Replies to post #152101 on Avid Bioservices Inc (CDMO)

[Protector]

What I like about this Bus. Dev. VP job is that PPHM, who has the job hanging out for quite a while now (see biopharms Job-Post Chain) has not attempted to fill it in quickly but rather took the time to find a good and strong candidate.

A Business Developer of quality for PPHM MUST have a contact list he can tap into immediately and hands-on experience (including approach and negotiation). PPHM could not afford to hire someone that needs to start building this up from scratch. Therefore the person had to come out of the Pharma/Biotech BD and not from some other type of BD (such as ICT or finance).

Steve comes to us with a great track record in business development, particularly in the monoclonal antibody space,...

This is the ONLY phrase we needed in that PR. The rest is nice but just Mayonnaise to dress the dish up.

[cjgaddy]

2004 Interview with Steve Worsley, during his 5yr. stint with Raven Biotechnologies, ultimately acquired by MacroGenics…

11-2004: “The Monoclonal Antibody Business Landscape: An Interview with Stephen Worsley of Raven Biotechnologies”
CHI's Molecular Med Monthly Newsletter (CHI=Cambridge Healthech Inst.)
http://www.chidb.com/newsarticles/issue48_1.asp

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11-2013: Stephen Worsley joins Peregrine as VP of Bus.Dev. http://tinyurl.com/mmet4eb

= = = = =LinkedIN 12-12-13:
Stephen Worsley – VP, Business Development, Peregrine Pharmaceuticals (beg. 11-2013)
http://www.linkedin.com/pub/stephen-worsley/26/b35/271
Current:
• VP, Business Development, Peregrine Pharmaceuticals
• Board Advisor, OpenPlacement (a Rock Health graduate company)
PAST:
• CBO/VP Sales & Licensing, Centrose Pharmaceutical 2011-13
• VP, Business Dev., Intrexon Corp. 2010-11
• VP, Business Dev., Zosano Pharma (Johnson & Johnson spinout) 2008-10
• VP, Business Dev., Raven Biotechnologies (acquired by MacroGenics) 2003-08 (5 years)
• Dir. of Business Dev., Abgenix (acq. by AMGEN) 1999-2003
• Dir. of Business Dev., Tripos Drug Discovery 1996-99
• Dir. of Business Dev., OHM Technologies (acq. by Carlyle Group) 1990-96
• Marketing Manager, Symbion Cardiovascular Systems 1986-88
Education:
• Univ. of Utah - BS, Economics (chem-minor) 1986
• Univ. of Washington – MBA, Finance 1990
• Johns Hopkins Univ. - MS, Biotechnology (In process)

- - - - - - - - - - - - - - -
MGT. PROFILE ON PEREGRINE’S WEBSITE:
STEPHEN T. WORSLEY – VP, BUSINESS DEVELOPMENT
Stephen Worsley was appointed VP of Business Development in November 2013, bringing with him over 25 years in the biotechnology industry with 16 of those in business development. Prior to joining Peregrine he was Chief Business Officer at Centrose Pharmaceuticals and prior to that he held the position of VP of Business Development at Intrexon, Zosano Pharma, (a spin out of Johnson & Johnson) and Raven Biotechnologies (acquired by MacroGenics). In addition, he was Director of Business Development at Abgenix (acquired by Amgen), Tripos Drug Discovery, and OHM Technologies (acquired by Carlyle Group). Stephen holds an MBA in finance from the Univ. of Washington and a Bachelor of Science in international economics and finance from the Univ. of Utah.
http://www.peregrineinc.com/about-us/management-team.html

[cjgaddy]

12-27-13: S-3 Registration Statement – “up to $100,000,000”. Note this name on the S3 cover: Michael A. Hedge, K&L Gates LLP, Irvine, CA – see below.

12-27-13/S-3/Peregrine: PROSPECTUS $100,000,000
“We may offer and sell either individually or in combination with other securities any of the securities described in this prospectus from time to time in one or more offerings at prices and on terms to be determined at or prior to the applicable offering. We may also issue shares of common stock upon conversion of our preferred stock. The aggregate initial offering price of all securities sold under this prospectus will not exceed $100,000,000… As of the date of this prospectus, we have authority, subject to any limitations prescribed by law and without further stockholder approval, to issue from time to time up to 5,000,000 shares of preferred stock, par value $0.001 per share, in one or more series. As of the date of this prospectus, no shares of preferred stock were issued and outstanding.”
http://www.sec.gov/Archives/edgar/data/704562/000101968713004998/peregrine_s3.htm

S-3 by: Mark R. Ziebell, VP, General Counsel, Peregrine Pharmaceuticals, Tustin, CA
Copies to:
• Michael A. Hedge**, Esq., K&L Gates LLP, Irvine, CA
• Paul J. Lytle, CFO, Peregrine
**Michael Hedge is the leader of the K&L Gates Life Sciences M&A team – see http://www.klgates.com/life-sciences-practices/
K&L GATES: http://www.klgates.com
2-19-13: “Global law firm K&L Gates LLP has been honored as “Law Firm of the Year” in Mergers & Acquisitions magazine’s 2012 M&A Mid-Market Awards. The award recognizes K&L Gates for its strong performance in 2012 and its global approach to middle market mergers & acquisitions, as well as its own continued growth… “Our M&A team is emblematic of the firm – integrated across the globe, rooted in our 47 communities, and serving the full market,” said Peter J. Kalis, K&L Gates Chairman & Global Managing Partner. “This extraordinary distinction is well deserved.”

ALL SEC filings for PPHM: http://tinyurl.com/6d4jw8

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COMMENTARY BY FIRE_FOX 12-28-13 iHub #153465
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=95355452
It's a very encouraging sign to see that Michael Hedge, whose name is on the cover of the S-3 and who is the leader of the K&L Gates Life Sciences M&A team ( http://www.klgates.com/life-sciences-practices/ ), has advised the Company to use Preferred Stock financing as one of its options.

Preferred Stock is placed with institutions and other long term holders. It is better for the Company than a financing based on straight debt plus warrants because:

(1) The preferred stock dividend rate will be "cumulative" but not mandatory. That's why preferred stock can be called equity rather than debt. If the 8% or 10% coupon had to be paid each quarter whether or not there were earnings, it would be a debt instrument. But because dividends can only be paid out of earnings and have to be "declared" by the Board, the Company could go a year or two without paying these dividends, and then pay them in a lump sum at a time of its choosing. The key for the investor is that the dividends are "cumulative", meaning they don't go away and have to be paid at some time before other equity holders get anything.

(2) The cumulative dividend obligation owed by the Company is not "secured" by the technology of the Company. By its nature, preferred stock has a "preference" over common stock in liquidation, but the dividend obligation would not be "collateralized" by Avid or the anti-PS patent portfolio. Thus the investor in preferred stock is a large entity that has confidence that PPHM will succeed and ultimately pay the cumulative dividend amount. The preferred stock investor is not looking to be protected by the right to sell off the collateral prior to bankruptcy.

(3) When preferred stock is issued in publicly-traded companies, the investors have the right to convert into common at a pre-determined discount below the average public stock price as determined over some period of time prior to the conversion date. This is a huge advantage for PPHM. Unlike debt plus warrants, where the warrant exercise price is pegged to the stock price at the time the loan is made, preferred stock would minimize dilution because the institutional investor would be counting on converting into common for 20% - 30% below the public price a few years from now and then immediately selling the stock in the open market when we will be trading 15-20 million shares per day.

(4) Depending on how the preferred stock terms are drafted, there is often, but not always, a right for PPHM, on 30 or 60 days written notice, to redeem the preferred for the same principal amount that was originally invested plus payment of all cumulative dividends. This is a vehicle used in control battles to force a large institutional investor to convert his non-voting preferred shares into voting common shares … or get redeemed.

As a general matter, a long time ago PPHM shareholders approved a new Delaware Charter that gives the Board what's called "blank check" preferred stock authorization. This means we have confidence that the Board should be able to determine all of the variables discussed above (i.e. dividend rate, conversion discount, redemption rights, etc.) without having to go back to the shareholders. Preferred stock is usually sold for something like $1,000 or $5,000 per share so it doesn't matter at all how many preferred stock shares have been authorized. Of course they preferred shares can only be converted into common shares that have already been authorized.

Hope everyone can see why the S-3 Registration of these Preferred Shares multiples the opportunity for dramatically better financing terms than what was done with Oxford. A preferred stock financing is designed to be placed with large and knowledgeable institutions who can see the commercial potential of the anti-PS platform 2-3 years from now.

If Goldman Sachs or someone like that buys $60 million of this Preferred Stock offering, what they will really be betting on is that they can flip their block of preferred stock to Merck or BMS 3-4 years from now for a huge control premium over what they paid today. Yes, they will like the fact that the 9% cumulative dividend is 3 times what they can get on a 10-year Treasury Note, but what they are really hoping for is that the Company will be "in play" three years from now and the same Preferred Shares that they bought for $5K/share can be sold to BMS for $25K/share. I'm sure Michael Hedges is smart enough to put a restriction in the Preferred Stock Purchase Agreement saying that PPHM's new investment banker cannot sell the preferred shares to a third party without the Company's consent.

The real drivers for all of this are the new KOLs on the Advisory Board. When the head cancer immunotherapy analyst at Goldman Sachs sits down with Drs Gabrilovich and Antonia for a little discussion of how Bavi effects MDSCs and promotes an anti-cancer TME (Tumor Micro Environment), we will finally have the weight and credibility needed to pull of a preferred stock financing play like this.

Of course it won't hurt if Dr. Garnick also shows up at the Goldman Sachs meeting and explains why the Phase III trial design and early-look opportunities all indicate that the FDA is showing a very positive and supportive attitude towards the Ph III trial

[biopharm]

Accumulation patterns must have someone big behind them... guess it is a good time to remind any newcomers of some past , key comments made by Mr Worsley of Peregrine Pharmaceuticals.

[biopharm]

"bavituximab will mark the 6th clinical-level drug licensing program that I have led and closed. ..."

Mr Worsley, I hope Macrogenics was in your list of collaborators and with their nondisclosures ....and Scott Koenig ties I would say just another one of the dozens of collaborators

Who has the Bavi edge and lucky to beat their competition for Bavi access in their pipelines.....