Thursday, September 11, 2008 5:10:44 PM
9-9-08 Qtly CC Transcript (q/e 7-31-08)
(( Orig. transcript from SeekingAlpha.com [ http://tinyurl.com/6jhhoe ], with numerous corrections made… Recall that SEEKING-ALPHA blogger Ohad Hammer wrote an interesting 9-21-07 article titled, “Peregrine Pharmaceuticals May Be On To Something”: http://tinyurl.com/2hqtkw )))
Link to webcast replay: http://ir.peregrineinc.com/eventdetail.cfm?EventID=59134
9-9-08 Q4 FY’08 Earnings Conf. Call (Q/E 7-31-08)
WELCOME & FWD-LOOKING STATEMENTS: Barbara Lindheim (IR) (BioCom Partners, NYC)
CEO Steve King – OPENING COMMENTS:
Thank you, Barbara. I'd like to start by thanking everyone who is participating in today's 1st quarter FY2009 conference call. I will start with a brief recap of developments since our last conference call. Paul will then go over the financial highlights for the quarter, and I will conclude with a more detailed review of product and corp. development activities. We will then end with a Q&A session.
The past couple of months have continued to be a very productive time at Peregrine. Since our last quarterly CC, we continued follow-up on patients in stage 1 of the bavituximab plus docetaxel Ph.2 breast cancer study [GA.]. We continued patient enrollment in a 2nd Ph.2 study [India] testing Bavi in combination with carboplatin & paclitaxel in lung cancer patients. And we recently initiated patient enrollment in a 3rd Ph.2 trial [India] testing Bavi in combination with carboplatin & paclitaxel again, this time in patients with advanced breast cancer.
We are very pleased that we now have all 3 of our initial Ph.2 bavituximab cancer trials underway. While moving our Ph.2 Bavi programs forward, we have continued patient enrollment & follow-up in the other ongoing Bavi & Cotara clinical studies. And, we have continued to make progress on the preclinical front. In addition to these clinical developments, we recently began work under our contract with the Defense Threat Reduction Agency, or DTRA, to evaluate & develop Bavi and a human equivalent antibody for the treatment and/or prevention of viral hemorrhagic fever virus infections. In addition to advancing our product dev. efforts, sales at our contract mfg. subsidiary, Avid Bioservices, continue to show positive signs of growth.
I will now turn the call over to Paul and will return later to discuss our clinical & product dev. efforts in greater detail.
CFO Paul Lytle:
Thank you, Steve. Thank you Barbara, and thank you everyone for joining us. Early this morning, we released our financial results for Q1 FY2009. This earnings release outlines the financial results in greater detail and includes financial tables, so I encourage everyone to read the entire release. We also plan to file our Form 10-Q later today and both of these documents will be available on our Web site. During the next few minutes, I will take you through our financial results for Q1 ended July 31, 2008. I will then briefly discuss our current financial position and I will conclude with a discussion covering 3 other important topics.
Now let me begin with the finical results for the first quarter starting with revenues. Total revenues for q/e July 31, 2008 were $1.5mm compared to $1.6mm for the same quarter last year. Most of the revenues were generated from third-party customers of our wholly-owned contract mfg. business Avid Bioservices. In addition, I am pleased to report that we have a new revenue line item included in our statement of operations called Gov’t Contract Revenue. This new line item will be used to report revenues under our contract with the DTRA that was recently signed on June 30, 2008. As mentioned on the previous call, this contract is potentially worth up to $44.4mm over a 5-year period with up to $22.3mm available for the initial 24-mo. base period. The contract is on a cost plus fixed fee basis whereby we are reimbursed for all allowable costs under the project, plus we receive an addl. fee for our efforts. Upon signing the contract, we immediately kicked off the project and billed DTRA approx. $1.8mm in the first month, while we are able to report earned revenues of $324,000 in the same period under Generally Accepted Accounting Principles. We have a dedicated project mgt. team devoted to the success of the project and we believe we have already made significant progress.
Now shifting to contract mfg. revenues, we are projecting another record year for Avid in FY2009, potentially topping $10mm in revenues based on current signed contracts from third-party customers. Revenues from the first quarter were in line with our expectations with most of the projected revenues expected to be recognized in the remaining 3 quarters of this FY. And this is in addition to the important manufacturing services Avid provides Peregrine in supporting our 3 ongoing clinical programs. Needless to say, Avid continues to be an important asset for the company in many ways.
Now let me turn to expenses. Total costs & expenses slightly increased by about 2.5% to $6.7mm for the current quarter. This compares to total cost & expenses of $6.5mm reported in the same prior year period. This increase was primarily related to an increase in R&D costs as we continue to advance our 3 clinical pgms. This increase was partially offset by a decrease in the cost of contract mfg. related to lower reported contract mfg. revenues in the current quarter. In addition, SG&A expenses for the curr. quarter of $1.7mm remained in line with the prior year quarter. We are pleased to keep SG&A expenses steady in light of our increased SG&A efforts and supports of a newly awarded gov’t contract and the increase in business at our Avid subsidiary.
Now onto the other income category; we saw a decrease in interest and other income of $164,000, mostly due to a lower avg. cash balance on hand compared to the same prior year period. Now let me turn to the bottom line. For Q1 FY2009, Peregrine reported a net loss of approx. $5.1mm or $0.02 per basic undiluted share. This compares to a net loss of approx. $4.7mm or $0.02 per basic undiluted share in the same prior year period. The increase in our net loss was primarily related to an increased investment in R&D of $444,000. Steve King will discuss our R&D progress in more detail later in the call.
Now let me shift your attention to the balance sheet. We ended the quarter with approx. $10mm in cash & cash equivalents at July 31, 2008. This compares to $15.1mm in cash & cash equivalents reported at our last FY-end date, April 30, 2008. Now if you look at liquid assets on the balance sheet, representing cash & receivables, we had $13.9mm in liquid assets at July 31, 2008, compared to $15.7mm at our FY-end April 30, 2008 or a decrease of approx. $1.8mm during the entire quarter. Liquid assets will be an important measure of our capital resources, representing cash on hand and assets that can quickly be converted into cash.
Now let me conclude with 3 addl. important points.
The first point I would like to address pertains to our financing efforts. We are actively pursuing 2 parallel paths to raise addl. capital. First and foremost, we are pursuing a pure-debt transaction such as a term loan. These term loans are generally paid back over a 3-year period with interest-only payments made during the initial 6 months. We are in active negotiations at the moment with potential lenders and we will continue to pursue this debt financing under the best available terms. We believe if we are successful in negotiating a pure-debt transaction, this funding could provide an addl. runway of capital as we continue to advance our programs with the intention of bridging ourselves to better market conditions and addl. positive clinical data. Our 2nd source of potential capital could come from the full or partial sale of our wholly-owned mfg. business. We have 2 major points to consider for any transaction involving Avid. These include an upfront cash payment and guaranteed access to mfg. capacity for us and for our clients. It is important to note that we have been approached by a number of parties interested in Avid and like all such transactions, these deals take time to secure the right buyer at the right terms. We will keep you apprised of any significant developments coming from these ongoing discussions.
The second topic I would like to address pertains to our continued listing on NASDAQ. On Sept. 4th, we had an oral hearing before the NASDAQ hearing panel. Prior to that hearing, we submitted to the independent panel and to our NASDAQ Listings Qualifications Staff, our definitive plans to regain compliance with the min. bid price requirement. The NASDAQ Listings Qualifications Staff, after reviewing our definitive plan submitted to the indep. panel its hearing memorandum. I am pleased to say that the staff’s hearing memorandum was supportive of our definitive plan of compliance. Further, the staff stated that it would not object if the panel granted Peregrine an exception under the rule, not to exceed 180 days from the date of the Staff Determination Letter or until Jan. 20, 2009, within which to regain compliance. If we are granted this exception from the indep. NASDAQ panel, our stock would continue to be listed and traded as normal during this exception period. As stated before, last Thursday we attended our oral hearing with the indep. panel. At that meeting, we reinforced the company’s commitment to regain compliance under our definitive plan submitted to NASDAQ by effecting a reverse stock split, should we not regain compliance by other means. We also outlined the potential events that could positively influence the company’s stock price and may contribute to regaining and/or sustaining long term compliance with the $1 min. bid price rule. We now expect a written decision from the indep. panel within 30 days of our Sept. 4th meeting. We are optimistic that we have delivered a compelling compliance plan that should allow us to receive an exception and addl. time to regain compliance. Nonetheless, I want to note that it is possible that the panel could reject our plans which could result in the suspension & delisting of the company’s securities from the NASDAQ stock market. Although we do not believe this will be the outcome, it is important for stockholders to understand the process and all potential outcomes. As soon as we receive the panel’s letter, we will issue a press release to report their decision.
The third and last topic I would like to address pertains to one component of our plan submitted to NASDAQ to regain compliance with a min. bid price requirement. Since no one can control the price of their stock, NASDAQ requires that a definitive plan to regain compliance with a $1 min. bid price rule must include a plan for a R/S. Therefore, we did exactly what was required by NASDAQ. We filed our definitive proxy on Aug. 28th, and requested shareholders to approve a R/S in the range of 3-1 to 10-1. Although there are valid reasons to support the R/S, and valid reasons to oppose it, there is one overriding reason to those in favor of the R/S. If the company is unable to effect the R/S and our stock becomes delisted from NASDAQ, our access to capital becomes immediately diminished and our cost to capital may significantly increase. Clinical trials are long & expensive, and hindering our access to capital could be devastating for the future of Peregrine and our clinical programs. Now many stockholders have asked a question, if the R/S is approved by the stockholders, what is the timeframe to implement the R/S? What I can say definitively is that a R/S would be implemented no later than 20 trading days prior to any final extension date provided by the NASDAQ panel, provided we have not otherwise regained compliance by that time under normal circumstances. We will continue to closely monitor the market conditions of our stock and the anticipated news flow, so that if we effect a R/S, we establish the best possible foundation to sustain our market cap and PPS as adjusted for the R/S. We are also optimistic that we will have access to many more institutional investors if a R/S is implemented and once this threat of delisting is removed.
I would like to thank you for your time and attention. This concludes the discussion of the financial results. Steve will now update everyone on the company’s recent achievements and our major objectives for the upcoming months...
CEO STEVE KING – ACHIEVEMENTS & MAJOR OBJECTIVES:
I would now like to go onto more detail on the company highlights I briefly mentioned earlier. We have continued to build considerable momentum, particularly in the bavituximab oncology program. This momentum has come through continuing patient enrollments and follow up in the 2 Bavi Ph.2 studies started earlier this year; and more recently, by beginning patient treatment in our 3rd Ph.2 study. Now let me provide a little more detail on these trials.
BAVI ANTI-CANCER PGM:
PHASE II BAVI+DOCETAXEL VS. MBC IN E.EUR.(GEORGIA):
We continue to be pleased with results coming out of the Ph.2 study [GA.], testing Bavi in combination with a chemotherapy drug, docetaxel in patients with advanced breast cancer. As a quick reminder, this is a 2-stage Ph.2 study. We completed enrollment in the initial set of 15 patients back in April, and since announced we had already surpassed the primary endpoint with 7 of 14 evaluable patients achieving partial tumor responses (PR) by the first evaluation time point of 8 weeks. A PR represents at least a 30% reduction in primary tumor size, with no evidence of new metastatic lesions. I am pleased to report that from continuing follow up and treatment, we now have 9 of the 14 evaluable patients who have achieved PR’s, and continue to be very happy with the follow up results we have seen today. We currently plan to give a more formal update on the first part of this trial when all the patients will have completed their 6-month chemotherapy treatment window. Having met the primary endpoint for the first set of patients, we began making preparations to expand the trial to include an addl. 31 patients. These preparations including building drug inventory, procuring chemotherapy supplies, auditing data collected as part of the trial, and oh yes, waiting for hostilities between Russia & Georgia, where the trial is being conducted, to subside. Our thoughts & prayers certainly go out to all those affected by these hostilities and we are pleased that the fighting between the 2 nations appears to have now ended and everything seems to be slowly returning to normal. The hostilities seemed to have had minimal impact on our clinical trial, with patient follow up in the study proceeding according to plan. However, we did want to make sure that before we started the 2nd stage of the study, we were confident that it could proceed without interruption. We are now ready to move to the 2nd stage of this important study and are working closely with the clinical trial sites to prepare for beginning patient enrollment. We look forward to updating you on activities in this trial and to sharing more data from this study as patient treatment and follow up progresses.
PHASE II BAVI+TAXOLCARBO VS. NSCLC) IN INDIA:
While preparing for the 2nd stage of the Bavi plus docetaxel study, we have continued patient dosing in the Ph.2 trial [India], evaluating the safety & efficacy of Bavi in combination with the chemotherapy agents, carboplatin & paclitaxel in patients with non-small cell lung cancer, the leading cause of cancer deaths in the U.S. We began enrollment in the study back in July and it has proceeded as expected with brisk patient enrollment. We look forward to updating you on progress in the trial in the near future as we complete enrollment in the first 21 patients of the study, who represent the first stage of this 2-stage study.
PHASE II BAVI+TAXOLCARBO VS. MBC IN INDIA:
Since our last CC, we also initiated patient enrollment in a 3rd bavituximab Ph.2 cancer study. This one is also evaluating the safety & efficacy of Bavi in combination with carboplatin & paclitaxel in patients with advanced breast cancer. Like the other 2 Ph.2 Bavi cancer studies, the primary endpoint is an evaluation of overall tumor response rate in patients receiving treatment. Patient enrollment in this study is also proceeding very well, and again, we look forward to updating you on progress in this trial in the near future, as we complete enrollments in the 1st 15 patients comprising the 1st stage of the study.
BAVI ANTI-VIRAL PGM:
Now turning to the Bavi anti-viral program, we announced just prior to our last CC that we had entered into a 5-year DTRA contract, potentially worth over $44mm to test & develop bavituximab and a fully human equivalent antibody as potential broad spectrum agents for the treatment or prevention of viral hemorrhagic fever infections. This contract is now successfully underway and we have already begun work and invoicing on a number of fronts for the program, including a considerable amount of work at our Avid mfg. unit. In addition to the DTRA-funded work on our antiviral program, we are continuing our clinical trial evaluating bavituximab in patients co-infected with HCV & HIV, where enrollment is proceeding at a moderate but steady pace, reflecting the strict enrollment criteria required for this initial study.
DUKE/HIV:
We are also continuing multiple preclinical collaborations in the antiviral area. In particular, our collaboration with researchers at Duke and other institutions, testing our anti-PS antibodies, continues to yield valuable insights into the potential of this technology platform in HIV. And, I am happy to report that data from this collaboration will be highlighted this fall at the prestigious AIDS Vaccine 2008 Conference to be held in Cape Town, South Africa from October 13-16. This will mark the first time that data from our collaboration has been presented and we are very pleased with the opportunity to share the information with the broader scientific community. These collaborations have allowed us to make considerable progress in understanding the potential of our anti-PS technology platform for the treatment and possible prevention of serious virus infections, and have only served to heighten our excitement over the antiviral potential of this platform.
[ Dr. Barton Haynes, AIDSVaccine’08,10-14-08: ”The Search for New Broadly Neutralizing Antibodies & Methods of their Induction: Finding a Path to Successful HIV-1 Vaccine Development” http://tinyurl.com/5newg7 ]
COTARA BRAIN CANCER PGM:
Next, I would like to turn to our Cotara brain cancer program. We have worked over the past months to strengthen the foundation for progress in the Cotara clinical program, by initiating addl. clinical sites and continuing outreach for our 2 ongoing trials of Cotara in patients with GBM. And while these activities have enhanced the number of patients being screened and other associated activities at the clinical sites, patient enrollment has continued to be modest. We will continue our efforts to move the program forward, and are working with the clinical trial sites to address the issues that have complicated patient enrollment. We will continue to closely monitor progress in the trials and to take addl. steps to speed patient enrollment for this program, which we believe has great promise in treating this devastating disease.
BUSINESS OPERATIONS - AVID
On the corporate side, the biggest advancement in our business operations has continued to be the growth of our Avid contract mfg. business. While Avid has always been and continues to be a major strategic asset for Peregrine and our clinical programs, we see significant potential in growing the value of this business unit. We are continuing to see very high levels of activity at Avid and we believe Avid has the potential to be a profitable, stand-alone business this year, while also providing valuable services to Peregrine. We look forward to updating you on further advances at Avid as the business continues to grow.
PARTNERING AND BUSINESS DEVELOPMENT
On the business development side, interest in our bavituximab, Cotara, and preclinical programs from potential partners remain strong, and is growing as a result of the data we are generating on both the clinical & preclinical fronts. We are engaged in active and ongoing discussions with a number of potential partners and we are confident that a steady flow of upcoming data from our clinical and preclinical programs will result in significant licensing opportunities.
Operator, we are now ready to open the floor for questions.
Q&A:
1. Kevin Burdick (Investor):
The market cap for the company is roughly $74mm, of which you can argue that Avid is worth roughly $45mm based on std. sales multiples, you got $10mm in cash; so that means the remaining value of about $20mm for the entire pipeline. Tell me, is the market bright; or what is going on there and if it is wrong, then what are you guys doing to educate the market that our pipeline is worth much more than $20mm, strictly without the appetite for pipelines with big pharma and big biotech?
PL: I think we clearly feel that our market cap is not representative of the true value of the company, I think you did an excellent job of breaking it into the individual units and when you really break it down and just consider the value that’s currently being given to the technology, it seems extremely depressed currently. When you consider the facts that we are generating Ph.2 data, we have some very promising things happening on the preclinical side in addition to the $44.4mm potential from the contract with the U.S. gov’t. Clearly, the overall market is down. We feel that particularly small biotech companies have been adversely affected by the overall market conditions maybe more than other sectors. I think one of the keys is getting beyond the current delisting threat and, you know, the associated activities with that. I think as we get through that, we will be able to really do a lot more outreach, and we’re obviously currently doing outreach, but really be able to step up those efforts with institutional investors. We know there is a lot of interest in the company from potential partners. Hopefully, we’ll be able to close some deals that will bring addl. cash in and again provide further outside validation, which should come on several fronts, again thru publications, hopefully some partnering deals as well as some – just generating some additional clinical data which I think is going to be very promising. I think it is perplexing the reason our stock price is depressed. We are certainly working on multiple avenues to get the word out there about the company, the promise of its technologies, and while we can’t control the stock price, there certainly are a lot of exciting things happening that we hope will drive that value in the future.
2. Ren Benjamin (Rodman & Renshaw):
RB: A couple of questions here, maybe starting off with the clinical trials. You gave us some updated results from the Ph.2 trial [GA.] with Bavi & Docetaxel, 7 out of 14 patients achieving a PR. Can you comment a little bit or give us an update as to what the duration of response has been that you have been able to achieve in those patients who have gotten a PR. And you mentioned that there would be a formal update at the 6-mo. follow up; when will that be?
SK: Basically, we are currently at 9 of the 14 patients have now achieved partial tumor responses. The formal update will come at the – it is basically a 6-month chemotherapy window for this trial. So, that 6-mo. time period - we enrolled the last patient around the middle of April, so that will be coming up by the middle of October. So, around that timeframe we should be able to give a more formal update. At that time, we’ll probably talk a little bit more about things like the duration of response, the time to see more progression and what have you. Obviously for those kind of secondary endpoints; the primary endpoint was the tumor responses, but for the secondary endpoints, you really just need more time to have the data mature and get patients out far enough for that data to start to make some sense. So we will be able to start addressing that again in the update toward the middle of October, and then obviously continue updates on those patients as we move into the 2nd part of that study, and then also we should be able to start reporting from the other 2 Ph.2 studies [India].
RB: And will that be at a scientific conference, or – how should we be looking for that update?
SK: There is potential that it could come out at a scientific presentation we have coming up around that timeframe, it will just depend on if the data is ready by then. In other words we have to do scans and then get the data and then crunch it and what have you. The alternative is that we just put out an update probably around the time of our shareholders meeting.
RB: Okay. And then, what about – since we have these updated results and you mentioned you have 9 out of 14 now at PR, how has the safety profile been looking?
SK: I think in this trial, so far it has been consistent with what you would expect with the chemotherapy alone. Again, just as we saw in the earlier pilot study. So far, obviously everyone is happy with moving into the larger 2nd part of the study. So we feel that so far it has been very acceptable.
RB: Okay. Regarding the non-small cell lung cancer trial (India], I know you only began it in July, but what has been the enrollment progress so far?
SK: Both those studies are proceeding very nicely. We are making our way very nicely - for both the breast cancer study and for the lung cancer study we’re at or past the 50% enrollment rate for both of those studies. Again, there’s a few more patients in the first part of the lung cancer study with 21 patients versus 15 in the breast cancer study. But, so far is right on – in fact tracking almost exactly with our projections for getting the trial completed. So I think over the next few weeks, we should be able to get through the initial stage of patients in both of those studies and then again provide some update as we move forward with patient follow up.
RB: So the enrollment is – for at least the 1st stage is planned to complete by the beginning of4th quarter or so, is that about right?
SK: I think we certainly want it completed – yes, by the – during this quarter.
RB: Okay. And I guess from the Cotara program, you mentioned that the patient enrollment has been modest and that you are addressing the issues that are sort of complicating enrollment. Can you talk a little bit about what those issues are and then, how you plan on addressing?
SK: Certainly. I think part of it is – the initial push was to get the number of clinical sites up to full speed and then to hopefully use that in combination with outreach to drive more patients to the screening process, because that is clearly the key in any clinical study is getting patients into screening and then the ones who make it through will eventually enter into the study. Some of the issues have been relatively specific to India and some the clinical sites. Basically to administer the drug, it requires a collaboration between the neuro/oncology and radiation/oncology groups. In some cases, that is a very smooth cooperation; in other cases we have had to really work with hospitals to bring those 2 groups together. So we worked through those sorts of issues. Some of the issues we have run across have really been specific to India; again, typically the patients are funneled in from the surrounding area. Even things like transportation, which you more or less take for granted in trials in the U.S., can become a challenge. So, we worked out systems whereby we can help the patients actually get to the hospitals for – obviously not just their treatment, but for the follow ups and what have you, and for even for the screening and making housing available and those sort of things. So it has really just been a lot of little things, in each site it’s a little bit specific if you will for their particular situation. I don’t see anything that is necessarily something that is a longer term overall concern. The efficacy of the drug is there, we believe the drug works and it is just a matter of – again, continuing to really work aggressively with the clinical sites. And so I think we are seeing a big uptick in patients coming to the screening program. It is just now a matter of getting them into the trial as a result of that.
RB: Okay. And then I guess, milestone-wise and drivers-wise, you mentioned several of course; one is the Ph.2 trial on breast cancer [GA.], an update hopefully around the November timeframe or so; you have the AIDS Vaccine Conference that’s coming up. Could you just summarize sort of sequentially all the drivers that you see for the rest of the year?
SK: Sure. I think if we kind of walk through them; so completing the 1st stage of the carboplatin & paclitaxel combination therapy studies [India] in breast & lung cancers should be coming out; an update on the docetaxel combination therapy breast cancer study [GA.] again around mid-October; around the same timeframe will be AIDS Vaccine 2008 Conference. Then we should start to be getting some significant amounts of data from the – again as we do the patient follow up in the carboplatin & paclitaxel studies, hopefully being able to move pretty quickly into the 2nd parts of those studies as we achieve our pre-established milestones. And then again, continuing follow up from those trials. We have a few other conferences we will be speaking at, and again an opportunity to highlight some more of the preclinical data. We also have a couple of preclinical publications that are in the works and I would certainly hope that those will be coming out between now and the end of the year. Those are a little harder to project because – just because of the process of submitting manuscripts and getting them accepted. But certainly we would expect there is a good potential from most of those to be out by the end of the year.
RB: Okay. And then from a burn point of view and burn guidance, the $10mm or so that you had mentioned earlier, how much longer is that supposed to last the company?
PL: The only thing we said publicly, Ren, is that we believe we have enough cash on hand, including the projected revenues coming in from Avid combined with the projected revenues from the DTRA grant, to get us through at least April 2009. Our goal is to complete financing way before that time frame this debt type transaction, that should hopefully bridge us to better market conditions and give us time to generate some of this clinical data and then we will reevaluate the financial condition at that point and our financial resources.
RB: And the Avid revenues, at least the way I had modeled it, it seems to have come in lower than what I had modeled and so I wanted to know is there some seasonality associated with it? Is it just had something to do with when the contracts are actually booked, how should we be looking at the Avid revenues that are coming in?
PL: On the (inaudible), most of our revenues come from contract mfg., not really the development services. About 80% are on the mfg. side, so it’s dependent on the number of mfg. runs that are in the works at the time.
RB: So, you believe that the number runs will increase through the remaining quarter?
PL: Absolutely. And if you look at the balance sheet right now, our inventories are up to close to $5mm and inventories, those are built up work in process inventories, most of them to be reported in the subsequent period.
RB: Okay, great.
PL: So, there is a bunch of built up manufacturing inventories that we have been working on that will be reported as revenues in the following quarter.
RB: Okay, terrific. Thank you very much guys and good luck.
PL: Thanks Ren.
3. Stephen Dunn (Dawson James):
SD: I think Ren’s one question pretty much answered everything I needed. I would just like a little color, if you will, on the Crucell PER.C6 business?
SK: Essentially that is a partnership whereby they will work with us to steer West Coast potential clients toward Avid. I think what is exciting about it from our standpoint is they’ve gotten some pretty large numbers as far as production with their cell line. And I think the net benefit from the Avid standpoint is the higher the production of the cell lines, the smaller reactors you need. And, our current top reactors are about a 1,000 liter scale, whereas the Boehringer Ingelheim companies be at the 10,000 plus liter scale, which is really not practical in our existing location here. So, I think what it opens the door for us is many more clients who, based on higher production levels, can really drive their business through us, and we can maintain their production even on to the market, which again is the key for growing a successful mfg. business. So, the collaboration is going pretty well. We’re out doing some things in collaboration with DSM as far as promoting the partnership and I think we will see some good rewards there as we go forward. Right now, we are just really extremely busy on the Avid side. Again, I think you will see a lot of these show up on the revenues in future quarters as the material is produced and then gets released. But I think it is going to be a really good collaboration for us.
4. Richard Siracusa (Merrill Lynch):
RS: Steve & Paul, just to clarify two things, regarding the reverse split, I guess we don’t have to concern ourselves about that until 20 days prior to the expiration of the extension if you get one; is that correct?
PL: What we are going to do, Dick, is we’re going to be evaluating the market conditions of the company, evaluating our news flow, anticipated future events. I mean the latest we would do it would be 20 days prior to any extension. But again, we will closely monitor the market conditions of the company where our stock is sitting to make sure that if we have to implement that reverse stock split we give it the best chance for success, and to build market cap from there.
RS: Yes, but you say you probably would not do it until 20 days before the end expiration of the extension.
PL: That would be the latest we would do it.
RS: Okay. And secondly, the AIDS conference in Africa, is that going to be a comprehensive presentation of everything that Duke has being doing?
SK: Ahhh - good question… It’s probably not a comprehensive, but it will be certainly laying out an awful lot of the story of what we’ve learned with the anti-PS platform technology. And, it’s what we think is great promise as potentially playing a role in treating or developing an AIDS vaccine. So, it’s going to be a lot of data. The bottom line is we’ve generated more data than we could possibly present in one simple presentation.
RS: Who will be presenting it?
SK: That will be presented by Bart Haynes. He is the head of the group there and obviously very well known in the HIV research area. So, there will be a lot of data presented there. But there’s a lot more coming. So, I would see really this being sort of the kick off, if you will, of a number of potential presentations & publications in this area for the program and our collaboration with Duke and the other institutions involved.
RS: Okay. Could a scientific publication precede this conference?
SK: It possibly could. And again, that’s – it’s a litter harder to predict. Once things are submitted, the review process, sometimes they sail through and sometimes they want you to make some adjustments to the manuscripts. But yes, I think there is a lot of – we’ve generated so much data, we probably have enough for quite a few future activities around it.
RS: Okay. Thank you.
Operator: This concludes today‘s Q&A session.
MR. KING’S CLOSING COMMENTS:
I would like to again thank you all for participating in this conference call and for your continuing support of Peregrine. We are optimistic that we will be successful in maintaining our listing on NASDAQ and believe that the removal of the delisting threat and continued success in our clinical and preclinical programs will enable us to build sustainable value in Peregrine. I look forward to reporting on our continuing progress at the next quarterly CC. Thank you again.
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ALL SEC filings for PPHM: http://tinyurl.com/6d4jw8
Latest 10Q 7-31-08 iss. 9-9-08: http://tinyurl.com/xxxxxx PR: http://tinyurl.com/5q9phf (Cash 7-31-08 $9.96mm)
Peregrine Pharmaceuticals Reports Financial Results for the First Quarter of FY2009
• Advances Achieved in All Clinical Programs, With 3 Bavituximab Ph.2 Cancer Trials Ongoing
• Updated Initial Data from Bavituximab Plus Docetaxel Ph.2 Breast Cancer Trial [GA.] Shows at Least 9 of 14 Evaluable Patients Achieved a Partial Tumor Response
• Company Begins Work under Contract with Defense Threat Reduction Agency Potentially Worth Up to $44.4 Million
http://ir.peregrineinc.com/releasedetail.cfm?ReleaseID=333100
TUSTIN, Sept 09, 2008: Peregrine Pharmaceuticals, Inc. (Nasdaq: PPHM) today announced financial results for the first quarter of FY (FY) 2009 ended July 31, 2008. The company reported a consolidated net loss of $5,086,000, or $0.02 per basic and diluted share, compared to a consolidated net loss of $4,656,000 or $0.02 per basic and diluted share for the same prior year period. The increased net loss primarily reflects increased investments in research and development as the company advanced its clinical programs for bavituximab and Cotara(R).
Total revenues for the current quarter were $1,517,000 compared to $1,625,000 for the comparable quarter last year and were primarily generated from services provided by Avid Bioservices, the company's wholly owned contract mfg. subsidiary. Total revenues for the quarter also include the first government contract revenues generated by Peregrine's contract with the Defense Threat Reduction Agency (DTRA), potentially worth up to $44.4 million over a period of up to 5 years to evaluate bavituximab for the prevention or treatment of viral hemorrhagic fever infections.
Total costs and expenses increased to $6,677,000 in the first quarter of FY2009 from $6,513,000 in the same prior year quarter. The increase was primarily related to Peregrine's increased investment in research and development associated with the advancement of its 3 clinical programs for bavituximab and Cotara(R) for the treatment of solid tumors and hepatitis C virus (HCV) infection. Research and development expenses were $4,068,000 in the first quarter of FY2009, compared to $3,624,000 in the first quarter of FY 2008. At July 31, 2008, the company had $9,963,000 in cash and cash equivalents compared to $15,130,000 at FY end April 30, 2008. In addition, liquid assets, representing cash and receivables, were $13,856,000 at July 31, 2008 as compared with $15,735,000 at FY end April 30, 2008.
"Among the most significant developments this past quarter was having patient enrollment underway in all 3 of the Ph.2 trials in our bavituximab cancer program and reporting encouraging positive data from the trial testing bavituximab in combination with docetaxel in advanced breast cancer patients [GA.]," said Steven W. King, president and CEO of Peregrine. "The positive data from this trial showed that we had exceeded our pre-determined criteria for proceeding to the next stage of the trial, with half of patients demonstrating partial tumor responses. We are reporting today that we have now seen additional patients with tumor responses in this trial, with 9 of the 14 evaluable patients having achieved a partial tumor response. During the quarter, we also reported data from a prior bavituximab cancer study and from our ongoing Cotara study in glioblastoma (GBM) patients at the prestigious ASCO meeting, building a promising foundation for future peer-reviewed presentations and publications from our clinical programs."
Mr. King continued, "Our bavituximab anti-viral program received a major validation during the quarter when we were awarded up to a 5-year contract potentially worth up to $44.4 million with the DTRA to evaluate bavituximab for the treatment of viral hemorrhagic fever infections. We are excited about this program, which is already well underway and which is providing us with an important source of non-dilutive cash to fund activities that we expect to be beneficial to all of our bavituximab programs."
Mr. King added, "Our Avid manufacturing subsidiary continued to expand its client base and achieved the distinction of being named the first U.S. preferred vendor for a proprietary cell line [ Crucell’s PER.C6 Cell Line, 6-25-08: http://tinyurl.com/4geqxw ] that provides important benefits to customers. Our Avid revenues this quarter were in-line with expectations, and based on our client backlog and preferred vendor status, we expect robust revenue growth from Avid over the remainder of the FY."
RECENT HIGHLIGHTS
BAVITUXIMAB ANTI-CANCER PROGRAM
All 3 initial Ph.2 trials in the bavituximab cancer program are now underway:
-- Reported positive early results from the first cohort of patients enrolled in a Ph.2 trial of bavituximab in combination with docetaxel in advanced breast cancer patients. Bavituximab achieved the pre-specified primary endpoint in stage 1 of this trial. Of 14 evaluable patients, at that time 7 had achieved partial tumor responses by the first 8 week evaluation time point and 7 had stable disease at week 8 according to RECIST criteria. None of the patients showed tumor progression during this period. Since these data were reported, another 2 patients have achieved partial tumor responses, for a total of 9 patients. The regimen was well tolerated, with adverse events similar to those expected from chemotherapy alone.
-- Initiated patient dosing in a Ph.2 trial of bavituximab in combination with carboplatin and paclitaxel in patients with advanced breast cancer.
-- Initiated patient dosing in a Ph.2 trial of bavituximab in combination with carboplatin and paclitaxel in patients with non-small cell lung cancer.
-- Presented positive data from a completed Phase I study of bavituximab in combination with chemotherapy in patients with advanced cancer at the 2008 ASCO Annual Meeting.
BAVITUXIMAB ANTI-VIRAL PROGRAM
The company continued to advance its bavituximab anti-viral program and was awarded a major government contract to assess the potential of bavituximab in viral hemorrhagic fevers.
-- Entered into a five-year contract potentially worth up to $44.4 million with the Dept. of Defense's DTRA to evaluate bavituximab for the prevention and treatment of viral hemorrhagic fever infections.
-- Continued to enroll and dose patients in an ongoing Phase I clinical trial of bavituximab in HCV patients co-infected with HIV.
-- Reported two major studies that were published in the journal Science, which highlighted the key role of phosphatidylserine (PS) in viral infections. Peregrine's bavituximab is an anti-PS agent.
-- Was awarded two patents granting Peregrine broad anti-viral method claims using a range of phosphatidylethanolamine (PE) binding agents, including PE-binding peptides attached to anti-viral agents as well as those conjugated to antibodies or other substances. These patents are a potentially valuable complement to other Peregrine anti-phospholipid programs.
COTARA(R) BRAIN CANCER PROGRAM:
Peregrine advanced the Cotara brain cancer program during the quarter.
-- Presented data from the Cotara dosing and dosimetry study at the ASCO 2008 Annual Meeting showing that Cotara concentrates in the brain tumor rather than affecting healthy organs. This data confirms a key safety attribute of Cotara -- its ability to precisely target tumors. All of the patients in the cohort presented have already surpassed the expected median survival time for relapsed GBM patients.
-- Continued to enroll and dose patients in the Ph.2 safety and efficacy trial and in the Phase I dosing and dosimetry trial in patients with GBM, the deadliest form of brain cancer.
OTHER DEVELOPMENTS
-- Avid Bioservices became the first U.S. pre-approved contract manufacturer for licensees of the DSM Biologics and Crucell PER.C6(R) cell line, a proprietary high yield cell line with important advantages over other approaches.
-- Received a Staff Determination letter from the Nasdaq Stock Market indicating that the company was not in compliance with the $1.00 minimum bid price requirement for continued listing. On September 4, 2008, Peregrine attended an oral hearing with an independent Nasdaq Panel and Peregrine requested an additional 180 days to regain compliance, or until Jan. 20, 2009. The final written decision from Nasdaq is expected within 30 days of the hearing date.
CONFERENCE CALL
The company will host a conference call today, Sept. 9, 2008 at 11:30am EDT/8:30am PDT to discuss its First Quarter FY2009 financial results.
To listen to a live broadcast of the call over the Internet or to review the archived call, please visit: http://www.peregrineinc.com. The webcast will be archived on Peregrine's website for approximately 30 days.
To listen to the conference call via telephone, please call the following number approximately 10 minutes prior to the scheduled start time and request to join the Peregrine Pharmaceuticals call: (800) 860-2442. A telephonic replay of the conference call will be available starting approximately one hour after the conclusion of the call through September 16, 2008 by calling (877) 344-7529, passcode 382933#.
ABOUT PEREGRINE PHARMACEUTICALS
Peregrine Pharmaceuticals, Inc. is a biopharmaceutical company with a portfolio of innovative product candidates in clinical trials for the treatment of cancer and hepatitis C virus (HCV) infection. The company is pursuing 3 separate clinical programs in cancer and HCV infection with its lead product candidates bavituximab and Cotara(R). Peregrine also has in-house manufacturing capabilities through its wholly owned subsidiary Avid Bioservices, Inc. (http://www.avidbio.com), which provides development and bio- manufacturing services for both Peregrine and outside customers. Additional information about Peregrine can be found at http://www.peregrineinc.com
Safe Harbor *snip*
Contacts: GendeLLindheim BioCom Partners
Investors - info@peregrineinc.com 800-987-8256
Media – Barbara Lindheim 212-918-4650
PEREGRINE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JULY 31, APRIL 30,
2008 2008
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $9,963,000 $15,130,000
Trade and other receivables 2,099,000 605,000
Government contract receivables 1,794,000 -
Inventories, net 4,628,000 2,900,000
Prepaid expenses and other current assets 1,198,000 1,208,000
Total current assets 19,682,000 19,843,000
PROPERTY:
Leasehold improvements 669,000 669,000
Laboratory equipment 4,140,000 4,140,000
Furniture, fixtures and office equipment 919,000 919,000
5,728,000 5,728,000
Less accumulated depreciation and
amortization (3,803,000) (3,670,000)
Property, net 1,925,000 2,058,000
Other assets 1,201,000 1,156,000
TOTAL ASSETS $22,808,000 $23,057,000
PEREGRINE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
JULY 31, APRIL 30,
2008 2008
Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $3,134,000 $2,060,000
Accrued clinical trial site fees 305,000 237,000
Accrued legal and accounting fees 210,000 450,000
Accrued royalties and license fees 151,000 222,000
Accrued payroll and related costs 955,000 1,084,000
Capital lease obligation, current
portion 22,000 22,000
Deferred revenue 4,021,000 2,196,000
Deferred government contract revenue 980,000 -
Customer deposits 1,898,000 838,000
Other current liabilities 336,000 331,000
Total current liabilities 12,012,000 7,440,000
Capital lease obligation, less current
portion 16,000 22,000
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock -- $.001 par value;
authorized 5,000,000 shares; non-voting;
nil shares outstanding - -
Common stock -- $.001 par value;
authorized 325,000,000 shares;
outstanding -- 226,210,617 and 226,210,617,
respectively 226,000 226,000
Additional paid-in capital 246,476,000 246,205,000
Accumulated deficit (235,922,000) (230,836,000)
Total stockholders' equity 10,780,000 15,595,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $22,808,000 $23,057,000
PEREGRINE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
July 31, 2008 July 31, 2007
Unaudited Unaudited
REVENUES:
Contract mfg. revenue $1,193,000 $1,621,000
Government contract revenue 324,000 -
License revenue - 4,000
Total revenues 1,517,000 1,625,000
COSTS AND EXPENSES:
Cost of contract mfg. 903,000 1,181,000
Research and development 4,068,000 3,624,000
Selling, general and administrative 1,706,000 1,708,000
Total costs and expenses 6,677,000 6,513,000
LOSS FROM OPERATIONS (5,160,000) (4,888,000)
OTHER INCOME (EXPENSE):
Interest and other income 75,000 239,000
Interest and other expense (1,000) (7,000)
NET LOSS $(5,086,000) $(4,656,000)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 226,210,617 206,071,568
BASIC AND DILUTED LOSS PER COMMON
SHARE $(0.02) $(0.02)
*end*
(( Orig. transcript from SeekingAlpha.com [ http://tinyurl.com/6jhhoe ], with numerous corrections made… Recall that SEEKING-ALPHA blogger Ohad Hammer wrote an interesting 9-21-07 article titled, “Peregrine Pharmaceuticals May Be On To Something”: http://tinyurl.com/2hqtkw )))
Link to webcast replay: http://ir.peregrineinc.com/eventdetail.cfm?EventID=59134
9-9-08 Q4 FY’08 Earnings Conf. Call (Q/E 7-31-08)
WELCOME & FWD-LOOKING STATEMENTS: Barbara Lindheim (IR) (BioCom Partners, NYC)
CEO Steve King – OPENING COMMENTS:
Thank you, Barbara. I'd like to start by thanking everyone who is participating in today's 1st quarter FY2009 conference call. I will start with a brief recap of developments since our last conference call. Paul will then go over the financial highlights for the quarter, and I will conclude with a more detailed review of product and corp. development activities. We will then end with a Q&A session.
The past couple of months have continued to be a very productive time at Peregrine. Since our last quarterly CC, we continued follow-up on patients in stage 1 of the bavituximab plus docetaxel Ph.2 breast cancer study [GA.]. We continued patient enrollment in a 2nd Ph.2 study [India] testing Bavi in combination with carboplatin & paclitaxel in lung cancer patients. And we recently initiated patient enrollment in a 3rd Ph.2 trial [India] testing Bavi in combination with carboplatin & paclitaxel again, this time in patients with advanced breast cancer.
We are very pleased that we now have all 3 of our initial Ph.2 bavituximab cancer trials underway. While moving our Ph.2 Bavi programs forward, we have continued patient enrollment & follow-up in the other ongoing Bavi & Cotara clinical studies. And, we have continued to make progress on the preclinical front. In addition to these clinical developments, we recently began work under our contract with the Defense Threat Reduction Agency, or DTRA, to evaluate & develop Bavi and a human equivalent antibody for the treatment and/or prevention of viral hemorrhagic fever virus infections. In addition to advancing our product dev. efforts, sales at our contract mfg. subsidiary, Avid Bioservices, continue to show positive signs of growth.
I will now turn the call over to Paul and will return later to discuss our clinical & product dev. efforts in greater detail.
CFO Paul Lytle:
Thank you, Steve. Thank you Barbara, and thank you everyone for joining us. Early this morning, we released our financial results for Q1 FY2009. This earnings release outlines the financial results in greater detail and includes financial tables, so I encourage everyone to read the entire release. We also plan to file our Form 10-Q later today and both of these documents will be available on our Web site. During the next few minutes, I will take you through our financial results for Q1 ended July 31, 2008. I will then briefly discuss our current financial position and I will conclude with a discussion covering 3 other important topics.
Now let me begin with the finical results for the first quarter starting with revenues. Total revenues for q/e July 31, 2008 were $1.5mm compared to $1.6mm for the same quarter last year. Most of the revenues were generated from third-party customers of our wholly-owned contract mfg. business Avid Bioservices. In addition, I am pleased to report that we have a new revenue line item included in our statement of operations called Gov’t Contract Revenue. This new line item will be used to report revenues under our contract with the DTRA that was recently signed on June 30, 2008. As mentioned on the previous call, this contract is potentially worth up to $44.4mm over a 5-year period with up to $22.3mm available for the initial 24-mo. base period. The contract is on a cost plus fixed fee basis whereby we are reimbursed for all allowable costs under the project, plus we receive an addl. fee for our efforts. Upon signing the contract, we immediately kicked off the project and billed DTRA approx. $1.8mm in the first month, while we are able to report earned revenues of $324,000 in the same period under Generally Accepted Accounting Principles. We have a dedicated project mgt. team devoted to the success of the project and we believe we have already made significant progress.
Now shifting to contract mfg. revenues, we are projecting another record year for Avid in FY2009, potentially topping $10mm in revenues based on current signed contracts from third-party customers. Revenues from the first quarter were in line with our expectations with most of the projected revenues expected to be recognized in the remaining 3 quarters of this FY. And this is in addition to the important manufacturing services Avid provides Peregrine in supporting our 3 ongoing clinical programs. Needless to say, Avid continues to be an important asset for the company in many ways.
Now let me turn to expenses. Total costs & expenses slightly increased by about 2.5% to $6.7mm for the current quarter. This compares to total cost & expenses of $6.5mm reported in the same prior year period. This increase was primarily related to an increase in R&D costs as we continue to advance our 3 clinical pgms. This increase was partially offset by a decrease in the cost of contract mfg. related to lower reported contract mfg. revenues in the current quarter. In addition, SG&A expenses for the curr. quarter of $1.7mm remained in line with the prior year quarter. We are pleased to keep SG&A expenses steady in light of our increased SG&A efforts and supports of a newly awarded gov’t contract and the increase in business at our Avid subsidiary.
Now onto the other income category; we saw a decrease in interest and other income of $164,000, mostly due to a lower avg. cash balance on hand compared to the same prior year period. Now let me turn to the bottom line. For Q1 FY2009, Peregrine reported a net loss of approx. $5.1mm or $0.02 per basic undiluted share. This compares to a net loss of approx. $4.7mm or $0.02 per basic undiluted share in the same prior year period. The increase in our net loss was primarily related to an increased investment in R&D of $444,000. Steve King will discuss our R&D progress in more detail later in the call.
Now let me shift your attention to the balance sheet. We ended the quarter with approx. $10mm in cash & cash equivalents at July 31, 2008. This compares to $15.1mm in cash & cash equivalents reported at our last FY-end date, April 30, 2008. Now if you look at liquid assets on the balance sheet, representing cash & receivables, we had $13.9mm in liquid assets at July 31, 2008, compared to $15.7mm at our FY-end April 30, 2008 or a decrease of approx. $1.8mm during the entire quarter. Liquid assets will be an important measure of our capital resources, representing cash on hand and assets that can quickly be converted into cash.
Now let me conclude with 3 addl. important points.
The first point I would like to address pertains to our financing efforts. We are actively pursuing 2 parallel paths to raise addl. capital. First and foremost, we are pursuing a pure-debt transaction such as a term loan. These term loans are generally paid back over a 3-year period with interest-only payments made during the initial 6 months. We are in active negotiations at the moment with potential lenders and we will continue to pursue this debt financing under the best available terms. We believe if we are successful in negotiating a pure-debt transaction, this funding could provide an addl. runway of capital as we continue to advance our programs with the intention of bridging ourselves to better market conditions and addl. positive clinical data. Our 2nd source of potential capital could come from the full or partial sale of our wholly-owned mfg. business. We have 2 major points to consider for any transaction involving Avid. These include an upfront cash payment and guaranteed access to mfg. capacity for us and for our clients. It is important to note that we have been approached by a number of parties interested in Avid and like all such transactions, these deals take time to secure the right buyer at the right terms. We will keep you apprised of any significant developments coming from these ongoing discussions.
The second topic I would like to address pertains to our continued listing on NASDAQ. On Sept. 4th, we had an oral hearing before the NASDAQ hearing panel. Prior to that hearing, we submitted to the independent panel and to our NASDAQ Listings Qualifications Staff, our definitive plans to regain compliance with the min. bid price requirement. The NASDAQ Listings Qualifications Staff, after reviewing our definitive plan submitted to the indep. panel its hearing memorandum. I am pleased to say that the staff’s hearing memorandum was supportive of our definitive plan of compliance. Further, the staff stated that it would not object if the panel granted Peregrine an exception under the rule, not to exceed 180 days from the date of the Staff Determination Letter or until Jan. 20, 2009, within which to regain compliance. If we are granted this exception from the indep. NASDAQ panel, our stock would continue to be listed and traded as normal during this exception period. As stated before, last Thursday we attended our oral hearing with the indep. panel. At that meeting, we reinforced the company’s commitment to regain compliance under our definitive plan submitted to NASDAQ by effecting a reverse stock split, should we not regain compliance by other means. We also outlined the potential events that could positively influence the company’s stock price and may contribute to regaining and/or sustaining long term compliance with the $1 min. bid price rule. We now expect a written decision from the indep. panel within 30 days of our Sept. 4th meeting. We are optimistic that we have delivered a compelling compliance plan that should allow us to receive an exception and addl. time to regain compliance. Nonetheless, I want to note that it is possible that the panel could reject our plans which could result in the suspension & delisting of the company’s securities from the NASDAQ stock market. Although we do not believe this will be the outcome, it is important for stockholders to understand the process and all potential outcomes. As soon as we receive the panel’s letter, we will issue a press release to report their decision.
The third and last topic I would like to address pertains to one component of our plan submitted to NASDAQ to regain compliance with a min. bid price requirement. Since no one can control the price of their stock, NASDAQ requires that a definitive plan to regain compliance with a $1 min. bid price rule must include a plan for a R/S. Therefore, we did exactly what was required by NASDAQ. We filed our definitive proxy on Aug. 28th, and requested shareholders to approve a R/S in the range of 3-1 to 10-1. Although there are valid reasons to support the R/S, and valid reasons to oppose it, there is one overriding reason to those in favor of the R/S. If the company is unable to effect the R/S and our stock becomes delisted from NASDAQ, our access to capital becomes immediately diminished and our cost to capital may significantly increase. Clinical trials are long & expensive, and hindering our access to capital could be devastating for the future of Peregrine and our clinical programs. Now many stockholders have asked a question, if the R/S is approved by the stockholders, what is the timeframe to implement the R/S? What I can say definitively is that a R/S would be implemented no later than 20 trading days prior to any final extension date provided by the NASDAQ panel, provided we have not otherwise regained compliance by that time under normal circumstances. We will continue to closely monitor the market conditions of our stock and the anticipated news flow, so that if we effect a R/S, we establish the best possible foundation to sustain our market cap and PPS as adjusted for the R/S. We are also optimistic that we will have access to many more institutional investors if a R/S is implemented and once this threat of delisting is removed.
I would like to thank you for your time and attention. This concludes the discussion of the financial results. Steve will now update everyone on the company’s recent achievements and our major objectives for the upcoming months...
CEO STEVE KING – ACHIEVEMENTS & MAJOR OBJECTIVES:
I would now like to go onto more detail on the company highlights I briefly mentioned earlier. We have continued to build considerable momentum, particularly in the bavituximab oncology program. This momentum has come through continuing patient enrollments and follow up in the 2 Bavi Ph.2 studies started earlier this year; and more recently, by beginning patient treatment in our 3rd Ph.2 study. Now let me provide a little more detail on these trials.
BAVI ANTI-CANCER PGM:
PHASE II BAVI+DOCETAXEL VS. MBC IN E.EUR.(GEORGIA):
We continue to be pleased with results coming out of the Ph.2 study [GA.], testing Bavi in combination with a chemotherapy drug, docetaxel in patients with advanced breast cancer. As a quick reminder, this is a 2-stage Ph.2 study. We completed enrollment in the initial set of 15 patients back in April, and since announced we had already surpassed the primary endpoint with 7 of 14 evaluable patients achieving partial tumor responses (PR) by the first evaluation time point of 8 weeks. A PR represents at least a 30% reduction in primary tumor size, with no evidence of new metastatic lesions. I am pleased to report that from continuing follow up and treatment, we now have 9 of the 14 evaluable patients who have achieved PR’s, and continue to be very happy with the follow up results we have seen today. We currently plan to give a more formal update on the first part of this trial when all the patients will have completed their 6-month chemotherapy treatment window. Having met the primary endpoint for the first set of patients, we began making preparations to expand the trial to include an addl. 31 patients. These preparations including building drug inventory, procuring chemotherapy supplies, auditing data collected as part of the trial, and oh yes, waiting for hostilities between Russia & Georgia, where the trial is being conducted, to subside. Our thoughts & prayers certainly go out to all those affected by these hostilities and we are pleased that the fighting between the 2 nations appears to have now ended and everything seems to be slowly returning to normal. The hostilities seemed to have had minimal impact on our clinical trial, with patient follow up in the study proceeding according to plan. However, we did want to make sure that before we started the 2nd stage of the study, we were confident that it could proceed without interruption. We are now ready to move to the 2nd stage of this important study and are working closely with the clinical trial sites to prepare for beginning patient enrollment. We look forward to updating you on activities in this trial and to sharing more data from this study as patient treatment and follow up progresses.
PHASE II BAVI+TAXOLCARBO VS. NSCLC) IN INDIA:
While preparing for the 2nd stage of the Bavi plus docetaxel study, we have continued patient dosing in the Ph.2 trial [India], evaluating the safety & efficacy of Bavi in combination with the chemotherapy agents, carboplatin & paclitaxel in patients with non-small cell lung cancer, the leading cause of cancer deaths in the U.S. We began enrollment in the study back in July and it has proceeded as expected with brisk patient enrollment. We look forward to updating you on progress in the trial in the near future as we complete enrollment in the first 21 patients of the study, who represent the first stage of this 2-stage study.
PHASE II BAVI+TAXOLCARBO VS. MBC IN INDIA:
Since our last CC, we also initiated patient enrollment in a 3rd bavituximab Ph.2 cancer study. This one is also evaluating the safety & efficacy of Bavi in combination with carboplatin & paclitaxel in patients with advanced breast cancer. Like the other 2 Ph.2 Bavi cancer studies, the primary endpoint is an evaluation of overall tumor response rate in patients receiving treatment. Patient enrollment in this study is also proceeding very well, and again, we look forward to updating you on progress in this trial in the near future, as we complete enrollments in the 1st 15 patients comprising the 1st stage of the study.
BAVI ANTI-VIRAL PGM:
Now turning to the Bavi anti-viral program, we announced just prior to our last CC that we had entered into a 5-year DTRA contract, potentially worth over $44mm to test & develop bavituximab and a fully human equivalent antibody as potential broad spectrum agents for the treatment or prevention of viral hemorrhagic fever infections. This contract is now successfully underway and we have already begun work and invoicing on a number of fronts for the program, including a considerable amount of work at our Avid mfg. unit. In addition to the DTRA-funded work on our antiviral program, we are continuing our clinical trial evaluating bavituximab in patients co-infected with HCV & HIV, where enrollment is proceeding at a moderate but steady pace, reflecting the strict enrollment criteria required for this initial study.
DUKE/HIV:
We are also continuing multiple preclinical collaborations in the antiviral area. In particular, our collaboration with researchers at Duke and other institutions, testing our anti-PS antibodies, continues to yield valuable insights into the potential of this technology platform in HIV. And, I am happy to report that data from this collaboration will be highlighted this fall at the prestigious AIDS Vaccine 2008 Conference to be held in Cape Town, South Africa from October 13-16. This will mark the first time that data from our collaboration has been presented and we are very pleased with the opportunity to share the information with the broader scientific community. These collaborations have allowed us to make considerable progress in understanding the potential of our anti-PS technology platform for the treatment and possible prevention of serious virus infections, and have only served to heighten our excitement over the antiviral potential of this platform.
[ Dr. Barton Haynes, AIDSVaccine’08,10-14-08: ”The Search for New Broadly Neutralizing Antibodies & Methods of their Induction: Finding a Path to Successful HIV-1 Vaccine Development” http://tinyurl.com/5newg7 ]
COTARA BRAIN CANCER PGM:
Next, I would like to turn to our Cotara brain cancer program. We have worked over the past months to strengthen the foundation for progress in the Cotara clinical program, by initiating addl. clinical sites and continuing outreach for our 2 ongoing trials of Cotara in patients with GBM. And while these activities have enhanced the number of patients being screened and other associated activities at the clinical sites, patient enrollment has continued to be modest. We will continue our efforts to move the program forward, and are working with the clinical trial sites to address the issues that have complicated patient enrollment. We will continue to closely monitor progress in the trials and to take addl. steps to speed patient enrollment for this program, which we believe has great promise in treating this devastating disease.
BUSINESS OPERATIONS - AVID
On the corporate side, the biggest advancement in our business operations has continued to be the growth of our Avid contract mfg. business. While Avid has always been and continues to be a major strategic asset for Peregrine and our clinical programs, we see significant potential in growing the value of this business unit. We are continuing to see very high levels of activity at Avid and we believe Avid has the potential to be a profitable, stand-alone business this year, while also providing valuable services to Peregrine. We look forward to updating you on further advances at Avid as the business continues to grow.
PARTNERING AND BUSINESS DEVELOPMENT
On the business development side, interest in our bavituximab, Cotara, and preclinical programs from potential partners remain strong, and is growing as a result of the data we are generating on both the clinical & preclinical fronts. We are engaged in active and ongoing discussions with a number of potential partners and we are confident that a steady flow of upcoming data from our clinical and preclinical programs will result in significant licensing opportunities.
Operator, we are now ready to open the floor for questions.
Q&A:
1. Kevin Burdick (Investor):
The market cap for the company is roughly $74mm, of which you can argue that Avid is worth roughly $45mm based on std. sales multiples, you got $10mm in cash; so that means the remaining value of about $20mm for the entire pipeline. Tell me, is the market bright; or what is going on there and if it is wrong, then what are you guys doing to educate the market that our pipeline is worth much more than $20mm, strictly without the appetite for pipelines with big pharma and big biotech?
PL: I think we clearly feel that our market cap is not representative of the true value of the company, I think you did an excellent job of breaking it into the individual units and when you really break it down and just consider the value that’s currently being given to the technology, it seems extremely depressed currently. When you consider the facts that we are generating Ph.2 data, we have some very promising things happening on the preclinical side in addition to the $44.4mm potential from the contract with the U.S. gov’t. Clearly, the overall market is down. We feel that particularly small biotech companies have been adversely affected by the overall market conditions maybe more than other sectors. I think one of the keys is getting beyond the current delisting threat and, you know, the associated activities with that. I think as we get through that, we will be able to really do a lot more outreach, and we’re obviously currently doing outreach, but really be able to step up those efforts with institutional investors. We know there is a lot of interest in the company from potential partners. Hopefully, we’ll be able to close some deals that will bring addl. cash in and again provide further outside validation, which should come on several fronts, again thru publications, hopefully some partnering deals as well as some – just generating some additional clinical data which I think is going to be very promising. I think it is perplexing the reason our stock price is depressed. We are certainly working on multiple avenues to get the word out there about the company, the promise of its technologies, and while we can’t control the stock price, there certainly are a lot of exciting things happening that we hope will drive that value in the future.
2. Ren Benjamin (Rodman & Renshaw):
RB: A couple of questions here, maybe starting off with the clinical trials. You gave us some updated results from the Ph.2 trial [GA.] with Bavi & Docetaxel, 7 out of 14 patients achieving a PR. Can you comment a little bit or give us an update as to what the duration of response has been that you have been able to achieve in those patients who have gotten a PR. And you mentioned that there would be a formal update at the 6-mo. follow up; when will that be?
SK: Basically, we are currently at 9 of the 14 patients have now achieved partial tumor responses. The formal update will come at the – it is basically a 6-month chemotherapy window for this trial. So, that 6-mo. time period - we enrolled the last patient around the middle of April, so that will be coming up by the middle of October. So, around that timeframe we should be able to give a more formal update. At that time, we’ll probably talk a little bit more about things like the duration of response, the time to see more progression and what have you. Obviously for those kind of secondary endpoints; the primary endpoint was the tumor responses, but for the secondary endpoints, you really just need more time to have the data mature and get patients out far enough for that data to start to make some sense. So we will be able to start addressing that again in the update toward the middle of October, and then obviously continue updates on those patients as we move into the 2nd part of that study, and then also we should be able to start reporting from the other 2 Ph.2 studies [India].
RB: And will that be at a scientific conference, or – how should we be looking for that update?
SK: There is potential that it could come out at a scientific presentation we have coming up around that timeframe, it will just depend on if the data is ready by then. In other words we have to do scans and then get the data and then crunch it and what have you. The alternative is that we just put out an update probably around the time of our shareholders meeting.
RB: Okay. And then, what about – since we have these updated results and you mentioned you have 9 out of 14 now at PR, how has the safety profile been looking?
SK: I think in this trial, so far it has been consistent with what you would expect with the chemotherapy alone. Again, just as we saw in the earlier pilot study. So far, obviously everyone is happy with moving into the larger 2nd part of the study. So we feel that so far it has been very acceptable.
RB: Okay. Regarding the non-small cell lung cancer trial (India], I know you only began it in July, but what has been the enrollment progress so far?
SK: Both those studies are proceeding very nicely. We are making our way very nicely - for both the breast cancer study and for the lung cancer study we’re at or past the 50% enrollment rate for both of those studies. Again, there’s a few more patients in the first part of the lung cancer study with 21 patients versus 15 in the breast cancer study. But, so far is right on – in fact tracking almost exactly with our projections for getting the trial completed. So I think over the next few weeks, we should be able to get through the initial stage of patients in both of those studies and then again provide some update as we move forward with patient follow up.
RB: So the enrollment is – for at least the 1st stage is planned to complete by the beginning of4th quarter or so, is that about right?
SK: I think we certainly want it completed – yes, by the – during this quarter.
RB: Okay. And I guess from the Cotara program, you mentioned that the patient enrollment has been modest and that you are addressing the issues that are sort of complicating enrollment. Can you talk a little bit about what those issues are and then, how you plan on addressing?
SK: Certainly. I think part of it is – the initial push was to get the number of clinical sites up to full speed and then to hopefully use that in combination with outreach to drive more patients to the screening process, because that is clearly the key in any clinical study is getting patients into screening and then the ones who make it through will eventually enter into the study. Some of the issues have been relatively specific to India and some the clinical sites. Basically to administer the drug, it requires a collaboration between the neuro/oncology and radiation/oncology groups. In some cases, that is a very smooth cooperation; in other cases we have had to really work with hospitals to bring those 2 groups together. So we worked through those sorts of issues. Some of the issues we have run across have really been specific to India; again, typically the patients are funneled in from the surrounding area. Even things like transportation, which you more or less take for granted in trials in the U.S., can become a challenge. So, we worked out systems whereby we can help the patients actually get to the hospitals for – obviously not just their treatment, but for the follow ups and what have you, and for even for the screening and making housing available and those sort of things. So it has really just been a lot of little things, in each site it’s a little bit specific if you will for their particular situation. I don’t see anything that is necessarily something that is a longer term overall concern. The efficacy of the drug is there, we believe the drug works and it is just a matter of – again, continuing to really work aggressively with the clinical sites. And so I think we are seeing a big uptick in patients coming to the screening program. It is just now a matter of getting them into the trial as a result of that.
RB: Okay. And then I guess, milestone-wise and drivers-wise, you mentioned several of course; one is the Ph.2 trial on breast cancer [GA.], an update hopefully around the November timeframe or so; you have the AIDS Vaccine Conference that’s coming up. Could you just summarize sort of sequentially all the drivers that you see for the rest of the year?
SK: Sure. I think if we kind of walk through them; so completing the 1st stage of the carboplatin & paclitaxel combination therapy studies [India] in breast & lung cancers should be coming out; an update on the docetaxel combination therapy breast cancer study [GA.] again around mid-October; around the same timeframe will be AIDS Vaccine 2008 Conference. Then we should start to be getting some significant amounts of data from the – again as we do the patient follow up in the carboplatin & paclitaxel studies, hopefully being able to move pretty quickly into the 2nd parts of those studies as we achieve our pre-established milestones. And then again, continuing follow up from those trials. We have a few other conferences we will be speaking at, and again an opportunity to highlight some more of the preclinical data. We also have a couple of preclinical publications that are in the works and I would certainly hope that those will be coming out between now and the end of the year. Those are a little harder to project because – just because of the process of submitting manuscripts and getting them accepted. But certainly we would expect there is a good potential from most of those to be out by the end of the year.
RB: Okay. And then from a burn point of view and burn guidance, the $10mm or so that you had mentioned earlier, how much longer is that supposed to last the company?
PL: The only thing we said publicly, Ren, is that we believe we have enough cash on hand, including the projected revenues coming in from Avid combined with the projected revenues from the DTRA grant, to get us through at least April 2009. Our goal is to complete financing way before that time frame this debt type transaction, that should hopefully bridge us to better market conditions and give us time to generate some of this clinical data and then we will reevaluate the financial condition at that point and our financial resources.
RB: And the Avid revenues, at least the way I had modeled it, it seems to have come in lower than what I had modeled and so I wanted to know is there some seasonality associated with it? Is it just had something to do with when the contracts are actually booked, how should we be looking at the Avid revenues that are coming in?
PL: On the (inaudible), most of our revenues come from contract mfg., not really the development services. About 80% are on the mfg. side, so it’s dependent on the number of mfg. runs that are in the works at the time.
RB: So, you believe that the number runs will increase through the remaining quarter?
PL: Absolutely. And if you look at the balance sheet right now, our inventories are up to close to $5mm and inventories, those are built up work in process inventories, most of them to be reported in the subsequent period.
RB: Okay, great.
PL: So, there is a bunch of built up manufacturing inventories that we have been working on that will be reported as revenues in the following quarter.
RB: Okay, terrific. Thank you very much guys and good luck.
PL: Thanks Ren.
3. Stephen Dunn (Dawson James):
SD: I think Ren’s one question pretty much answered everything I needed. I would just like a little color, if you will, on the Crucell PER.C6 business?
SK: Essentially that is a partnership whereby they will work with us to steer West Coast potential clients toward Avid. I think what is exciting about it from our standpoint is they’ve gotten some pretty large numbers as far as production with their cell line. And I think the net benefit from the Avid standpoint is the higher the production of the cell lines, the smaller reactors you need. And, our current top reactors are about a 1,000 liter scale, whereas the Boehringer Ingelheim companies be at the 10,000 plus liter scale, which is really not practical in our existing location here. So, I think what it opens the door for us is many more clients who, based on higher production levels, can really drive their business through us, and we can maintain their production even on to the market, which again is the key for growing a successful mfg. business. So, the collaboration is going pretty well. We’re out doing some things in collaboration with DSM as far as promoting the partnership and I think we will see some good rewards there as we go forward. Right now, we are just really extremely busy on the Avid side. Again, I think you will see a lot of these show up on the revenues in future quarters as the material is produced and then gets released. But I think it is going to be a really good collaboration for us.
4. Richard Siracusa (Merrill Lynch):
RS: Steve & Paul, just to clarify two things, regarding the reverse split, I guess we don’t have to concern ourselves about that until 20 days prior to the expiration of the extension if you get one; is that correct?
PL: What we are going to do, Dick, is we’re going to be evaluating the market conditions of the company, evaluating our news flow, anticipated future events. I mean the latest we would do it would be 20 days prior to any extension. But again, we will closely monitor the market conditions of the company where our stock is sitting to make sure that if we have to implement that reverse stock split we give it the best chance for success, and to build market cap from there.
RS: Yes, but you say you probably would not do it until 20 days before the end expiration of the extension.
PL: That would be the latest we would do it.
RS: Okay. And secondly, the AIDS conference in Africa, is that going to be a comprehensive presentation of everything that Duke has being doing?
SK: Ahhh - good question… It’s probably not a comprehensive, but it will be certainly laying out an awful lot of the story of what we’ve learned with the anti-PS platform technology. And, it’s what we think is great promise as potentially playing a role in treating or developing an AIDS vaccine. So, it’s going to be a lot of data. The bottom line is we’ve generated more data than we could possibly present in one simple presentation.
RS: Who will be presenting it?
SK: That will be presented by Bart Haynes. He is the head of the group there and obviously very well known in the HIV research area. So, there will be a lot of data presented there. But there’s a lot more coming. So, I would see really this being sort of the kick off, if you will, of a number of potential presentations & publications in this area for the program and our collaboration with Duke and the other institutions involved.
RS: Okay. Could a scientific publication precede this conference?
SK: It possibly could. And again, that’s – it’s a litter harder to predict. Once things are submitted, the review process, sometimes they sail through and sometimes they want you to make some adjustments to the manuscripts. But yes, I think there is a lot of – we’ve generated so much data, we probably have enough for quite a few future activities around it.
RS: Okay. Thank you.
Operator: This concludes today‘s Q&A session.
MR. KING’S CLOSING COMMENTS:
I would like to again thank you all for participating in this conference call and for your continuing support of Peregrine. We are optimistic that we will be successful in maintaining our listing on NASDAQ and believe that the removal of the delisting threat and continued success in our clinical and preclinical programs will enable us to build sustainable value in Peregrine. I look forward to reporting on our continuing progress at the next quarterly CC. Thank you again.
= = = = = = = =
ALL SEC filings for PPHM: http://tinyurl.com/6d4jw8
Latest 10Q 7-31-08 iss. 9-9-08: http://tinyurl.com/xxxxxx PR: http://tinyurl.com/5q9phf (Cash 7-31-08 $9.96mm)
Peregrine Pharmaceuticals Reports Financial Results for the First Quarter of FY2009
• Advances Achieved in All Clinical Programs, With 3 Bavituximab Ph.2 Cancer Trials Ongoing
• Updated Initial Data from Bavituximab Plus Docetaxel Ph.2 Breast Cancer Trial [GA.] Shows at Least 9 of 14 Evaluable Patients Achieved a Partial Tumor Response
• Company Begins Work under Contract with Defense Threat Reduction Agency Potentially Worth Up to $44.4 Million
http://ir.peregrineinc.com/releasedetail.cfm?ReleaseID=333100
TUSTIN, Sept 09, 2008: Peregrine Pharmaceuticals, Inc. (Nasdaq: PPHM) today announced financial results for the first quarter of FY (FY) 2009 ended July 31, 2008. The company reported a consolidated net loss of $5,086,000, or $0.02 per basic and diluted share, compared to a consolidated net loss of $4,656,000 or $0.02 per basic and diluted share for the same prior year period. The increased net loss primarily reflects increased investments in research and development as the company advanced its clinical programs for bavituximab and Cotara(R).
Total revenues for the current quarter were $1,517,000 compared to $1,625,000 for the comparable quarter last year and were primarily generated from services provided by Avid Bioservices, the company's wholly owned contract mfg. subsidiary. Total revenues for the quarter also include the first government contract revenues generated by Peregrine's contract with the Defense Threat Reduction Agency (DTRA), potentially worth up to $44.4 million over a period of up to 5 years to evaluate bavituximab for the prevention or treatment of viral hemorrhagic fever infections.
Total costs and expenses increased to $6,677,000 in the first quarter of FY2009 from $6,513,000 in the same prior year quarter. The increase was primarily related to Peregrine's increased investment in research and development associated with the advancement of its 3 clinical programs for bavituximab and Cotara(R) for the treatment of solid tumors and hepatitis C virus (HCV) infection. Research and development expenses were $4,068,000 in the first quarter of FY2009, compared to $3,624,000 in the first quarter of FY 2008. At July 31, 2008, the company had $9,963,000 in cash and cash equivalents compared to $15,130,000 at FY end April 30, 2008. In addition, liquid assets, representing cash and receivables, were $13,856,000 at July 31, 2008 as compared with $15,735,000 at FY end April 30, 2008.
"Among the most significant developments this past quarter was having patient enrollment underway in all 3 of the Ph.2 trials in our bavituximab cancer program and reporting encouraging positive data from the trial testing bavituximab in combination with docetaxel in advanced breast cancer patients [GA.]," said Steven W. King, president and CEO of Peregrine. "The positive data from this trial showed that we had exceeded our pre-determined criteria for proceeding to the next stage of the trial, with half of patients demonstrating partial tumor responses. We are reporting today that we have now seen additional patients with tumor responses in this trial, with 9 of the 14 evaluable patients having achieved a partial tumor response. During the quarter, we also reported data from a prior bavituximab cancer study and from our ongoing Cotara study in glioblastoma (GBM) patients at the prestigious ASCO meeting, building a promising foundation for future peer-reviewed presentations and publications from our clinical programs."
Mr. King continued, "Our bavituximab anti-viral program received a major validation during the quarter when we were awarded up to a 5-year contract potentially worth up to $44.4 million with the DTRA to evaluate bavituximab for the treatment of viral hemorrhagic fever infections. We are excited about this program, which is already well underway and which is providing us with an important source of non-dilutive cash to fund activities that we expect to be beneficial to all of our bavituximab programs."
Mr. King added, "Our Avid manufacturing subsidiary continued to expand its client base and achieved the distinction of being named the first U.S. preferred vendor for a proprietary cell line [ Crucell’s PER.C6 Cell Line, 6-25-08: http://tinyurl.com/4geqxw ] that provides important benefits to customers. Our Avid revenues this quarter were in-line with expectations, and based on our client backlog and preferred vendor status, we expect robust revenue growth from Avid over the remainder of the FY."
RECENT HIGHLIGHTS
BAVITUXIMAB ANTI-CANCER PROGRAM
All 3 initial Ph.2 trials in the bavituximab cancer program are now underway:
-- Reported positive early results from the first cohort of patients enrolled in a Ph.2 trial of bavituximab in combination with docetaxel in advanced breast cancer patients. Bavituximab achieved the pre-specified primary endpoint in stage 1 of this trial. Of 14 evaluable patients, at that time 7 had achieved partial tumor responses by the first 8 week evaluation time point and 7 had stable disease at week 8 according to RECIST criteria. None of the patients showed tumor progression during this period. Since these data were reported, another 2 patients have achieved partial tumor responses, for a total of 9 patients. The regimen was well tolerated, with adverse events similar to those expected from chemotherapy alone.
-- Initiated patient dosing in a Ph.2 trial of bavituximab in combination with carboplatin and paclitaxel in patients with advanced breast cancer.
-- Initiated patient dosing in a Ph.2 trial of bavituximab in combination with carboplatin and paclitaxel in patients with non-small cell lung cancer.
-- Presented positive data from a completed Phase I study of bavituximab in combination with chemotherapy in patients with advanced cancer at the 2008 ASCO Annual Meeting.
BAVITUXIMAB ANTI-VIRAL PROGRAM
The company continued to advance its bavituximab anti-viral program and was awarded a major government contract to assess the potential of bavituximab in viral hemorrhagic fevers.
-- Entered into a five-year contract potentially worth up to $44.4 million with the Dept. of Defense's DTRA to evaluate bavituximab for the prevention and treatment of viral hemorrhagic fever infections.
-- Continued to enroll and dose patients in an ongoing Phase I clinical trial of bavituximab in HCV patients co-infected with HIV.
-- Reported two major studies that were published in the journal Science, which highlighted the key role of phosphatidylserine (PS) in viral infections. Peregrine's bavituximab is an anti-PS agent.
-- Was awarded two patents granting Peregrine broad anti-viral method claims using a range of phosphatidylethanolamine (PE) binding agents, including PE-binding peptides attached to anti-viral agents as well as those conjugated to antibodies or other substances. These patents are a potentially valuable complement to other Peregrine anti-phospholipid programs.
COTARA(R) BRAIN CANCER PROGRAM:
Peregrine advanced the Cotara brain cancer program during the quarter.
-- Presented data from the Cotara dosing and dosimetry study at the ASCO 2008 Annual Meeting showing that Cotara concentrates in the brain tumor rather than affecting healthy organs. This data confirms a key safety attribute of Cotara -- its ability to precisely target tumors. All of the patients in the cohort presented have already surpassed the expected median survival time for relapsed GBM patients.
-- Continued to enroll and dose patients in the Ph.2 safety and efficacy trial and in the Phase I dosing and dosimetry trial in patients with GBM, the deadliest form of brain cancer.
OTHER DEVELOPMENTS
-- Avid Bioservices became the first U.S. pre-approved contract manufacturer for licensees of the DSM Biologics and Crucell PER.C6(R) cell line, a proprietary high yield cell line with important advantages over other approaches.
-- Received a Staff Determination letter from the Nasdaq Stock Market indicating that the company was not in compliance with the $1.00 minimum bid price requirement for continued listing. On September 4, 2008, Peregrine attended an oral hearing with an independent Nasdaq Panel and Peregrine requested an additional 180 days to regain compliance, or until Jan. 20, 2009. The final written decision from Nasdaq is expected within 30 days of the hearing date.
CONFERENCE CALL
The company will host a conference call today, Sept. 9, 2008 at 11:30am EDT/8:30am PDT to discuss its First Quarter FY2009 financial results.
To listen to a live broadcast of the call over the Internet or to review the archived call, please visit: http://www.peregrineinc.com. The webcast will be archived on Peregrine's website for approximately 30 days.
To listen to the conference call via telephone, please call the following number approximately 10 minutes prior to the scheduled start time and request to join the Peregrine Pharmaceuticals call: (800) 860-2442. A telephonic replay of the conference call will be available starting approximately one hour after the conclusion of the call through September 16, 2008 by calling (877) 344-7529, passcode 382933#.
ABOUT PEREGRINE PHARMACEUTICALS
Peregrine Pharmaceuticals, Inc. is a biopharmaceutical company with a portfolio of innovative product candidates in clinical trials for the treatment of cancer and hepatitis C virus (HCV) infection. The company is pursuing 3 separate clinical programs in cancer and HCV infection with its lead product candidates bavituximab and Cotara(R). Peregrine also has in-house manufacturing capabilities through its wholly owned subsidiary Avid Bioservices, Inc. (http://www.avidbio.com), which provides development and bio- manufacturing services for both Peregrine and outside customers. Additional information about Peregrine can be found at http://www.peregrineinc.com
Safe Harbor *snip*
Contacts: GendeLLindheim BioCom Partners
Investors - info@peregrineinc.com 800-987-8256
Media – Barbara Lindheim 212-918-4650
PEREGRINE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JULY 31, APRIL 30,
2008 2008
Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $9,963,000 $15,130,000
Trade and other receivables 2,099,000 605,000
Government contract receivables 1,794,000 -
Inventories, net 4,628,000 2,900,000
Prepaid expenses and other current assets 1,198,000 1,208,000
Total current assets 19,682,000 19,843,000
PROPERTY:
Leasehold improvements 669,000 669,000
Laboratory equipment 4,140,000 4,140,000
Furniture, fixtures and office equipment 919,000 919,000
5,728,000 5,728,000
Less accumulated depreciation and
amortization (3,803,000) (3,670,000)
Property, net 1,925,000 2,058,000
Other assets 1,201,000 1,156,000
TOTAL ASSETS $22,808,000 $23,057,000
PEREGRINE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
JULY 31, APRIL 30,
2008 2008
Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $3,134,000 $2,060,000
Accrued clinical trial site fees 305,000 237,000
Accrued legal and accounting fees 210,000 450,000
Accrued royalties and license fees 151,000 222,000
Accrued payroll and related costs 955,000 1,084,000
Capital lease obligation, current
portion 22,000 22,000
Deferred revenue 4,021,000 2,196,000
Deferred government contract revenue 980,000 -
Customer deposits 1,898,000 838,000
Other current liabilities 336,000 331,000
Total current liabilities 12,012,000 7,440,000
Capital lease obligation, less current
portion 16,000 22,000
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock -- $.001 par value;
authorized 5,000,000 shares; non-voting;
nil shares outstanding - -
Common stock -- $.001 par value;
authorized 325,000,000 shares;
outstanding -- 226,210,617 and 226,210,617,
respectively 226,000 226,000
Additional paid-in capital 246,476,000 246,205,000
Accumulated deficit (235,922,000) (230,836,000)
Total stockholders' equity 10,780,000 15,595,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $22,808,000 $23,057,000
PEREGRINE PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
July 31, 2008 July 31, 2007
Unaudited Unaudited
REVENUES:
Contract mfg. revenue $1,193,000 $1,621,000
Government contract revenue 324,000 -
License revenue - 4,000
Total revenues 1,517,000 1,625,000
COSTS AND EXPENSES:
Cost of contract mfg. 903,000 1,181,000
Research and development 4,068,000 3,624,000
Selling, general and administrative 1,706,000 1,708,000
Total costs and expenses 6,677,000 6,513,000
LOSS FROM OPERATIONS (5,160,000) (4,888,000)
OTHER INCOME (EXPENSE):
Interest and other income 75,000 239,000
Interest and other expense (1,000) (7,000)
NET LOSS $(5,086,000) $(4,656,000)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 226,210,617 206,071,568
BASIC AND DILUTED LOSS PER COMMON
SHARE $(0.02) $(0.02)
*end*
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