Peregrine Announces Measures to Reduce Costs, Facilitate Profitability and Strengthen its Operations
GlobeNewswire•August 11, 2017Comment
Reductions in R&D, manufacturing and administrative personnel
Anticipated annual cost savings of over $7 million
TUSTIN, Calif., Aug. 11, 2017 (GLOBE NEWSWIRE) -- Peregrine Pharmaceuticals, Inc. (PPHM) today announced that it has reduced its overall workforce by 60 employees (or 20%) as part of its series of planned strategic actions to reduce costs and better position the Company to achieve overall profitability while it pursues strategic options for its research and development (R&D) assets. The Company expects the workforce reductions to result in a net cost savings of between $3.7 million and $4.3 million in fiscal year 2018 and more than $7 million in reduced annualized operating expenses beginning in fiscal year 2019.
As part of the cost saving initiatives, the Company reduced Peregrine’s R&D personnel by 50% to 11 employees, with the remaining staff supporting potential strategic alternatives for its R&D assets while continuing to assist with collaborative trials, the antibody discovery platform, and the exosome program. Personnel supporting the Avid Bioservices CDMO business, a wholly owned subsidiary of Peregrine Pharmaceuticals, was reduced by 20% to 184 employees to align operations with the reduction in forecasted revenues. In addition, selling, general and administrative (SG&A) personnel was reduced by 8% to 49 employees as the Company continues to pursue leaner support operations. The charge to earnings for these personnel reductions will be between $1.1 million and $1.7 million, all of which is expected to be incurred during the second quarter of fiscal year 2018.
“While this was a difficult decision, our board and management team believe it was a necessary step as we continue to evaluate strategic options to further strengthen our two distinct businesses and seek to maximize shareholder value,” said Steven King, president, chief executive officer and director of Peregrine and president of Avid Bioservices. “I would like to personally express my appreciation to the affected employees for their commitment and meaningful contributions to the Peregrine and Avid businesses. We remain committed to capitalizing on long-term opportunities available to our CDMO business and pursuing the best path forward for our R&D business.”
Last month, Peregrine announced that as part of its strategic review it intends to expand its board of directors to add new members with CDMO and biologics experience and to commence a search for a dedicated president to head its Avid CDMO business.
About Peregrine Pharmaceuticals, Inc.
Peregrine Pharmaceuticals, Inc. is a biopharmaceutical company committed to improving the lives of patients by delivering high quality pharmaceutical products through its contract development and manufacturing organization (CDMO) services and through advancing and licensing its investigational immunotherapy and related products. Peregrine's in-house CDMO services, including cGMP manufacturing and development capabilities, are provided through its wholly-owned subsidiary Avid Bioservices, Inc. (www.avidbio.com), which provides development and biomanufacturing services for both Peregrine and third-party customers. The company is also working to evaluate its lead immunotherapy candidate, bavituximab, in combination with immune stimulating therapies for the treatment of various cancers, and developing its proprietary exosome technology for the detection and monitoring of cancer. For more information, please visit www.peregrineinc.com.
About Avid Bioservices, Inc.
Avid Bioservices, Inc., a wholly owned subsidiary of Peregrine Pharmaceuticals, provides a comprehensive range of process development, high quality cGMP clinical and commercial manufacturing services for the biotechnology and biopharmaceutical industries. With over 20 years of experience producing monoclonal antibodies and recombinant proteins in batch, fed-batch and perfusion modes, Avid's services include cGMP clinical and commercial product manufacturing, purification, bulk packaging, stability testing and regulatory strategy, submission and support. The company also provides a variety of process development activities, including cell line development and optimization, cell culture and feed optimization, analytical methods development and product characterization. For more information about Avid, please visit www.avidbio.com.
