Avid Bioservices, Inc.
Jul 11, 2013

Peregrine Pharmaceuticals Reports Fourth Quarter and Fiscal Year 2013 Financial Results and Recent Developments

Positive Phase IIb Data in Second-Line NSCLC and FDA Agreement on Pivotal Phase III Trial Design Position Start of Phase III Trial by Calendar Year-End; Bavituximab's Immunotherapeutic Mechanism of Action Data Presented at AACR Creates Expanded Drug Development Opportunities; Avid's Contract Manufacturing Revenue Topped $21 Million for FY 2013 and Starts FY 2014 With Over $27 Million in Revenue Backlog From Contract Manufacturing Business

TUSTIN, CA -- (Marketwired) -- 07/11/13 -- Peregrine Pharmaceuticals, Inc. (NASDAQ: PPHM), a biopharmaceutical company developing first-in-class monoclonal antibodies focused on the treatment and diagnosis of cancer, today announced financial results for the fourth quarter and fiscal year (FY) ended April 30, 2013 and provided an update on its advancing clinical pipeline and other corporate developments.

"The combination of preclinical data supporting bavituximab's immunotherapeutic mechanism of action presented at AACR, compelling second-line NSCLC data presented at ASCO and reaching the recent agreement with the FDA on a pivotal Phase III design have helped transform our bavituximab clinical program. We are now focused on initiating this Phase III trial in second-line NSCLC by the end of the year while simultaneously evaluating new areas of opportunity based on the enhanced understanding we now have of bavituximab's mechanism of action," said Steven W. King, president and chief executive officer of Peregrine. "This increased knowledge further supports the combination with docetaxel that we are pursuing in Phase III while opening the door to multiple new potential combinations that were not previously explored. These developments have initiated new partnering opportunities as well as increased interest amongst current partnership discussions surrounding the bavituximab program which continue while we execute this supplemental development strategy."

Data from a series of preclinical studies exploring the mechanism of action for phosphatidylserine (PS)-targeting antibodies, such as bavituximab, were presented at the Annual Meeting of the American Association for Cancer Research (AACR). Results from these studies demonstrated that PS-targeting antibodies mediate immune-stimulatory changes in tumors by acting on upstream immune checkpoints and transforming those immune cells that are inhibiting immune recognition (MDSC's) into tumor-fighting (M1) macrophages and activated dendritic cells that lead to the formation of tumor fighting T-cells. Based on these findings, Peregrine is collecting immune correlative data from three of the its ongoing investigator-sponsored clinical trials in breast, rectal and liver cancers while also exploring the potential to combine bavituximab with other immunotherapies such as PD-1 antibodies and CTLA-4 targeted approaches.

Lead Indication in Second-Line Non-Small Cell Lung Cancer:

Other Oncology Indications:
The company is exploring the potential of bavituximab through a number of other company-sponsored and investigator-sponsored trials (IST) including:

PS-Targeting Molecular Imaging Program
Peregrine continues to enroll and dose patients in an open-label, single-center trial of its experimental PS-targeting molecular imaging candidate, 124I-PGN650, in patients with various solid tumor types. The primary goal of the trial is to estimate radiation dosimetry in critical and non-critical organs. Secondary objectives of the trial are tumor imaging and safety. Recently, data were presented from imaging studies demonstrating that the chemotherapeutic drug docetaxel, a commonly prescribed second-line treatment for patients with advanced NSCLC, increases the exposure of bavituximab's target molecule, PS, on tumor blood vessel cells and tumor cells. Results also showed that PS exposure in tumors is correlated with tumor burden and response to docetaxel treatment, supporting exposed PS as a promising biomarker of cancer and response to therapy. In the June 2013 issue of the journal Molecular Imaging, scientists from Peregrine published results from a study showing that PGN650 could be useful in imaging tumors and detect enhanced PS exposure in response to chemotherapy.

"This quarter capped off a record year for our wholly-owned manufacturing subsidiary, Avid Bioservices, which generated over $21 million in non-dilutive contract manufacturing revenue and has started FY 2014 with more than $27 million in committed services from existing third-party clients," said Paul Lytle, chief financial officer of Peregrine. "We have also strengthened our cash position that gives us the needed flexibility to initiate the upcoming Phase III trial in second-line NSCLC while we continue to evaluate our future opportunities."

Total revenues for the fourth quarter of FY 2013 were $4,254,000, compared to $2,065,000 for the same quarter of the prior fiscal year. For FY 2013, total revenues were $21,683,000, compared to $15,233,000 for the prior year. The FY 2013 increase was primarily attributed to an increase in contract manufacturing revenue generated from Avid Bioservices due to an increase in the number of completed manufacturing runs.

Contract manufacturing revenues from Avid's clinical and commercial biomanufacturing services provided to its third-party clients increased 44% to $21,333,000 for FY 2013, which were the highest reported amount in Avid's history and were within Peregrine's previous guidance range, compared to $14,783,000 for FY 2012. FY 2014 started with manufacturing commitments from Avid's third-party customers in excess of $27 million, covering services to be provided during FY 2014 and into FY 2015. Of this amount, Peregrine expects contract manufacturing revenues for FY 2014 to be between $18 million and $22 million. In addition to providing biomanufacturing services to its third-party clients, Avid will continue to utilize available capacity and resources to continue its preparation for later stage clinical development and potential commercialization of bavituximab and Cotara.

Total costs and expenses in the fourth quarter of FY 2013 were $12,717,000, compared to $12,955,000 in the fourth quarter of FY 2012. For FY 2013, total costs and expenses were $50,035,000 compared to $57,303,000 for FY 2012. This decrease primarily was attributable to lower research and development expenses due to the decrease in clinical trial expenses. For the fourth quarter FY 2013, research and development expenses were $5,835,000, compared to $8,930,000 for the fourth quarter of FY 2012, and for FY 2013 were $24,306,000, compared to $35,688,000 for FY 2012. Selling, general and administrative expenses for FY 2013 were $13,134,000 compared to $11,462,000 for FY 2012.

Peregrine's consolidated net loss was $8,449,000, or $0.06 per share, for the fourth quarter of FY 2013, compared to a net loss of $10,882,000 or $0.10 per share, for the same quarter of the prior year. For FY 2013, net loss was $29,780,000, or $0.25 per share, compared to $42,119,000, or $0.50 per share, for FY 2012.

Peregrine reported $35,204,000 in cash and cash equivalents as of April 30, 2013, compared to $18,033,000 at fiscal year ended April 30, 2012. As of June 30, 2013, the company had $42,563,000 in cash and cash equivalents.

More detailed financial information and analysis may be found in Peregrine's Annual Report on Form 10-K, which will be filed with the Securities and Exchange Commission today.

Conference Call
Peregrine will host a conference call and webcast this afternoon, July 11, 2013, at 4:30 PM EDT (1:30 PM PDT).

To listen to the conference call, please dial (877) 312-5443 or (253) 237-1126 and request the Peregrine Pharmaceuticals conference call. A replay of the call will be available starting approximately two hours after the conclusion of the call through July 18, 2013 by calling (855) 859-2056, or (404) 537-3406 and using passcode 10642041.

To listen to the live webcast, or access the archived webcast, please visit: http://ir.peregrineinc.com/events.cfm.

About Peregrine Pharmaceuticals, Inc.
Peregrine Pharmaceuticals, Inc. is a biopharmaceutical company with a portfolio of innovative monoclonal antibodies in clinical trials focused on the treatment and diagnosis of cancer. The company is pursuing multiple clinical programs in cancer with its lead immunotherapy candidate bavituximab and novel brain cancer agent Cotara®. Peregrine also has in-house cGMP manufacturing capabilities through its wholly-owned subsidiary Avid Bioservices, Inc. (www.avidbio.com), which provides development and biomanufacturing services for both Peregrine and third-party customers. Additional information about Peregrine can be found at www.peregrineinc.com.

Safe Harbor Statement: Statements in this press release which are not purely historical, including statements regarding Peregrine Pharmaceuticals' intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that the company may not be able to initiate the Phase III trial within its anticipated timeline, the risk that the results from the Phase III trial may not support a future Biologics License Application (BLA) submission, the risk that the company may not have or raise adequate financial resources to complete the Phase III trial, the risk that the company may not find a suitable partner for the Phase III trial or the PS program, the risk that Avid's revenue growth may slow or decline, the risk that Avid may experience technical difficulties in processing customer orders which could delay delivery of products to customers and receipt of payment, and the risk that one or more existing Avid customers terminates its contract prior to completion. It is important to note that the company's actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, uncertainties associated with completing preclinical and clinical trials for our technologies; the early stage of product development; the significant costs to develop our products as all of our products are currently in development, preclinical studies or clinical trials; obtaining additional financing to support our operations and the development of our products; obtaining regulatory approval for our technologies; anticipated timing of regulatory filings and the potential success in gaining regulatory approval and complying with governmental regulations applicable to our business. Our business could be affected by a number of other factors, including the risk factors listed from time to time in our reports filed with the Securities and Exchange Commission including, but not limited to, our annual report on Form 10-K for the fiscal year ended April 30, 2013. The company cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Peregrine Pharmaceuticals, Inc. disclaims any obligation, and does not undertake to update or revise any forward-looking statements in this press release.

Three Months Ended
April 30,
Twelve Months Ended
April 30,
2013 2012 2013 2012
Unaudited Unaudited
Contract manufacturing revenue $ 4,176,000 $ 1,987,000 $ 21,333,000 $ 14,783,000
License revenue 78,000 78,000 350,000 450,000
Total revenues 4,254,000 2,065,000 21,683,000 15,233,000
Cost of contract manufacturing 3,217,000 934,000 12,595,000 10,153,000
Research and development 5,835,000 8,930,000 24,306,000 35,688,000
Selling, general and administrative 3,665,000 3,091,000 13,134,000 11,462,000
Total costs and expenses 12,717,000 12,955,000 50,035,000 57,303,000
LOSS FROM OPERATIONS (8,463,000 ) (10,890,000 ) (28,352,000 ) (42,070,000 )
Interest and other income 15,000 10,000 322,000 41,000
Interest and other expense (1,000 ) (2,000 ) (54,000 ) (90,000 )
Loss on early extinguishment of debt - - (1,696,000 ) -
NET LOSS $ (8,449,000 ) $ (10,882,000 ) $ (29,780,000 ) $ (42,119,000 )
COMPREHENSIVE LOSS $ (8,449,000 ) $ (10,882,000 ) $ (29,780,000 ) $ (42,119,000 )
Basic and Diluted 137,872,343 99,303,678 120,370,333 83,572,761
BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.06 ) $ (0.10 ) $ (0.25 ) $ (0.50 )
AS OF APRIL 30, 2013 AND 2012
2013 2012
Cash and cash equivalents $ 35,204,000 $ 18,033,000
Trade and other receivables, net 1,662,000 2,353,000
Inventories 4,339,000 3,611,000
Prepaid expenses and other current assets, net 709,000 795,000
Total current assets 41,914,000 24,792,000
Leasehold improvements 1,383,000 1,383,000
Laboratory equipment 5,441,000 4,967,000
Furniture, fixtures, office equipment and software 2,627,000 2,287,000
9,451,000 8,637,000
Less accumulated depreciation and amortization (6,773,000 ) (5,737,000 )
Property, net 2,678,000 2,900,000
Other assets 466,000 570,000
TOTAL ASSETS $ 45,058,000 $ 28,262,000
AS OF APRIL 30, 2013 AND 2012 (continued)
2013 2012
Accounts payable $ 2,821,000 $ 3,492,000
Accrued clinical trial and related fees 930,000 2,111,000
Accrued payroll and related costs 3,582,000 2,468,000
Deferred revenue, current portion 4,171,000 3,651,000
Customer deposits 8,059,000 4,865,000
Other current liabilities 998,000 1,052,000
Total current liabilities 20,561,000 17,639,000
Deferred revenue, less current portion 292,000 361,000
Other long-term liabilities 445,000 779,000
Commitments and contingencies
Preferred stock - $.001 par value; authorized 5,000,000 shares; non-voting; none issued - -
Common stock - $.001 par value; authorized 325,000,000 shares; outstanding - 143,768,946 and 101,421,365, respectively 143,000 101,000
Additional paid-in-capital 391,521,000 347,506,000
Accumulated deficit (367,904,000 ) (338,124,000 )
Total stockholders' equity 23,760,000 9,483,000

Christopher Keenan or Jay Carlson
Peregrine Pharmaceuticals, Inc.
(800) 987-8256

Source: Peregrine Pharmaceuticals

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