James - here's a quick walk through SK's comments;
Whether manufacturing a large or small molecule pharmaceutical or biologic product, there are a number of phases that I will break into the two primary ones SK referenced.
Bulk drug substance - manufacturing of chemical (standard pharma drugs) or biologic (mAbs etc.) products in bulk using the recipes, process and steps required to output bulk or non-finished goods. This can have many forms - but primarily is characterized by containing the API (Active Pharmaceutical Ingredient) or Biologic molecule (depending on what you are manufacturing) in a form that requires further processing.
This can include separation/filtration, purification, lyophilization (freeze drying, etc.)
Fill/Finish of a drug - separation of bulk into dosages, combination with inactive ingredients that are required as part of the delivery system, enteric coating, etc. This is where products that come in large vats/bulk containers or processed biologics (final mAAb molecule) sitting in a controlled environment becomes a commercially ready product. Here is where pills are pressed, capsules are filled, liquid product is freeze dried and dosed into stable dry powder that is ready for rehydration and injection, etc.
The Bulk side, aspecially for pharmaceuticals, has more forgiveness and can handle some deviation/errors. This is where a goof may lower yield but not result in full throw-away batch. For biologics like Bavi, less forgiveness but still the same. During and after bulk, there is the possibility of post processing and re-processing enabling the remediation of some issues that resulted during manufacturing.
On the Fill/Finish side - this is where the cost, complexity and risk are. This requires ultra pure and clean spaces, complete sterile environment, and precision manufacturing, weighing/dispensing etc. From here, the finished goods, ready to be injected or injected are sent in formal package, with patient product insert, labeling details, lot tracking (starts first in bulk), etc. Also, the cold chain of manufacturing, where each temperature sensitive product is tracked all the way to commercial use (injection in arm, as an example), is a critical piece of assessing the product's stability from fill all the way to point of use.
What does it mean in terms of Peregrine or the investment?
Expanding into more fill/finish would give them a higher likelihood of getting more business from the same customers, as well as becoming more relevant/desirable to others.
It requires different expertise to stand up, as well as completely separate manufacturing space.
I see this more as a benefit for commercializing Bavi (once approved, and if selling at high rate, where you fill/finish makes a big difference on capacity, risk management and quality assurance).
My opinion is that while driving the addition or maintaining of customers with a better vertically integrated manufacturing process, it may not make a huge difference to the stock and the eventual outcome. Provided Bavi is successful, incremental benefit from toll manufacturing (what they're doing for other customers) would pale in comparison to Bavi sales. However, having the capacity to handle Bavi scale up across all manufacturing phases will be of great value for the primary purpose of their existence. If they can get into fill/finish without compromising the primary objectives - all is good.
I feel they know what they're doing at this point and seem to be handling multiple parallel business pathways pretty well. Next 3-6 months will produce facts or clarify messages that will help all of us understand exactly how all this is coming together.
Best,
MH
Market Data 
Markets 
AI
