7-16-12 Qtly CC Transcript (Q4FY’12 q/e 4-30-12)
((( Orig. transcript from SeekingAlpha.com [ http://tinyurl.com/7qtyfzy ], with numerous corrections made. )))
Link to webcast replay: http://ir.peregrineinc.com/eventdetail.cfm?eventid=115751
…STEVE KING (CEO): “The strength of this 2nd-Line NSCLC data (esp. MOS trends) in this large area of high unmet medical need has also sparked a surge in partnering discussions that has included over 15 in-person partnering meetings since that time with major players in oncology, with all discussions ongoing and addl. parties showing interest. Our goal for the program is to position ourselves, along with a potential partner, to initiate Ph3 by mid-2013, which means an EOP2 meeting by yr-end’12. It would be ideal to have a partner on board to participate in the EOP2 meeting, and we have communicated this to interested parties and they agree.”
…ROB GARNICK (HEAD/REGULATORY): “We've been working very hard and very actively on the next steps in our Bavi 2nd-Line NSCLC pgm, given the favorable data that we've seen. As you can imagine, with data like this, there are many things that we need to consider. One consideration is that, should the data continue to trend the way it is, particularly in survival, this opens a door for potential discussions around a pathway for Accelerated Approval. At this point, all options are being considered, with Peregrine working towards the most efficient path forward from a regulatory standpoint.” Q&A: “…all in all, I think the data is extremely compelling and I think it makes a really good case. Certainly, I think, I've seen a lot of Ph2 & Ph3 data, and this is as compelling Ph2 data as I've ever seen. So, I'm very comfortable proposing a meeting with the FDA for Q4’12.”
7-16-2012 Q4 FY’12 Earnings Conf. Call (q/e 4-30-12)
WELCOME & FWD-LOOKING STATEMENTS: Jay Carlson (IR) http://www.peregrineinc.com
Speakers: Steve King, Joe Shan, Robert Garnick, Paul Lytle; Q&A session at end.
CEO Steve King – OPENING COMMENTS:
It has been a transformational time at Peregrine since our last quarterly conference call [3-9-12]. Since that call, our lead clinical program, bavituximab, yielded exceptional proof-of-principle data that was announced May 21 [ 2nd-Line NSCLC http://tinyurl.com/73aeyxj ], when the trial testing bavituximab in combination with docetaxel vs. docetaxel alone was unblinded. Results from the study showed a doubling of tumor shrinkage, or tumor response, 50% improvement in progression-free survival, or PFS, and a significant trend in overall survival, or OS, in which median OS (MOS) had already been reached in the docetaxel-alone arm and a majority of patients are still alive in both bavituximab-containing arms of the trial. These data have been extremely well-received. And our internal experts, our key opinion leaders and advisors, and potential partners agree that the strength of this data strongly supports moving the program into Phase III with a similar trial design, which should give us a high probability of success.
2nd-Line NSCLC represents a large market with over 135,000 drug-treatable patients annually in the U.S., Europe, and Japan. Currently, over $1 billion annually is spent treating these patients with modest results of less than 3 mos. median PFS and 5-7 mos. MOS - clearly, an area of high unmet medical need. And based on the recent bavituximab data, we believe bavituximab has tremendous potential in this indication and is making a difference in the lives of the patients in this trial, and has the potential to give patients in the future a significant new treatment option.
The strength of this data in this large area of high unmet medical need has also sparked a surge in partnering discussions that has included over 15 in-person partnering meetings since that time with major players in oncology, with all discussions ongoing and additional parties showing interest. Our goal for the program is to position ourselves, along with a potential partner, to initiate Phase III by mid-2013, which means an end of Phase II [EOP2] meeting by yr-end 2012. It would be ideal to have a partner on board to participate in the EOP2 meeting, and we have communicated this to interested parties and they agree. With this proof-of-principal data in hand for bavi, we now have 2 Phase III-ready programs, with the other being Cotara, for which we believe we are making good progress in our ongoing Phase III discussions with the FDA.
We also have continued to expand our pipeline with a new and exciting IST combining bavi with radiation, a combination that has been very powerful in preclinical studies. Altogether, we now have 8 ongoing bavi oncology clinical studies that have the potential to yield 3 MOS results and significant updates from the other studies before yr-end. In addition, a new PS-targeting Imaging Program, which has very broad potential and, again, provides additional opportunities for data in 2012. Joe & Rob will provide more insight into our clinical development efforts and our regulatory strategy later in the call.
This has also been a transformational time for our manufacturing subsidiary, Avid Bioservices. Coming off a record revenue year, we now have an unprecedented backlog in future business from multiple parties while production capacities that now extend well into 2014, with the potential for even more demand on the horizon. Taken together, we are actively looking at options for capacity expansion that will allow us to meet the demand of both our 3rd-party clients as well as Peregrine. Paul will speak more to this during his financial discussion later in the call.
So, just to recap a few upcoming events. Spurred by the positive Phase IIb data in 2nd-Line NSCLC, we expect to have MOS results from this trial in 2H-2012, to have an EOP2 meeting with the FDA by the end of 2012, and to continue partnering discussions toward hopefully having a partner on board to participate in planning and running a Phase III trial in 2nd-Line NSCLC. We anticipate reporting MOS results from 2 addl. bavituximab Phase II studies in Front-Line NSCLC and in Pancreatic Cancer by yr-end. And, we also expect multiple data points from ongoing bavituximab clinical [IST] studies in NSCLC, Breast, Liver, and Prostate Cancers as well. In addition, there's the potential for initial data from our new Imaging Clinical Program. We are lined up for an exciting rest of 2012 and beyond. I'll now turn the call over to Joe.
JOE SHAN (VP/Clin.&Reg. Affairs) – CLINICAL TRIALS:
As you've just heard, this has been a busy time for Peregrine with our 3 randomized Phase II bavituximab trials moving towards key overall survival endpoints, expansion of our investigator-sponsored trial [IST] program, and the launch of our PS-targeting Imaging Clinical Program.
To begin, I want to take a moment now to expand on the recently announced data from the Phase II trial, in indications of 2nd-Line NSCLC. Peregrine continues to meet its pre-specified milestones as we announced top line data from our randomized double-blinded 2nd-Line NSCLC evaluating 2-dose levels of bavituximab+docetaxel vs. docetaxel placebo, which we refer to as the control-arm. This trial of patients with Phase IIIb or IV non-squamous NSCLC who failed one prior chemotherapy regimen, enrolled all patients to a standard regimen of docetaxel at 75mg/m2 throughout the 6 21-day treatment cycles. In addition, patients were equally randomized to receive placebo, 1mg/kg of bavituximab or 3mg/kg of bavituximab weekly until the disease-progression or toxicity. The primary endpoint of this trial is ORR, using the RECIST definition. Secondary endpoints include PFS, OS, and safety. First, it should be noted that an indep. data monitoring committee, or IDMC, regularly reviewed the safety data thruout the trial, and no significant safety issues or concerns were identified, with similar adverse event profiles among the 3 study arms resembling AEs, historically associated with docetaxel. And then, just a couple of months ago in May, the trial was unblinded after the IDMC determined that the primary endpoint was mature. Upon unblinding of the treatment assignments, data demonstrated a 15% and 18% ORR for the 1 & 3 mg/kg bavituximab arms, respectively, as compared to 8% in the docetaxel+placebo control arm, representing a doubling of ORR, the primary endpoint of the trial. Also the secondary endpoint of median PFS was estimated at 4.2 & 4.5 mos. for the 1 & 3mg/kg bavituximab arms, compared to 3 mos. for the control group, a 40-50% improvement. In addition, at the time of trial unblinding, another secondary endpoint, the most clinically important one of the trial, MOS, had already been reached in the ctl-arm and determined to be less than 6 mos. It is extremely encouraging that the MOS then, and even to date, has not yet been reached in either of the bavituximab-containing arms, with some patients continuing to receive bavituximab maintenance. This trial will remain open to collect survival follow-up until at least a median number of events has been reached in both bavituximab arms. The survival is a time-to-event endpoint; we do not know when the median will be reached, but do anticipate providing an update later in the year, possibly at a medical conference.
As Steve mentioned, this is a robustly designed clinical trial (in 2nd-Line NSCLC), which means we included all the known design features for minimizing bias in a trial. First, treatment was randomly assigned; 2nd, procedure & examination schedules were identical for patients in all 3 arms; 3rd, the trial was blinded to all parties involved, whether they were patients who participated, investigators who administered treatment and follow-up, central radiology reviewers who evaluated scans, or a company like ours who oversaw the entire trial. This "gold-standard design" is typically reserved for Phase III development, if even used. We however chose to conduct this rigorous design after discussion with the FDA with the goal of potentially including this trial as part of a registration package. We truly could not have expected anything more from this successful proof-of-concept trial, in which not only did the control arm produce expected results, but both bavituximab doses yielded similar, improved efficacy results as we expected going into the study, which mirrored the consistently positive trend across all efficacy endpoints that we observed in our prior single-arm studies, as well as our overall clinical experience to date with bavituximab. We have also conducted further analyses of the top line results and determined that not only were baseline characteristics well-balanced across all treatment groups, there are no subgroup differences in geography, age, gender, race, et cetera. And because of the rigorous trial design, these data have ignited a great deal of excitement within the medical community, with our clinical advisors, as well as top leaders in the field supporting advancement to Phase III. These experts all agree, with Phase II data this clear from a virtually unbiased trial, another similarly designed trial, only with more patients, will have a high probability of success, which could support product approval. We're pleased to receive this sort of validation of the work we've done and the positive attention this trial has garnered. In a moment, Rob will review for you the proactive steps we're taking to advance this program based on these promising data.
Now in addition to our trial in 2nd-Line NSCLC, we're also awaiting survival results from 2 other randomized Phase II trials of bavituximab in Front-line NSCLC, which completed enrollment last September and in Front-line Pancreatic Cancer, which completed enrollment just a short few weeks ago. We anticipate that by the end of 2012, we may have enough survival follow-up to determine our next development steps for Front-line Lung & Pancreatic Cancers. In addition, we now have 5 open ISTs examining bavituximab In Lung, Breast, Liver, Prostate, and Rectal cancers in combination with different chemotherapies or radiation treatment. These trials have the potential to generate data which directly support future company-sponsored trials and may provide additional insight into how bavituximab works.
I'm switching gears to our recently-launched Imaging Program. Our initial plan is to demonstrate that iodine-124-labeled PGN650, a first-in-class PS-targeting human antibody fragment, can image various solid tumors using PET scans. From there, several potential applications could be envisioned, including development of a companion diagnostic for selecting patients or treatments that most benefit from bavituximab therapy. Exploiting PS as a target for drug delivery, for example PS-targeting antibody drug conjugates, and possibly monitor effectiveness of standard treatments using PS exposure as a pharmacodynamic marker. We're excited about the potential of this imaging platform and hope this excitement is shared by partners, investors and those in the medical community. Now I'd like to turn the call over to Rob.
Dr. Robert Garnick (Head of Regulatory Affairs)
JOE SHAN: I guess Rob is having connectivity issues, so let me just say a couple of things about our regulatory strategy.
[JOE SHAN READS ROB GARNICK’S PREPARED REMARKS: ]
We've been working very hard and very actively on the next steps in our bavituximab 2nd-Line NSCLC program, given the favorable data that we've seen. As you can imagine, with data like this, there are many things that we need to consider. One consideration is that, should the data continue to trend the way it is, particularly in survival, this opens a door for potential discussions around a pathway for Accelerated Approval. At this point, all options are being considered, with Peregrine working towards the most efficient path forward from a regulatory standpoint. What we'd like to see in a Phase III design is something that we can basically replicate from this Phase II that we just completed, but in a larger scale.
Now with regard to Cotara, we're continuing our dialogue with the FDA with specific emphasis on the next steps for developing this novel approach to treating recurrent GBM brain cancer. The agency has been very responsive and certainly recognizes the potential importance of this novel drug candidate, and we remain positive that a mutually agreeable design can be reached. At this point, I believe that a solution can be met and if it were not able to be met, it would've been clear to all parties by now. But, having said that, these discussions do take time. And while we've come a long way, the agency knows and recognizes the unmet medical need and the potential of this novel drug candidate. And so, we remain very optimistic that we can come to a final resolution in the coming months. And now I'll turn the call over to Paul.
CFO Paul Lytle:
Shifting gears now, I'd like to spend the next few moments covering our financial strategy and related financial goals. As a backdrop, it's important to understand that we operate a hybrid business model that includes a revenue-generating contract mfg. business and an advancing drug development business. These 2 business models are incorporated into our financing strategy as they provide separate opportunities to fund our operations.
Let me first focus on Avid. Avid, our contract mfg. business, primarily provides a non-dilutive revenue source. During FY’12 (5/11-4/12), Avid generated $14.8mm in contract mfg. revenue from its 3rd-party customers, representing a record year. And we expect FY'13 to be an even better year, as demand from mfg. capacity has increased as a result of our clients' successes. This has led to our largest revenue backlog in Avid's history, with current customer commitments in excess of $30mm. And since May 1, the start of FY’13, we have received over $7 million in customer deposits to secure this future mfg. capacity. Based on the current mfg. schedule, we expect to realize the revenue from these mfg. commitments over FY '13 and FY '14.
In addition to our focus on growing Avid revenues, our next immediate focus is to secure a less-dilutive debt-financing vehicle, similar to a term loan. Recognizing the growing value in the Avid asset, and the strong clinical data in 2nd-Line NSCLC, we are pursuing a non-convertible-type loan in the range of $20-30mm. We will keep you updated as we get closer to a possible transaction.
In parallel with the above efforts, we are also focused on leveraging Peregrine's late stage pipeline as another potential source of capital. As Steve just mentioned, May 21 represented a transformational day for Peregrine and a major inflection point in the bavituximab program. As a result, partnering interest has dramatically spiked and these discussions may lead to another source of capital for the company.
In addition to the above, we will continue to share this exciting story with the investment community as we look to build more institutional ownership. Over the past few weeks, we have shared the story with 26 institutional investors and we will continue these efforts. These are truly exciting times for the company. In closing, let me say that the mgt. team is committed to pursuing each of these sources of capital as we advance our lead program into Phase III trials. We look forward to keeping you updated on our progress. And we will now open the call up for your questions.
Q&A: [21:15 mark]
1. Raluca Pancratov, for Joe Pantginis – Roth Capital Partners: [ http://www.roth.com & https://roth2.bluematrix.com/docs/pdf/BLUE.pdf ]
RP: This is Luca Pancratov in for Joe. I was wondering for the Phase II randomized [2nd-Line NSCLC] study, can you please give me a breakdown of the U.S. vs. ex-US patients?
Joe Shan: Yes, I think we haven't given a lot of color to that publicly; we're reserving that for a upcoming medical conference. But I think we have said that about half the patients came from the U.S. whereas the remaining coming from intl. sites.
RP: Is there any color you can also provide on powering assumptions for this study at all?
Joe Shan: Again, Phase II study is not necessarily designed for robustness & statistical powering. However, we do plan on providing that level of detail at a medical conference.
RP: Right. I see, I see. So I'm guessing the data is still maturing. And then probably at a medical conference, you could also provide some analysis of subgroups?
Joe Shan: Sure. And certainly in the meantime, we feel the way it’s trending gives us a high degree of confidence to advance our plans going forward, going straight into Phase III.
Steve King: The key here is that we will be able to talk more about some of the statistics behind the results as we, again, the data matures somewhat, especially, for the most meaningful endpoints, OS & PFS. I think what has come through with this is I think there is a very nice trend toward OS and the meaningfulness of that data. That’s really what's driving the partnering interest, as well as our going into our internal planning on designing the Phase III study, which we do anticipate would have OS as primary endpoint. I addition, as far as the geography goes, a few things - as we've looked at the data, there is nothing standing out about any geography or subset of patients. They all seem to be favoring at this point the bavituximab treatment arms and that's held true throughout the study. When we think about the results, it's really been clean across the board and really hasn't had any of those sort of issues where it throws a complexity in the Phase III trials. So very clean results. And again, we really look forward in the fall, where we've identified a couple of potential conferences to speak at and that will give us an opportunity to come out with a lot more color on the data.
RP: Very good. I'm glad to hear that. That's very, very helpful. So my last question is then if you were to fast-forward, let's say, can you give sort of maybe some color of how does the data stack up maybe against other drugs that are in development? We've seen PD-1 at ASCO [Merck’s anti-PD-1 antibody – see http://seekingalpha.com/article/623441-drugs-to-watch-at-asco-2012 ]. And then, could you envision any combinations or synergies there?
Steve King: Yes, a few things when we think about the comparison with the other drugs like PD-1 that have had recent clinical results, but also in general, in the drugs that enhance immune modulation and enhance immunogenicity of the tumors. I think a few things stand out. #1, we're all going after different targets. Our target is a much more upstream target. When we think about the different ways to enhance immune reactivity to the tumor, we really believe we're right at the forefront. We believe that PS is the major modulator blocking that immune reactivation. And by blocking it, then we really allow the immune system then to really fight the disease. I think importantly, the other classes of drugs, while they may more generally stimulate the immune system, there is a great potential to combine those, because if we can knock down that sort of, if you will, primary defense of the tumor, its ability to knock down the immune response, then in general, activating the immune response in addition to that may make a lot of sense. It has to be tested empirically, but I think it's just a very important point to make that we really do see a lot of combination therapy potential, again with the other modulating drugs that have had clinical development. Also, and maybe Joe can add a little more flavor to this as well, the other thing is, we feel like we've run a very robust clinical trial here. Just the very nature of the double-blinded placebo-controlled nature of this study, really meant to take away any bias from this study, has given us a really robust set of data points coming out of that. And again, with the trial itself behaving in all aspects, just as we would have hoped going into it, it really solidifies that data set. So I think we're in a great position for future clinical development. Joe, I don't know if you want to add anything?
Joe Shan: No, I think Steve summarized it very nicely. In a virtually unbiased sort of design, to see results like this. And, as were mentioned earlier in the prepared remarks, both treatment arms with bavituximab had very similar and favorable efficacy results, something we actually anticipated going to the study and it was nice to see that sort of born out.
2. George Zavoico (MLV): [ 2-8-10 coverage init: http://tinyurl.com/yech7gz ]
GZ: Getting back a little bit to what Luca said about the combination therapy, it seems to me that what distinguishes bavituximab from some of the other NSCLC and other indication drugs that are in development is the biomarker aspect. Many of those other drugs, if not most of the other drugs, are targeted to specific kinases or targets, or whatever. Whereas bavituximab seems to be more broadly applicable because Phosphatidylserine (PS) switches sides on the membrane fairly uniformly. So my first question is, is that pretty much the correct assumption for bavituximab? And secondly, do you see this as bavituximab potentially leading to triple therapy with docetaxel, bavi and perhaps a targeted agent where the efficacy might even be further improved?
Steve King: That’s something about the program internally, that’s exactly how we think about it. Again, this is unselected patient population in the 2nd-Line NSCLC trial, which I think has a big benefit because, you're right, in the future it gives you so many different treatment combination potentials, that it's going to have the broadest potential use in the marketplace. I think that's something that has really played well with potential partners, because many of them will already have drugs in oncology, and the potential to combine with those drugs in many different treatment modalities is a huge benefit. Thinking down the road, ideally to combine a drug with a good safety profile like bavituximab with other targeted therapies, where you really can even get 2 or 3 different combinations, but they're really going to attack the tumor in different ways could be very powerful as the program continues to mature. So yes, absolutely, we view this as a major positive for the program that we don't have to preselect patients, so we really can do almost all comer-type studies and get these sort of results, and so I think that's a huge benefit going forward.
GZ: In that regard, one of the patient populations in lung cancer that have proven to be extremely difficult to treat are the squamous cell population. Please remind me if those were included in the trial or not? I don't recall offhand.
Joe Shan: They were not included in the 2nd-Line trial in which we recently reported results. We did have a handful of patients in an earlier Phase II clinical study, which included both squamous & non-squamous NSCLC patients. What we saw there was a generally good safety profile. We did have one patient that was having actually a very robust antitumor response. Unfortunately, in the squamous patient population, many of the tumors grow right around central arteries, making them very brittle as you have anti-tumor effects. And unfortunately, that patient did have an event of bleeding associated with that tumor regression and the fragility of the blood vessels. So, it's just a patient population we've stayed from; we've been very intrigued by it because, again, we did see some very nice anti-tumor effects. The question that we'll need to address, that others have been trying to address, is how do you get the good anti-tumor effect and stay away from some of the toxicities that can be associated with just basically doing away with the tumor. But, that's certainly one that we would, in the future, definitely plan on going back into. It's just that at the time of development, it didn't make sense to put high-risk patients that might have these sorts of events when we're still trying ourselves to understand the safety profile. But now that we've gotten a much larger safety database of patients that have been treated, we probably can go back and really revisit that. Those are exactly the kind of studies that would be important to work with a partner on how do you approach it and what kind of a tack do we take.
GZ: And finally, I have a question about the radiation therapy combination or post-radiation. The rationale for that is that the radiation itself flips the PS from the inside to the outside. So presumably you end up with a target that's far more available, I suppose. Is that the basic rationale?
Steve King: Yes, that's pretty much what the total rationale is. In fact, we know from pre-clinical studies that radiation is probably the most potent inducer of PS exposure. At that point, it's kind of the same concept we have with chemotherapy in that the stg. treatment causes more PS exposure, we get more drug exposure, more antibodies that applies to the tumor and you get really what are nice synergistic anti-tumor effects based on that. So again, same theory. Tumor therapy is doing what they do, which is kill cells and then bavituximab blocking that PS-induced immune-suppression, and when you turn that off you get a really powerful combination.
GZ: Finally, a quick question for Paul. The $7 million that was deposited [Avid], please tell me how that's recognized or not recognized? I guess it's recognized when that particular run gets done? And in the meantime, where is it placed on your balance sheets? Or on your statements?
Paul Lytle: All these dollars were received after our FY’12 yr-end, so it's not included in our current cash position that we've just reported. We would record that as cash and then we would offset that with a customer deposit or deferred revenue. We will realize those revenues, as you said, when we manufacture the drug and ship it to the clients. At that time, we recognize revenue from those deposits.
3. Charles Duncan (JMP Securities): [8-30-11 coverage init: http://tinyurl.com/3crdwqz ]
CD: …Congrats on the nice data in 2nd-Line NSCLC recently. A couple of questions with regard to logistics. It seems like you're counting on an EOP2 meeting in Q4. It would make sense to me that you would conduct that meeting with the agency following the overall survival. So, my question is do you have pretty good line of sight on when that could that occur or have you actually requested a meeting with the FDA for a certain time? What's really the logistics on scheduling that meeting?
Steve King: I'll give a first shot at this and if Rob has been able to reconnect, he can add some color. Basically, with EOP2-type meetings, you request about 60 days in advance of the date in which you want to have the meeting. So obviously, we haven't requested that meeting just yet, and we certainly want to let the data mature a little bit. The key is, the more data you get on overall survival, the more comfortable you are with what the trends are, with what the statistics are around that data set and then that's really what's you're going to use to plan out the Phase III trial, particularly if you have overall survival, of course, as a primary endpoint. So, the more we let the data mature, obviously the better, the more comfortable we get, or the more secure we can be, in our assumptions going in. Having said that, we don't need to wait even until we necessarily reach MOS to know how the data is trending up to that point. Obviously, we have access to the entire data set. It's an ongoing update, in which patients are periodically all getting updated on their status and how they're doing in the study. So our thinking, and certainly I think the feedback we've had from potential partners is that right now, there's an enough data to really start to think seriously about what that trial would look like, what the trial design would look like, some of the bells & whistles that would probably be added into the study. So, I don't think that actually reaching the MOS is necessarily getting factor at this point. And in fact, of course, the longer that goes out, the better it is for our development, as well as, of course, for the patients that are in the study. Again, we're getting more and more secure in the data. I think we're very, very happy with the way it's trending with the survival trends and I think it's going to allow us to really develop a very nice overall trial design that we think again, will have a very high probability of success when we run it. Rob, if you are online, we have to have comments from you or Joe.
Robert Garnick: I apologize, everyone. Just at the second that I was supposed to speak, I lost the ability to hook up, so I apologize for that. But to Steve's point, I think we have more than enough data right now to initiate a meeting with FDA. I think as the data matures and the longer it runs out, we'll even have potentially better information. But, with respect to an EOP2 meeting to plan for a Phase III, I think we're really in a very excellent spot right now. And I think we know exactly what we're going to recommend for a trial design for Phase III. And of course, as Steve said, having a partner on board, because this is undoubtedly will be a global trial, we would like to have a partner's input into that information in order to provide that. But all in all, I think the data is extremely compelling and I think it makes a really good case. Certainly, I think, I've seen a lot of Phase II & Phase III data, and this is as compelling Phase II data as I've ever seen. So, I'm very comfortable proposing a meeting with the agency for the 4th quarter of this year. Back over to you, Steve.
CF: Steve, that makes sense to me. That clarifies what the gating factor is. Question regarding the partnering meetings. First of all, thanks for letting us know that you've had several, I think 15 you said. Are you willing to characterize whether or not these are with large pharmaceutical partners and if you prefer a U.S.-only deal, or a worldwide deal, or a non-U.S. deal? And then finally, are they with partners who are mostly oriented to chemotherapies, say, in lung cancer? Or partners who are actively pursuing or have pursued in the past immunotherapy in lung cancer?
Steve King: I would characterize most of the meetings we've had have been with large pharmaceutical-type companies that are active in the oncology space. Of course, many, if not all, of these companies would have had chemotherapy-type agents in development. And ideally, we want a partner with some biologics experience. And so I think a majority of the potential partners have some sort of biologics experience in the space as well. As far as what we're thinking about in a partner here is really focus as much as possible to maintain U.S. rights where we can. It may be somewhat impractical to maintain all U.S. rights and still get the partner and the deal terms you want. But, it certainly is our goal, and at the very least we'd like to have some sort of a co-promotion at the end of this so we still have a significant upside in the future to look to as we continue to hopefully expand the indications in which bavituximab can be used and to pursue the 2nd-Line NSCLC aggressively. Most of the parties are multinational. We are speaking with some companies that are more focused outside the U.S. as well as really trying to round out our strategy and get the right partner that will help us to achieve our goals.
CD: OK, that's helpful. Cotara, any sense as to timing? I know that it's been in the works for quite some time. But, is there a work-to date? And maybe not a date but a rough order of magnitude of when you'd expect that to be put to bed?
Steve King: Our goal is - obviously these are iterative experiences and so we're sharing ideas and addressing particular concerns or questions the FDA may have. So far, the discourse has been very effective. Our goal here is, certainly over the coming few months, to complete the negotiation and be in a position where we can really have a full package together and hopefully go out and find a partner for the Cotara program, and that's kind of where our current focus is. With the quality of the data coming out of the bavituximab program, clearly that's a big effort and we certainly want to maintain a very active profile with that drug. What that does is really point us toward, again, identifying what that package looks like, including the Phase III trial design, number of patients and what have you, and then going out and finding a partner for that program. Certainly over the next few months, we should be able to hopefully wrap this up the way things are going and then, again, I think in a great position from partnering standpoint.
CD: Final question for Paul. Along the lines of monetizing the mfg. revenues and possibly doing some sort of transaction against them. Are you thinking a non-recourse-type loan or something like that? And then do you have a goal date for getting that completed?
Paul Lytle: Our goal is to pursue this type of non-dilutive or less-dilutive type funding and it'll be some type of term loan or structured debt deal that are generally interest-only for a period of time and then principal & interest for a period of time after that. There are different ways to structure these deals. Sometimes they might have a slight warrant coverage component to them and sometimes they don't. In terms of our goal to close a structured debt deal, these deals typically take up to a couple of months to complete, and I can say that we are actively pursuing this option right now. So, I think we'll have something more to say before the next earnings call, which is in the mid-September timeframe.
MR. KING’S CLOSING COMMENTS:
I'd like to start by thanking all of you for participating in today's conference call. I'd also like to thank the patients that have enrolled in our clinical studies. They certainly represent the patients we strive to develop effective therapies for and I think we have some wonderful opportunities here in NSCLC, as well as brain cancer from our 2 different clinical programs. With that, I hope you all, from what you've heard today, share our enthusiasm for the future of the company, the near-term milestones coming up, and we look forward to reporting on those to you as we achieve them in the near future. Thank you again.
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Latest 10K 4-30-12 iss. 7-16-12: http://tinyurl.com/79o57b2 PR: http://tinyurl.com/c8nytow (Cash 4-30-12 $18.0mm)
Latest 10Q 1-31-12 iss. 3-9-12 http://tinyurl.com/7h352ks PR: http://tinyurl.com/7z9qh23 (Cash 1-31-12 $19.8mm)
ALL SEC filings for PPHM: http://tinyurl.com/6d4jw8
F. Phase IIb Bavi+Doce vs. 2nd-Line NSCLC (randomized, double-blinded, placebo-controlled, n=120, 'registrational')
Protocol: http://clinicaltrials.gov/ct2/show/NCT01138163 (24 U.S. + 15 India + 2 RepGA + 7 RussianFED + 5 Ukraine = 53 as of 8-12-11)
...Also listed in: India's CTRI registry ctri.in#2191 (12 sites a/o 3-20-11)
6-2011 WJCO article lists 2ndLine NSCLC hist. results (Doce/Tarceva/Pemetrexed) http://tinyurl.com/7jdtpto
. . . . .see pg.266, 2ndLine comparator results: ORR=6.7-9.1%, PFS=2.2-6.0mo, MOS=5.7-8.3mo
…7-16-12 QTLY. CONF. CALL - COMMENTS ON 2ND-LINE NSCLC PROGRAM... http://tinyurl.com/cs7spbz )
……Steve King 7-16-12: "The strength of this data (esp. MOS trends) in this large area of high unmet medical need has also sparked a surge in partnering discussions that has included over 15 in-person partnering meetings since that time with major players in oncology, with all discussions ongoing and addl. parties showing interest. Our goal for the program is to position ourselves, along with a potential partner, to initiate Ph3 by mid-2013, which means an EOP2 meeting by yr-end'12. It would be ideal to have a partner on board to participate in the EOP2 meeting, and we have communicated this to interested parties and they agree."
……Rob Garnick 7-16-12: "We've been working very hard and very actively on the next steps in our Bavi 2nd-Line NSCLC pgm, given the favorable data that we've seen. As you can imagine, with data like this, there are many things that we need to consider. One consideration is that, should the data continue to trend the way it is, particularly in survival, this opens a door for potential discussions around a pathway for Accelerated Approva0l. At this point, all options are being considered, with Peregrine working towards the most efficient path forward from a regulatory standpoint." Q&A: "…all in all, I think the data is extremely compelling and I think it makes a really good case. Certainly, I think, I've seen a lot of Ph2 & Ph3 data, and this is as compelling Ph2 data as I've ever seen. So, I'm very comfortable proposing a meeting with the FDA for Q4'12."
…7-12-12 CEO Steve King, JMP-Conf/NYC ( http://tinyurl.com/csdclwb )
……Steve King: "Re: 2nd-Line/NSCLC trial, the most thrilling thing is the fact that, even though we'd reached MOS for the ctl-arm(Doce) at end of Apr'12 of LESS THAN 6MOS, the majority of patients are still alive (today) in both Bavi arms, and we expect that to continue for some period of time still. Ph3 planning is underway already; our goal is to start this Ph3 by mid'13, meaning an EOP2 meeting with the FDA in Q4'12; our goal is to bring a partner on board, ideally in time for that EOP2 meeting, certainly before the beg. of the Ph3 trial."
…5-21-12: TopLine data n=117 for Bavi/3mg+Doce arm: ORR=17.9%/PFS=4.5mos (vs. CTL 7.9%/3mos) http://tinyurl.com/73aeyxj
......Importantly, MOS for CTL-arm "< 6 mos", but not yet reached in both Bavi arms.
...10-6-11: Enrollment complete. http://tinyurl.com/3m9re39
...7-14-11/CC: Enrollment was taking longer than expected; have amended protocol; expanding to ~45 sites, expect enroll. comp. "early in Q4/2011", data unblinding 1H'12. http://tinyurl.com/6k6y2as
…3-17-10/Roth, CEO S.King: "We refer to this trial as a Registrational Phase II Study, because we believe that if we have results anywhere near approaching what we saw in the earlier [India] study, it could be a conduit for Accelerated Approval."
...6-4-10: Ph.2b randomized reg. trial Open for enrollment: http://tinyurl.com/25v22qk
……"up to 120 refractory patients at ~30 clinical sites; goal: fully-enroll by mid'11, topline data by y/e'11."