-- Avid Contract Manufacturing Revenues Increased
66% to $44.4 Million with a Revenue Backlog of $68 Million Heading
into Fiscal Year 2017 --
Peregrine Pharmaceuticals, Inc. (NASDAQ:PPHM) (NASDAQ:PPHMP), a
biopharmaceutical company committed to improving patient lives by
delivering high quality biological products through its contract
development and manufacturing organization (CDMO) services and by
advancing its novel R&D pipeline, today announced financial
results for the fourth quarter and fiscal year (FY) ended April 30,
2016, and provided an update on its contract manufacturing
business, clinical pipeline and other corporate developments.
Highlights Since January 31, 2016
“Peregrine’s business strategy is to focus the
company’s resources primarily on continuing to grow its
biomanufacturing business while advancing R&D efforts through
small, proof of concept clinical trials and the development of new
technologies. Together, this will allow Peregrine to reach
profitability, increase shareholder value by steadily increasing
the worth of the company’s established CDMO business, and retain
significant upside potential from bavituximab and other R&D
programs,” stated Steven W. King, president and chief executive
officer of Peregrine. “Over the past year, the company has
taken huge strides toward future revenue growth, including the
commissioning of a new commercial facility which is already
completely booked into early next year with potential new
commercial projects. The facility has the potential to generate
over $40 million in revenue at full capacity during commercial
production. The company continues to see such a high demand for
additional manufacturing capacity and in response, has already
begun designing a new facility for clinical stage products that
could eventually transfer into one of our commercial production
facilities. We expect this new facility to be commissioned by
the middle of 2017, and there is already a backlog of existing
business earmarked for the new facility. The company expects
the continued growth of its manufacturing revenues at these new
facilities, as well as the potential addition of new capabilities,
to be a major driver toward consistent overall profitability.”
Mr. King continued, “Concurrent with growing its
manufacturing business, Peregrine will continue to leverage its
phosphatidylserine (PS)-targeting platform in two ways. First
the company will continue to extract critical data from the SUNRISE
Phase III trial that can be instrumental in guiding the advancement
of bavituximab in combination with immune stimulating therapies. In
addition, the company announced earlier today that it has signed a
license agreement with its long-term collaborator, UT Southwestern
Medical Center, for a novel PS-exosome technology with the
potential to detect and monitor cancer at an early stage through a
simple blood test. Given the company’s tremendous knowledge
base in targeting PS and its infrastructure for developing and
validating tests for biologic samples, Peregrine is uniquely
positioned to advance this technology. The company believes
that, for a modest capital investment, it can quickly reach proof
of concept with a goal of partnering the technology with an
established diagnostics company. Overall, Peregrine believes
this strategy will allow the company to continue its research and
development activities with significant upside coming from
partnering as it moves toward profitability.”
Avid Bioservices Highlights
“The company’s manufacturing
business has experienced substantial revenue growth over the past
several fiscal years with a five-year compounded annual growth rate
of 39% and year-over-year growth of 66%. In addition, this revenue
growth came entirely from Avid’s first manufacturing facility and
the company is positioned for continued revenue growth with the
launch of its second manufacturing facility that became fully
operational in March 2016,” stated Paul Lytle, chief financial
officer of Peregrine. “With these two operational facilities,
the company is projecting manufacturing revenue of $50 to $55
million for fiscal year 2017 that is supported by a current revenue
backlog of $68 million under committed contracts.”
- On June 2, 2016, the company announced the goal of achieving
overall future sustained profitability in 24 months.
- The company is projecting manufacturing revenue for FY 2017 of
$50 - $55 million.
- Avid’s current manufacturing revenue backlog is $68 million,
representing estimated future manufacturing revenue to be
recognized under committed contracts. This backlog covers
revenue to be recognized in fiscal year 2017 and into fiscal year
2018.
- In March 2016, the company formally commissioned its new,
state-of-the-art biomanufacturing facility (Myford facility).
The Myford facility is designed to utilize the most cutting-edge,
single-use equipment to accommodate a fully disposable
biomanufacturing process for late Phase III clinical and commercial
production of biologics. The facility was designed to operate
in commercial campaign mode whereby multiple bioreactors are
simultaneously in operation, which more than doubles the facility’s
manufacturing capacity.
- The recently commissioned Myford facility has completed an
initial process validation campaign with a second process
validation underway and two more planned for later this
year.
- In response to demand for manufacturing services, the company
is now designing a third manufacturing facility dedicated to
clinical manufacturing that is anticipated to significantly
increase Avid’s manufacturing capacity. The new clinical
suite is expected to be complete and ready for clinical
manufacturing activities by mid-2017.
Clinical Development
Highlights
- SUNRISE Phase III Trial – Peregrine is currently conducting an
extensive review and analysis of the available clinical data and
testing the numerous collected biomarker samples in order to
determine if certain subgroups or patients with other
characteristics benefited more from bavituximab treatment.
The company believes such information could be critical in helping
guide the bavituximab clinical program including its collaborations
with the National Comprehensive Cancer Network (NCCN), AstraZeneca,
and other clinical collaborators.
- Going forward, Peregrine’s clinical development strategy is to
focus on small, early stage proof of concept trials with other
immune stimulating therapies. The intent behind this strategy
is to control research and development costs, while continuing to
generate clinical data to further validate bavituximab’s
combination potential that will be critical to bringing onboard a
partner to help advance the program.
- As part of this clinical strategy, Peregrine’s research
collaboration with the NCCN is advancing as planned. The
purpose of this collaboration is to expand the company's ongoing
clinical research and development of bavituximab for the treatment
of a range of tumors. Selected trials are expected to be
initiated by the end of calendar 2016, or early 2017.
Exosome Program
- Peregrine in-licensed a novel exosome technology from the UT
Southwestern that has potential for cancer detection and monitoring
applications.
- This technology aligns directly with the company’s expertise,
its proprietary PS-targeting platform and the bavituximab
development program. As such, there are opportunities to use
this technology as both a complementary tool in bavituximab’s
ongoing development, as well as more broadly as the basis for novel
cancer detection and monitoring tests that can be the focus of
partnering efforts.
- The licensed technology is designed to detect PS-positive
exosomes within the blood. These exosomes are highly
immunosuppressive, which is consistent with the immunosuppression
that is often seen in tumor microenvironments.
- Preliminary studies have provided evidence that the levels of
PS-positive exosomes present in the blood of cancer patients are
higher than levels found in the blood of healthy volunteers.
Furthermore, study findings also suggest that there is a
correlation between the level of PS-positive exosomes detected in
the blood of cancer patients and the severity of disease
burden.
- Peregrine has the existing infrastructure, staff and expertise
to develop, optimize and validate testing methodologies for
detecting PS-positive exosomes in blood samples. The company
expects to secure a partner to develop the final commercial test
kit.
Supportive Research
Highlights
- Peregrine plans to continue conducting pre-clinical and
translational studies to support ongoing and future clinical
development activities. The goal of these studies will be to
generate compelling translational biomarker data that inform the
selection of treatment combinations featuring bavituximab. The
company believes that data from these studies will be important for
partnering bavituximab.
- Positive results presented at the 2016 American Association for
Cancer Research (AACR) Annual Meeting provided further support for
Peregrine's strategy of evaluating bavituximab in combination with
a range of novel immuno-oncology (I-O) agents for the treatment of
various cancers. The presentation of preclinical study data
demonstrated enhanced anti-tumor activity and immune activation for
a combination of the preclinical bavituximab equivalent (ch1N11)
and anti-PD-1 therapy in models of breast cancer, including triple
negative breast cancer (TNBC).
Financial Results
Total revenues for the fourth quarter FY 2016
were $18,783,000, compared to $9,308,000 for the same quarter of
the prior fiscal year. For FY 2016, total revenues were
$44,686,000, compared to $26,781,000 for the prior fiscal year. The
fourth quarter and fiscal year 2016 increases were attributed to an
increase in contract manufacturing revenue.
Contract manufacturing revenue from Avid's
clinical and commercial biomanufacturing services provided to its
third-party clients increased 102% to $18,783,000 for the fourth
quarter of FY 2016 compared to $9,308,000 for the fourth quarter of
FY 2015 and increased 66% to $44,357,000 for FY 2016 compared to
$26,744,000 for FY 2015. The fourth quarter and fiscal year
increases were primarily attributed to an increase in demand for
contract manufacturing services. Current contract manufacturing
commitments from Avid's third-party customers are approximately $68
million, covering services to be provided during FY 2017 and into
FY 2018. Based on this current backlog, Peregrine expects
contract manufacturing revenue for FY 2017 to be between $50 and
$55 million.
Total costs and expenses for the fourth quarter
of FY 2016 were $30,698,000, compared to $21,477,000 for the fourth
quarter of FY 2015. For FY 2016, total costs and expenses
were $101,046,000 compared to $77,280,000 for FY 2015. These
increases for both fourth quarter and fiscal year 2016 were
primarily attributable to an increase in research and development
expenses associated with the Phase III SUNRISE trial, the clinical
costs associated with two previously planned phase II trials, and
higher manufacturing costs related to preparing bavituximab for
commercial manufacturing. For the fourth quarter of FY 2016,
research and development expenses were $16,265,000, compared to
$11,531,000 for the fourth quarter of FY 2015, and for FY 2016 were
$59,529,000 compared to $42,996,000 for FY 2015. In addition,
cost of contract manufacturing increased 104% to $9,721,000 and 47%
to $22,966,000 for the fourth quarter of FY 2016 and full FY 2016,
respectively, primarily due to higher reported revenue compared to
the same prior year periods. For the fourth quarter of FY
2016, selling, general and administrative expenses were $4,712,000,
compared to $5,188,000 for the fourth quarter of FY 2015 and for FY
2016 were $18,551,000 compared to $18,691,000 for FY 2015.
Peregrine's consolidated net loss attributable
to common stockholders was $13,264,000 or $0.05 per share, for the
fourth quarter of FY 2016, compared to a net loss attributable to
common stockholders of $13,513,000, or $0.07 per share, for the
same prior year quarter. For FY 2016, net loss attributable to
common stockholders was $60,136,000, or $0.28 per share, compared
to $54,054,000, or $0.30 per share, for FY 2015.
Peregrine reported $61,412,000 in cash and cash
equivalents as of April 30, 2016, compared to $68,001,000 at fiscal
year ended April 30, 2015.
More detailed financial information and analysis
may be found in Peregrine's Annual Report on Form 10-K, which will
be filed with the Securities and Exchange Commission today.
Conference CallPeregrine will host a conference
call and webcast this afternoon, July 14, 2016, 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 data
from future immuno-oncology trials are not consistent with the
company's translational and preclinical data, the risk that one or
more of the company's immuno-oncology collaborators terminates its
collaboration, the risk that the results from the company's
contemplated immuno-oncology trials does not support further
development of bavituximab, the submission of a Biologics License
Application or drive partnership interest, 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 ongoing profitability in 24 months, the
risk that Avid may experience technical difficulties in processing
customer orders which could delay delivery of products to customers
and receipt of payment, the risk that one or more existing Avid
customers terminates its contract prior to completion, the risk
that the new clinical manufacturing facility will not be
operational in mid-2017 due to construction or other delays or
causes, the risk that the company may not develop, or may
experience delays in developing, a commercializable and/or
regulatory approvable test derived from the licensed exosome
technology, the risk that the company experiences difficulties in
developing a test that is able to distinguish between PS-positive
exosomes from blood samples of cancer patients and PS-positive
exosomes from patients with other diseases or illnesses that
express PS-positive exosomes, the risk that the Company is unable
to generate partnering interest in any cancer diagnostic test that
maybe developed from the licensed exosome technology, and the risk
that the company is unable to secure patent protection or other
intellectual property protection for the cancer test based on the
licensed exosome technology. 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, 2015 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. |
|
CONSOLIDATED
BALANCE SHEETS |
AS OF APRIL
30, 2016 AND 2015 |
|
|
|
2016 |
|
|
|
2015 |
|
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash
equivalents |
$ |
61,412,000 |
|
|
$ |
68,001,000 |
|
Trade and other
receivables, net |
|
2,859,000 |
|
|
|
3,813,000 |
|
Inventories |
|
16,186,000 |
|
|
|
7,354,000 |
|
Prepaid expenses and
other current assets, net |
|
1,351,000 |
|
|
|
1,355,000 |
|
|
|
|
|
Total current assets |
|
81,808,000 |
|
|
|
80,523,000 |
|
|
|
|
|
PROPERTY AND EQUIPMENT: |
|
|
|
Leasehold improvements |
|
19,610,000 |
|
|
|
1,538,000 |
|
Laboratory equipment |
|
10,257,000 |
|
|
|
5,965,000 |
|
Furniture, fixtures, office equipment and software |
|
4,045,000 |
|
|
|
3,991,000 |
|
Construction-in-progress |
|
- |
|
|
|
11,819,000 |
|
|
|
|
|
|
|
33,912,000 |
|
|
|
23,313,000 |
|
Less
accumulated depreciation and amortization |
|
(9,610,000 |
) |
|
|
(8,189,000 |
) |
|
|
|
|
Property and equipment, net |
|
24,302,000 |
|
|
|
15,124,000 |
|
|
|
|
|
Restricted cash |
|
600,000 |
|
|
|
- |
|
Other
assets |
|
2,333,000 |
|
|
|
1,817,000 |
|
|
|
|
|
TOTAL ASSETS |
$ |
109,043,000 |
|
|
$ |
97,464,000 |
|
|
|
|
|
PEREGRINE
PHARMACEUTICALS, INC. |
|
CONSOLIDATED
BALANCE SHEETS |
AS OF APRIL
30, 2016 AND 2015
(continued) |
|
|
|
2016 |
|
|
|
2015 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
Accounts payable |
$ |
8,429,000 |
|
|
$ |
10,385,000 |
|
Accrued clinical trial
and related fees |
|
7,594,000 |
|
|
|
3,910,000 |
|
Accrued payroll and
related costs |
|
5,821,000 |
|
|
|
4,606,000 |
|
Deferred revenue |
|
10,030,000 |
|
|
|
6,630,000 |
|
Customer deposits |
|
24,212,000 |
|
|
|
11,363,000 |
|
Other current
liabilities |
|
1,488,000 |
|
|
|
437,000 |
|
|
|
|
|
Total current liabilities |
|
57,574,000 |
|
|
|
37,331,000 |
|
|
|
|
|
Deferred rent, less current portion |
|
1,395,000 |
|
|
|
1,098,000 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY: |
|
|
|
|
|
|
|
Preferred stock - $.001
par value; authorized 5,000,000 shares;issued and outstanding -
1,577,440 and 1,574,764, respectively |
|
2,000 |
|
|
|
2,000 |
|
Common stock - $.001
par value; authorized 500,000,000shares; issued and outstanding -
236,930,485 and 193,346,627,respectively |
|
237,000 |
|
|
|
193,000 |
|
Additional
paid-in-capital |
|
559,111,000 |
|
|
|
512,464,000 |
|
Accumulated
deficit |
|
(509,276,000 |
) |
|
|
(453,624,000 |
) |
|
|
|
|
Total stockholders' equity |
|
50,074,000 |
|
|
|
59,035,000 |
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
109,043,000 |
|
|
$ |
97,464,000 |
|
|
|
|
|
PEREGRINE PHARMACEUTICALS, INC. |
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS |
FOR EACH OF
THE THREE YEARS IN THE PERIOD ENDED APRIL 30, 2016 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
|
Contract
manufacturing revenue |
$ |
44,357,000 |
|
|
$ |
26,744,000 |
|
|
$ |
22,294,000 |
|
License
revenue |
|
329,000 |
|
|
|
37,000 |
|
|
|
107,000 |
|
|
|
|
|
|
|
Total revenues |
|
44,686,000 |
|
|
|
26,781,000 |
|
|
|
22,401,000 |
|
|
|
|
|
|
|
COSTS
AND EXPENSES: |
|
|
|
|
|
Cost of
contract manufacturing |
|
22,966,000 |
|
|
|
15,593,000 |
|
|
|
13,110,000 |
|
Research
and development |
|
59,529,000 |
|
|
|
42,996,000 |
|
|
|
27,723,000 |
|
Selling,
general and administrative |
|
18,551,000 |
|
|
|
18,691,000 |
|
|
|
17,274,000 |
|
|
|
|
|
|
|
Total costs and expenses |
|
101,046,000 |
|
|
|
77,280,000 |
|
|
|
58,107,000 |
|
|
|
|
|
|
|
LOSS
FROM OPERATIONS |
|
(56,360,000 |
) |
|
|
(50,499,000 |
) |
|
|
(35,706,000 |
) |
|
|
|
|
|
|
OTHER
INCOME (EXPENSE): |
|
|
|
|
|
Interest and other
income |
|
722,000 |
|
|
|
142,000 |
|
|
|
349,000 |
|
Interest and other
expense |
|
(14,000 |
) |
|
|
(1,000 |
) |
|
|
(5,000 |
) |
|
|
|
|
|
|
NET
LOSS |
$ |
(55,652,000 |
) |
|
$ |
(50,358,000 |
) |
|
$ |
(35,362,000 |
) |
|
|
|
|
|
|
COMPREHENSIVE LOSS |
$ |
(55,652,000 |
) |
|
$ |
(50,358,000 |
) |
|
$ |
(35,362,000 |
) |
|
|
|
|
|
|
Series E preferred stock
accumulateddividends |
|
(4,484,000 |
) |
|
|
(3,696,000 |
) |
|
|
(401,000 |
) |
|
|
|
|
|
|
NET
LOSS ATTRIBUTABLE TOCOMMON STOCKHOLDERS |
$ |
(60,136,000 |
) |
|
$ |
(54,054,000 |
) |
|
$ |
(35,763,000 |
) |
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMONSHARES OUTSTANDING: |
|
|
|
|
|
Basic and Diluted |
|
216,265,620 |
|
|
|
182,558,332 |
|
|
|
161,579,649 |
|
BASIC AND
DILUTED LOSS PERCOMMON SHARE |
$ |
(0.28 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.22 |
) |
|
|
|
|
|
|
Contacts:
Jay Carlson
Peregrine Pharmaceuticals, Inc.
(800) 987-8256
info@peregrineinc.com
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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