Avid Bioservices Inc (CDMO)

[Protector]

Piper Jaffray noted, Peregrine is advancing two novel cancer drug candidates that, combined with its hybrid business model, present attractive risk-reward opportunities in our view.

Lead candidate bavituximab (bavi') has recently endured negative news flow, increasing skepticism from investors but creating a potential buying opportunity, in our view. Bavi' has broad potential due to its novel mechanism of action, providing many shots on goal for potentially large oncology markets like non-small cell lung cancer (NSCLC, ~$10bn+ market) and pancreatic cancer (PC), with multiple data-driven and regulatory catalysts in 2013.

A second major therapeutic candidate, Cotara, is a high risk but potentially high-return targeted radiopharmaceutical for brain cancer that we believe Peregrine will partner prior to starting a Phase III trial late in 2013