And here's one more catalyst to watch for
"Data from the rectal adenocarcinoma trial will be presented at the American Society for Radiation Oncology's Annual Meeting in October." -- Joseph Shan, VP of Clinical & Regulatory Affairs
But wait, there's more!
Although investors haven't heard much about bavituximab being investigated as a treatment for rectal adenocarcinoma, in October Peregrine should have data to share with the world. In other words, the American Society for Radiation Oncology's annual meeting is most likely the next major catalyst for Peregrine.
Keep in mind that this is an investigator-sponsored trial, so Peregrine has no final say on when the data is going to be released. But for Joseph Shan to go out on a limb and suggest that the company will have data in October demonstrates that the study is likely over or very near completion and the investigator is merely compiling or analyzing the data. Ultimately, we're not talking about a huge indication marketwise, but it would represent yet another successful step forward for bavituximab if successful.
Our contract manufacturing backlog could soar
"Just a little more information on the new facility [for Avid]. It actually more than doubled what our current capacity is in terms of space and bioreactor space that we have over there. So we do have an opportunity here to really to grow the business, even much larger than what our current backlog is." -- Paul Lytle, CFO
Lastly, no discussion of Peregrine would be complete without mentioning the strength of its contract manufacturing business, which is helping to offset some of the rising costs of its late-stage SUNRISE study.
In just a single quarter's time Avid Bioservices' backlog rose form $29 million to $40 million, which in turn allowed Peregrine to suggest guidance of $30 million to $35 million in fiscal 2016. At the midpoint Peregrine is forecasting 22% year-over-year growth for Avid -- and that may be just the beginning.
Avid has a new production facility readying to come online that will support phase 3 and commercial production, and, in the words of CFO Paul Lytle, more than double capacity. Peregrine's management noted on the call that the $11 million increase in backlog had nothing to do with the new facility, implying that Peregrine could really ramp up its backlog and reduce its cash burn in the coming years.
What's an investor to do?
As you can see, there's a lot to be excited about at Peregrine. But this excitement doesn't come without risk.
The vast majority of Peregrine's pipeline revolves around bavituximab and PS-targeting. If SUNRISE misses the mark, then serious doubt will be cast on Peregrine's remaining pipeline, even with the understanding that different cancers can respond differently to the same medication. It's a major risk that investors in this stock have to accept.
Of course, if SUNRISE meets its targets in the interim analysis, it could quickly find a licensing partner at its doorstep, and any future cash concerns would disappear.
Owning Peregrine is a gamble that I believe only extremely high-risk biotech investors should be taking at the moment.
AI
