Avid Bioservices Inc (CDMO)

[Protector]

With hindsight!

Maybe it is interesting to have a closer look at the fact that Shan didn't present at IBC and the investors pre- and post reactions to it, mostly based on the posts on this board.

First it is quite difficult to understand why Peregrine couldn't tell us what's in their IR's Dept mail (see link above) BEFORE the event. What is the difference for them as a company, EXCLUDE the pps out of the equation for a moment, that they could say it yesterday but not during the period before the event? In the end not presenting is no news, nor good, nor bad.

Personally I can't think about any company operational reasons. The internal review/investigations or whatever may be going on would be equally impacted saying it before then after the event, unless by a hard to believe coincidence the conditions not to communicate about it ended yesterday. I don't think so!

However, we learn that Shan's presentation, as such, posed a possible problem for whatever they are doing. Now we are all intelligent adults with some experience in live and it will not be very hard to convince you that the reason in the e-mail is not the real reason. I believe IR's previous family reasons e-mail and agenda conflicts, and I still do, but this one isn't going to be shuffled through my throat! Why not.

First we all know that Shan could have easily adapted his presentation and exclude 2nd line NSCLC out of the presentation and update on 1st line, pancreatic, IST's, etc. All these are not under any investigation. There could have been some questions by the attendants but nothing that couldn't easily be dismissed.

There must be another reason. So I put myself in Shan's, and even managements, position and ask myself: "Why would we not give this presentation on Dec 5th"

By providing potential answers to that question, and excluding the "because of the ongoing review" as explained above, I would first come up with practical reasons. Shan is sick, no one to replace him, ect. However we can exclude that because Peregrine's communication and event scheduling page proves that they decided LONG ago that Shan wouldn't present and anxiously wanted to avoid ALL communication about it. Unless Bavi also allows to predict your future health and Shan got a shot of it I don't think they could anticipate practical problems on Dec 5th in June!

Next I would end up with the stock price, maybe the pps could suffer from the announcement that Shan wouldn't present, you know the markets are crazy after all so you never know. Also here we have prove, and even a past statement, that the pps isn't really Peregrine biggest concern and the e-mail from IR emphasizes that they didn't even consider any such impact because, as said before, communicating after the even is market wise about the same thing as before the event, with the exception attendants of the conference already knew of course.

What's left then. The public lie! Ah, well that's a tricky one. While Peregrine has nothing to do with the 3rd party error it surely suffered some reputation loss, a loss easily to recover from but not if you start lying. But what does lying has to do with Shan's presentation.

Well, suppose you have information today, that you know you are going to announce but cannot release yet, and Shan would LATER on Dec 5th tell a completely different story using data that goes all the way back to the beginning of the year, and presents that as the UPDATE on clinical trials because he can't talk about the REAL UPDATED situation. Then when the real data update comes out it would be clear that he had been lying to the public. That would create grounds to say, what some ambulance chasers now say about the discrepancy case, that Peregrine new something on Dec 5th and that they communicated something else, misleading the public.

So Shan not presenting doesn't have anything to do with internal review, investigation or the hunt for Red October, but all with the discrepancy between the current state of knowledge by Peregrine in relation to it's clinical trials and what Shan would have to present given the real current state couldn't be disclosed on Dec 5th.

And this is where the speculation starts. The pps manipulator wants us to believe that bad news is coming. That very probably means good news is coming (see AMRN, XOMA and even EK and many others historical data).

The change of the clinical trial records at the FDA, the non serving of the CRO (CSM), the last PR related to advancing breast, lung and pancreatic cancer, etc all point to good news.

BUT there is one little, possibly insignificant - i'll let you judge for yourself - problem.

With key data from Phase II bavituximab clinical trials in several oncology indications set to read out in the coming months and the opportunity to advance Cotara into a pivotal trial, we have number of potentially significant value drivers on the horizon.

The bold part doesn't really include 2nd line NSCLC, does it! That one has been read out already. 1st line, pancreatic and some IST OK, but not 2nd line.

So based on that observation let's reevaluate Shan's presentation cancellation. Could it have been canceled so they could NOT be accused to give an update and create the false impression that everything is OK with 2nd line while they know it is not?

Since the presentation was labeled Update on clinical trials and the detailed description specifically mentioned NSCLC, not talking about it would imply there is no update, no new information available in the current state of the knowledge of the company!

So, if Monday they announce that 2nd line NSCLC must be done all over and it would seem that they knew before Dec 5th, then ambulance chaser COULD have a real case, unless both dates fall within the 4 day communication rule of the SEC! By giving NO presentation at all, all these problems could be avoided.

As you all know I am a long term long, in for all or nothing, but I like to remain objective. So here is the positive scenario that may be at the basis of Shan not presenting.

Assume the results are TOP, and they probably are because all clinical trials demonstrate consistent good results that after correlation make perfect sense, and Shan would present not mentioning 2nd line NSCLC within the same line of reasoning as above!

What then? Well, actually a same problem comes into existence. One could easily say that not communicating about 2nd line in the presentation creates the false illusion that there is a problem, certainly after the time the company had to review, investigate, etc. The real underlying reason in this case is probably 'partner negotiations'.

These partners never left the table but after the discrepancy detection want clarification before entering an agreement, wouldn't you! SK himself alluded at that in last annual. Some will have been cut off of the information about the current state because from SK's remark we know they where at the point to enter such partnership and very probably had a short-list of potential partners.

Now assume for a moment you are at the table as a BP, would you like that good news would bring other, already excluded, BPs back to the table with tempting offers that could force you to re-evaluate yours! You would make it clear to Peregrine that you do not want that, possibly even putting something against it that Peregrine likes/wants.

So Shan presenting and throwing the solution of the discrepancy enigma in the open is not an option and not talking about 2nd line NSCLC neither. Bottom line, keep Shan at home and give him a dog to take care of.

It looks like we'll have to wait for the CC on Monday to find out.

...and will review progress of its clinical development programs.