion and diversification of the company’s commercial and
clinical client base.
- Reconstituted the board of directors to include six independent
directors, all with significant CDMO experience.• In October
2017, Mark R. Bamforth was appointed as an
independent member of the board of directors. Mr.
Bamforth has 30 years of biologics leadership experience
including founding two CDMOs, Brammer Bio, where he is
currently the president and CEO, and Gallus BioPharmaceuticals,
which was acquired by DPx Holdings B.V., the parent company of
Patheon. Additionally, he served for more than 20 years in key
roles at Genzyme Corporation, including 10 years as a corporate
officer responsible for running global manufacturing.• In
October 2017, Patrick Walsh was appointed as an independent
member of the board of directors. Mr. Walsh has a record of
leading successful, high-growth CDMOs and he has also led complex
laboratory and pharmaceutical manufacturing operations including
parenteral and active pharmaceutical ingredients (API) on a global
scale.• In November 2017, the company entered into a
settlement agreement with its largest shareholder (Ronin/SWIM)
regarding the composition of Peregrine's board of directors.
Under the terms of the Agreement, on November 27, 2017,
directors Steven W. King, Carlton M. Johnson,
Jr., Eric S. Swartz and David H. Pohl each
tendered his resignation, effective immediately, from Peregrine's
board of directors, and from the board of directors of Avid
Bioservices. The vacancies created by these resignations were
immediately filled by three individuals who were nominated by
Ronin/SWIM for election at Peregrine's upcoming 2017 Annual Meeting
of Stockholders (Richard B. Hancock, Gregory P.
Sargen and Joel McComb), and one director (Joseph
Carleone, Ph.D.) who is independent of Ronin/SWIM and new to
Peregrine. • Joseph Carleone, Ph.D. (independent
appointee): Dr. Carleone is Chairman of the Board
of AMPAC Fine Chemicals LLC, a leading manufacturer of
pharmaceutical active ingredients. Prior to this
position, Dr. Carleone was President, Chief
Executive Officer and director of American Pacific
Corporation, a leading custom manufacturer of fine and specialty
chemicals and propulsion products. • Richard B.
Hancock (Ronin/SWIM appointee): Richard (Rick) B.
Hancock has worked in the biologic CDMO industry for over 30
years in various operational and executive roles, serving most
recently as President and CEO of Althea
Technologies, Inc., a large molecule CDMO producing a wide range of
biologics, vaccines and parenteral products. • Joel
McComb (Ronin/SWIM appointee): Joel McComb is the
CEO, Chairman and Co-Founder of BioSpyder Technologies,
Inc. Prior to BioSpyder, Mr. McComb served as Senior
Vice President and General Manager of Illumina,
Inc., President of GE Healthcare's Life Sciences and
Discovery Systems division, and President of GE
Healthcare's Interventional Medicine division. • Gregory
P. Sargen (Ronin/SWIM appointee): Gregory P.
Sargen currently serves as Executive Vice President -
Corporate Development and Strategy of Cambrex Corporation
("Cambrex"), a global manufacturer and provider of services to life
sciences companies. Prior to his current role, Mr.
Sargen served as Executive Vice President and Chief Financial
Officer of Cambrex.
- Expanded production capacity in the Myford facility to allow
organic and significant growth using existing facilities.• In
recent months, the company expanded its capacity in its Myford
facility by installing two new 2,000 liter single-use
bioreactors.
Financial Highlights and
Results
- The company maintains its manufacturing revenue guidance for
the full FY 2018 of $50 million - $55 million.
- Contract manufacturing revenue from Avid's clinical and
commercial biomanufacturing services was $12.8 million for the
second quarter of FY 2018 compared to $23.4 million for the
second quarter of FY 2017.
- Avid's current manufacturing revenue backlog is $33.0 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 and into
FY 2019.
- Total operating expenses for the second quarter of FY 2018 were
$9.2 million, compared to $12.0 million for the second quarter of
FY 2017. For the second quarter of FY 2018, total operating
expenses included restructuring charges of $1.6 million associated
with termination benefits including severance and other employee
related costs related to a workforce reduction pursuant to a
restructuring plan implemented in August 2017. The company is
also actively evaluating its overall operating expenses and cost
structure as a dedicated CDMO and plans to align its cost structure
to match the future needs of the business.
- Research and development expenses decreased to $3.7 million in
the second quarter of FY 2018 compared to $7.0 million for the
second quarter of FY 2017. Over the next 60 or fewer days,
the Company will continue to rapidly wind down all research and
development costs to zero and plans to support only those efforts
needed to pursue the license or sale of its research and
development assets.
- Cost of contract manufacturing increased to $16.2 million in
the second quarter of FY 2018 compared to $15.4 million for the
second quarter of FY 2017.
- For the second quarter of FY 2018, selling, general and
administrative expenses decreased to $3.9 million compared to $5.0
million for FY 2017.
- Peregrine's consolidated net loss attributable to common
stockholders was $14.1 million or $0.31 per share, for the second
quarter of FY 2018, compared to a net loss attributable to common
stockholders of $5.5 million, or $0.16 per share, for the same
prior year quarter.
- Peregrine reported $27.7 million in cash and cash equivalents
as of October 31, 2017, compared to $46.8 million at fiscal year
ended April 30, 2017. As further discussed in the Company’s
Quarterly Report on Form 10-Q, the Company plans to raise
additional capital within the next six months to support its
continued operations and other initiatives that will enhance its
CDMO operations.
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, December 11, 2017, at 4:30 PM EST (1:30 PM
PST).
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
company transitioning from an R&D focused business to a pure
play contract development and manufacturing organization
(CDMO). 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).
Peregrine is pursuing the licensing or sale of
its proprietary R&D assets, including its lead immunotherapy
candidate, bavituximab, which is currently being evaluated in
clinical trials in combination with immune stimulating therapies
for the treatment of various cancers. For more information,
please visit www.peregrineinc.com.
About Avid
Bioservices, Inc.
Avid Bioservices, 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 nearly 25 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 may experience delays in completing its transition to a
dedicated CDMO business, including delays in the its efforts to
license or sell its R&D assets, the risk that the company will
be unable to license or sell its R&D assets, the risk that the
company will be unable to raise additional capital during the
remainder of the current fiscal year in order to fund Avid’s
operations, or that it will be able to raise capital on terms
acceptable to the company, 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. 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 October
31, |
|
Six Months Ended October
31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
Contract manufacturing
revenue |
$ |
12,782,000 |
|
|
$ |
23,370,000 |
|
|
$ |
39,859,000 |
|
|
$ |
28,979,000 |
|
Cost of contract
manufacturing |
|
16,242,000 |
|
|
|
15,441,000 |
|
|
|
36,690,000 |
|
|
|
18,503,000 |
|
Gross profit
(loss) |
|
(3,460,000 |
) |
|
|
7,929,000 |
|
|
|
3,169,000 |
|
|
|
10,476,000 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling, general
and administrative |
|
3,867,000 |
|
|
|
4,984,000 |
|
|
|
8,080,000 |
|
|
|
10,044,000 |
|
Research and
development |
|
3,722,000 |
|
|
|
7,022,000 |
|
|
|
7,367,000 |
|
|
|
15,591,000 |
|
Restructuring
charges |
|
1,588,000 |
|
|
|
— |
|
|
|
1,588,000 |
|
|
|
— |
|
Total operating
expenses |
|
9,177,000 |
|
|
|
12,006,000 |
|
|
|
17,035,000 |
|
|
|
25,635,000 |
|
|
|
|
|
|
|
|
|
Operating loss |
|
(12,637,000 |
) |
|
|
(4,077,000 |
) |
|
|
(13,866,000 |
) |
|
|
(15,159,000 |
) |
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
Interest and
other income |
|
14,000 |
|
|
|
21,000 |
|
|
|
41,000 |
|
|
|
46,000 |
|
Interest and
other expense |
|
(1,000 |
) |
|
|
— |
|
|
|
(4,000 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(12,624,000 |
) |
|
$ |
(4,056,000 |
) |
|
$ |
(13,829,000 |
) |
|
$ |
(15,113,000 |
) |
|
|
|
|
|
|
|
|
Comprehensive loss |
$ |
(12,624,000 |
) |
|
$ |
(4,056,000 |
) |
|
$ |
(13,829,000 |
) |
|
$ |
(15,113,000 |
) |
|
|
|
|
|
|
|
|
Series E preferred
stock accumulated dividends |
|
(1,442,000 |
) |
|
|
(1,442,000 |
) |
|
|
(2,523,000 |
) |
|
|
(2,477,000 |
) |
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders |
$ |
(14,066,000 |
) |
|
$ |
(5,498,000 |
) |
|
$ |
(16,352,000 |
) |
|
$ |
(17,590,000 |
) |
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
Basic and Diluted (1) |
|
45,097,474 |
|
|
|
34,973,681 |
|
|
|
44,935,600 |
|
|
|
34,600,776 |
|
|
|
|
|
|
|
|
|
Basic and diluted loss
per common share (1) |
$ |
(0.31 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.36 |
) |
|
$ |
(0.51 |
) |
|
|
|
|
|
|
|
|
(1) All share and per share amounts of our
common stock for all prior fiscal year 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
on July 10, 2017 (Note 1). |
|
PEREGRINE PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
October 31,2017 |
|
April 30,2017 |
|
Unaudited |
|
|
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
27,727,000 |
|
|
$ |
46,799,000 |
|
Trade and
other receivables |
|
3,508,000 |
|
|
|
7,742,000 |
|
Inventories |
|
16,518,000 |
|
|
|
33,099,000 |
|
Prepaid
expenses |
|
1,223,000 |
|
|
|
1,460,000 |
|
Total
current assets |
|
48,976,000 |
|
|
|
89,100,000 |
|
Property and equipment,
net |
|
27,148,000 |
|
|
|
26,515,000 |
|
Restricted cash |
|
1,150,000 |
|
|
|
1,150,000 |
|
Other assets |
|
1,353,000 |
|
|
|
1,347,000 |
|
Total
assets |
$ |
78,627,000 |
|
|
$ |
118,112,000 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
2,739,000 |
|
|
$ |
5,779,000 |
|
Accrued
clinical trial and related fees |
|
5,392,000 |
|
|
|
4,558,000 |
|
Accrued
payroll and related costs |
|
4,063,000 |
|
|
|
6,084,000 |
|
Deferred
revenue |
|
7,473,000 |
|
|
|
28,500,000 |
|
Customer
deposits |
|
13,138,000 |
|
|
|
17,017,000 |
|
Other
current liabilities |
|
745,000 |
|
|
|
993,000 |
|
Total
current liabilities |
|
33,550,000 |
|
|
|
62,931,000 |
|
|
|
|
|
Deferred rent, less
current portion |
|
2,171,000 |
|
|
|
1,599,000 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
Preferred
stock—$0.001 par value; authorized 5,000,000 shares;1,647,760
issued and outstanding at October 31, 2017 and April 30,2017,
respectively |
|
2,000 |
|
|
|
2,000 |
|
Common
stock—$0.001 par value; authorized 500,000,000 shares; 45,172,632
and 44,014,040 issued and outstanding at October 31,2017 and April
30, 2017, respectively |
|
45,000 |
|
|
|
44,000 |
|
Additional paid-in capital |
|
594,004,000 |
|
|
|
590,971,000 |
|
Accumulated deficit |
|
(551,145,000 |
) |
|
|
(537,435,000 |
) |
Total
stockholders’ equity |
|
42,906,000 |
|
|
|
53,582,000 |
|
Total
liabilities and stockholders’ equity |
$ |
78,627,000 |
|
|
$ |
118,112,000 |
|
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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