Avid Bioservices Inc (CDMO)

[cjgaddy]

There’s a button to email Adam Feuerstein on TheStreet.com – you click his name at the top, and you’ll see “Email Adam”:
http://www.thestreet.com/story/11681138/1/biotech-stock-mailbag-rexahn-vertex-peregrine-sarepta.html

I clicked it, and told him about my problem about not being able to get my comment to show up, and then copied in my comment (scaled back to Facts Only – I dropped my opinion of his deceptive tactics, for example)… I’ll be darn if he didn’t respond – he didn’t address my unveiling his deceptive statement, “the shareholders had no idea Peregrine was selling all this stock unless they read through SEC filings”, but he did say this:

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From: Adam Feuerstein Sent: Friday, August 31, 2012 7:29 PM To: cjgaddy
Subject: Re: Article Comments
Wow. You're an enabler. Why?

From: Adam Feuerstein Sent: Friday, August 31, 2012 7:30 PM To: cjgaddy
Subject: Re: Article Comments
By the way, the ATM is still active. How do you think mgmt is going to pay back the loan?

MY REPLY 8-31-12 7:53pm:
AF, I really don’t know which astounds me more about you - your ignorance or your lack of honesty.
No problem, it won't stop Peregrine from easing the misery of people stricken with dread diseases when Bavi is approved.
No more direct contact with you. If you choose to reply, I'll ignore you.
-CJ

AF’S FINAL REPLY:
From: Adam Feuerstein Sent: Friday, Aug. 31, 2012 7:54 PM To: cjgaddy
Subject: RE: Article Comments
good luck, cjgaddy. truly sorry for your inevitable losses.
adam
Adam Feuerstein - Sr. Columnist, TheStreet
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My Comment:

Adam Feuerstein, I think what you wrote in the “Mailbox” today about Peregrine’s now-defunct ATM vehicle saying that “shareholders had no idea Peregrine was selling all this stock unless they read through sec filings” is simply not true. Let’s review the facts….

In today’s article job, 8-31-12, “Biotech Mailbag: Rexahn, Vertex, Peregrine, Sarepta”, you made this statement:
http://www.thestreet.com/story/11681138/1/biotech-stock-mailbag-rexahn-vertex-peregrine-sarepta.html “The most egregious example I've come across recently was Peregrine, which diluted shareholders by 41% in the most recent fiscal year. A large majority of the 31 million (!!) shares sold by Peregrine were through an opaque ATM facility. SHAREHOLDERS HAD NO IDEA PEREGRINE WAS SELLING ALL THIS STOCK UNLESS THEY READ THROUGH SEC FILINGS -- something every investor should do but few get around to.”

Just not true, Adam.
I’m a shareholder, and Peregrine’s ATM was made very clear & transparent from the outset in 3-2009 until it was terminated in 7-2012 – see below.

FACTS: Peregrine’s ATM fundraising facility, NOW DEFUNCT, warrantlylessly raised $89,674,000 from 3-2009 thru 6-2012 at an avg. price of 1.73/sh (51,785,558sh) to get the Bavituximab program thru its early-state trials to the current inflection-point (doubling MOS in 2nd-Line NSCLC in a randomized, placebo-ctl’d n=121 Ph.2B trial, partnership/Ph3 imminent) without giving away the technology.

Recall that Patrick Crutcher of BioMedReports, back when he was Long before he was Short, said this about the ATM in 1-2011, “PPHM entered into an ATM with MLV to the tune of $75mm. We view this deal positively, since it allows them to raise capital as share price increases and it is not selling them at a discount to a fund.” ( http://biomedreports.com/2011011162299/peregrine-poised-for-growth-in-2011.html ).

Anyway, back to your statement => “Shareholders had no idea Peregrine was selling all this stock unless they read through SEC filings.”

Nothing could be further from the truth – plain & simple.

Peregrine’s ATM has been discussed extensively by CFO Paul Lytle in Peregrine’s Qtly Conference Calls – see below. They made it extremely Transparent, not just the running figures, but Why they were using it, and when the right time to End It was (July 2012).

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3-12-09 Qtly. Conf. Call (King/Lytle/Shan) Transcript http://tinyurl.com/cwyo6f
CFO: In addition to these sources of capital, in order to support our clinical pgms and the expansion of those pgms based on the promising data we have already seen, we are evaluating various options to supplement our revenues while pursuing those partnering opportunities. As we consider which options to pursue, one of the options we are assessing is a financing vehicle that will allow us to sell small blocks of shares of common stock at market prices. This is key, selling shares at market, and in addition to this, without issuing a single warrant. We have seen this financing model in action, and it appears to be the most cost-effective way to supplement our other sources of capital. This model is not designed to raise large amts. of capital, but should allow us to augment our rev. stream as market opportunities arise. At a time in the Co’s history, when positive clinical data continues to build, we must ensure we have the necessary resources to advance these clinical products – products we believe have great potential.

7-14-09 Qtly. Conf. Call (King/Lytle/Shan) Transcript http://tinyurl.com/nt4zql
CFO: Third, we entered into an at-the-market [“ATM”] issuance in March 2009, whereby we were able to sell shares of our common stock at market prices, and this is key, selling shares at market prices and without issuing a single warrant. This is a very cost-effective financing vehicle, and we have been successful in raising $7.5mm in gross proceeds under this vehicle, of which $600,000 in gross proceeds was raised during FY’09. . . Along with the shelf registration statement, we plan to enter into another at-the-market issuance agreement [“ATM”] that will allow us to sell small blocks of shares of common stock at market prices as market opportunities arise. A couple of key points to remember is that this arrangement will allow us to sell shares at market prices and in addition to this without issuing a single warrant. We now have firsthand experience with this financing vehicle, and it allowed us to raise $7.5mm in gross proceeds during key market opportunities. In fact, our price per share rose 102% from the time we entered into the agreement to the time we were able to raise the $7.5mm in gross proceeds. At a time in the company’s history when positive clinical data continues to build, we must ensure we have the necessary resources to advance these clinical products - products we believe have great clinical & commercial potential.

9-3-09 Qtly. Conf. Call (King/Lytle/Eso/Shan) Transcript http://tinyurl.com/nuykr2
CFO: Now, let me shift your attention to the balance sheet. We ended the quarter [7-31-09] with $12.8mm in cash & cash equivalents. During the quarter, we were able to strengthen our cash position with net proceeds of $6.6mm under our At-The-Market issuance agreement [ 3-27-09: http://tinyurl.com/c73btg ], whereby we sold shares of our common stock at market prices and without issuing a single warrant.

12-10-09 Qtly. Conf. Call (King/Lytle/Eso/Garnick) Transcript http://tinyurl.com/yakx4mp
CFO: Over the past few quarters we have been able to do this by closely matching our capital needs with our capital resources by increasing revenue and by raising addl. capital under our At-The-Market issuance agreement [ 3-27-09: http://tinyurl.com/c73btg ]. This financing vehicle allows us to raise addl. capital when market opportunities arise by selling shares at market prices and without issuing a single warrant. During the current quarter, we have raised $5.2 million in net proceeds using this mechanism and these shares were sold at an average selling price per share of $3.78.

3-11-10 Qtly. Conf. Call (King/Lytle/Shan/Eso) Transcript http://tinyurl.com/yl4befh
CFO: Over the past 3 quarters, we have been able to closely match our capital needs with our capital resources through a mixture of increasing revenue and by raising additional capital through the equity markets. We have successfully increased our cash position during each of the past 3 quarters by raising addl. capital when market opportunities arise through a financing vehicle called an At-The-Market-Issuance program. Under this vehicle, we are able to sell shares at market prices and without issuing a single warrant, again as market conditions permit. During the current quarter, we were able to raise $6.1mm in net proceeds using this vehicle. 4

7-14-10 Qtly. Conf. Call (King/Garnick/Shan/Eso/Lytle) Transcript http://tinyurl.com/3a4p66c
CFO: Over the past 4 fiscal quarters, we have successfully increased our cash position by closely matching our capital needs with our capital resources. We have raised addl. capital when market opportunities arise through a financing vehicle called an At-The-Market, or ATM, issuance program. Under this vehicle, we are able to sell shares without a discount to market and without issuing a single warrant. During FY2010 [May’09 – Apr’10], we were able to raise over $26 million in gross proceeds using this vehicle and the shares were sold at an average price per share of $3.51.

9-9-10 Qtly. Conf. Call (King/Eso/Lytle) Transcript http://tinyurl.com/8megkre
CFO: Over the past several quarters, we have closely matched our capital needs with our capital resources and we are investing in our clinical programs to drive our future success which we believe are the most important and significant potential value drivers for Peregrine.

12-9-10 Qtly. Conf. Call (King/Shan/Eso/Lytle) Transcript http://tinyurl.com/23kassc
CFO: Beyond these 2 sources of capital [Avid & Gov’t], we have raised addl. capital through the equity markets and it’s important to note that over the past 3 years we have sold every share at market prices [ATM] without warrants, without discounts.

3-11-11 Qtly. Conf. Call (King/Shan/Thorpe/Lytle) Transcript http://tinyurl.com/4p4hqr5
(not mentioned specifically)

7-14-11 Qtly. Conf. Call (King/Shan/Garnick/Masten/Eso/Lytle) Transcript http://tinyurl.com/6k6y2as
CFO: During FY 2011, we had several sources of capital, including $8.5 million in contract manufacturing revenue from Avid, $5.6 million from govt sources, and from the capital markets, we raised over $33 million in net proceeds over the last FY under a cost effective and warrant-free financing vehicle called an At-the-Market, or ATM program. And as the name implies, we are selling these shares at market prices. We have used this vehicle to bring institutional investors into our stock.

9-9-11 Qtly. Conf. Call (King/Garnick/Shan/Lytle) Transcript http://tinyurl.com/3bx8eat
CFO: In addition to the revenues generated from Avid, we also look to the capital markets. And although the overall market conditions over the last several months have not been favorable, we were able to raise $3.7mm during Q1 under our cost-effective and warrant-free financing vehicle called At-The-Market, or ATM, program. And since the end of Q1 [7-31-11], we raised an addl. $9mm in gross proceeds, including $7mm placed to 3 institutional investors in a warrant-free registered direct offering, further strengthening our balance sheet as we fund our investments in our advancing pipelines. Also, this transaction increased our institutional ownership from 20% to approx. 26% and we will continue to target new institutions as we approach our upcoming milestones.

12-12-11 Qtly. Conf. Call (King/Shan/Lytle) Transcript http://tinyurl.com/75rfwrv
CFO: Another source of capital comes from the equity market. During Q2, we raised $12.5 million, including $6.9 million in gross proceeds received from 3 institutional investors. And since the end of the October quarter, we raised an additional $4.6 million in gross proceeds under our At-The-Market, or ATM, program, representing shares sold at market prices.

3-9-12 Qtly. Conf. Call (King/Shan/Garnick/Lytle) Transcript http://tinyurl.com/7t2xsks
CFO: Our consistent goal, which we have stated over the last several quarters, is to closely match our financial investments in R&D with our various sources of capital. . . In closing, let me say that we are planning for success as we get closer to unblinding data from our 2nd-line NSCLC study and reporting several other clinical data points from our other ongoing trials. And it's important to note that while we always seek other non-dilutive opportunities to fund our future development efforts, it is always prudent to prepare for other ways to fund our operations. In line with this strategy, we will be filing a new shelf-registration statement later today [ 3-9-12: “PPHM files shelf to sell up to $150mm common stock, warrants”, S3: http://tinyurl.com/7dl7pjm ] as a potential measure to assist us at advancing our pipeline of novel drug candidates. We look forward to keeping you updated on our progress.

7-16-12 Qtly. Conf. Call (King/Shan/Garnick/Lytle) Transcript http://tinyurl.com/cs7spbz
CFO: 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 (2nd-Line NSCLC datahttp://tinyurl.com/73aeyxj ) 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.

8-15-12: CEO Steve King's 29min. talk at Wedbush/NYC http://tinyurl.com/8mhrtld
CEO: “We've laid out our strategy for financing the company; WE'VE NOT BEEN RAISING MONEY THRU THE CAPITAL MARKETS IN ANY WAY. We're not currently planning on going out for, nor have we been actively involved in any other fund-raising activities. Right now, our stated goal is to pursue a debt-arrangement - with an asset like Avid Bioservices, we can get very preferential rates on raising debt-type funding right now, which we feel is the least-dilutive for the company."

=> 8-30-12: $30mm Term-Loan Secured with Oxford Fin. ($15mm/immed, $15mm/option), + 273k 6yr warrants @2.47 http://tinyurl.com/cm2lkg 8K: http://tinyurl.com/9hedbaf )

[[[ BTW, Peregrin’es FY runs May-Apr, so we don’t know O/S at 6-30-12, but we do know this from the filings - http://tinyurl.com/942cx77 :
4-30-12 101,421,365 +2,548,193
7-13-12 104,174,056 +2,752,691
8-16-12 104,191,176 +17,120 <== ]]]
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You need to issue a retraction of your erroneous statement ASAP.