Avid Bioservices Inc (CDMO)

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Peregrine Results Reaffirm On-Track Revenue Projection (PPHM) By Shobhit Seth | September 9, 2016 — 10:00 PM EDT

Peregrine Pharmaceuticals Inc. (PPHM) released its quarterly earnings data for the first quarter of fiscal year 2017 which ended on July 31, 2016. The company reported a drop in consolidated net loss attributable to common stockholders at $0.05 per share, compared to $0.08 per share a year before. Total revenues dropped to $5,609,000 compared to $9,671,000 for the same quarter of the last fiscal year. (For more, see: 3 Keys to Success for Peregrine Pharmaceuticals.)

Recent Results
Revenue decline was attributed to a delay caused at a third-party testing lab, which pushed the revenue recognition to the second quarter. As the impact of the delay recedes, the projected revenues for the remainder of this fiscal year are expected to improve. The company expects to generate more than $20 million in the second fiscal quarter, and remains on track to hit revenues of $50 – $55 million for full year 2017.

The company managed to save significantly on total costs and expenses. The decline in costs towards preparation of commercial manufacturing of bavituximab, and a reduction in research and development expenses for the Phase III SUNRISE trial allowed total costs to fall to $16,691,000, compared to $23,425,000 for the first quarter of FY 2016. Bavituximab is an investigational chimeric monoclonal antibody, which has been granted fast track designation by the U.S. Food and Drug Administration for the potential treatment of second-line non-small cell cancer. (For more, see: Spotlight on Peregrine's Bavituximab Expansion.)

The company reported progress in its proprietary R&D pipeline, and achieved two major milestones. It secured grants from the National Comprehensive Cancer Network (NCCN) to support bavituximab clinical research. The NCCN collaboration will help Peregrine achieve cost efficiency in its bavituximab clinical program, and the awarded grants will help it advance its research and clinical trials for head and neck cancer, glioblastoma, and hepatocellular carcinoma, a type of liver cancer. The trails are expected to commence early 2017.

It also reported acceptance by the European Society of Medical Oncology Congress (ESMO) for presentation of its top-line data from the Phase III SUNRISE trial in October. The company continues to expand on its biomarker analysis with an aim to identify biomarker patterns for maximum benefit from a bavituximab-containing therapeutic treatment. The ESMO presentation will be an opportunity to present the ongoing biomarker analysis and related data which will help the company expand its footprint in the initiative. (For more, see: Small-Cap Biotech Stocks to Watch.)

Future Guidance
Avid Bioservices, a wholly-owned subsidiary which provides development and biomanufacturing services for both Peregrine and third-party customers, continues to see increased demand for services. To enhance Avid’s manufacturing capacity, Peregrine plans to start a third clinical manufacturing facility by mid-2017.

The production revenue backlog currently stands at $71 million, and is expected to get recognized till end of fiscal year 2018, indicating the healthy revenue pipeline.

In technical collaboration with the University of Texas Southwestern Medical Center, Peregrine continues to expand into cancer detection and monitoring applications through its proprietary exosome technology. The complementary stream is expected to add to revenues in coming quarters.

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