Peregrine Pharmaceuticals Reports Financial Results for Second Quarter of Fiscal Year 2018 and Recent Developments
-- Avid Bioservices Records Revenues of
-- Transition to a Dedicated CDMO Business Nearing Completion --
"Today, we are pleased to report that the company has made great progress in its transition from an R&D focused business to a dedicated contract development and manufacturing organization (CDMO),"
Recent Developments at
- Established a dedicated CDMO management infrastructure with the hiring of
Roger J. Lias, Ph.D., as the President of Avid Bioservicesand director.
• Dr. Lias brings more than 20 years of experience in the industry having held senior management positions at several leading CDMOs including Cytovance Biologics,
KBI BioPharma, Diosynth RTP (formerly Covance Biotechnology Services) and Lonza Biologics.
- Strengthened Avid's sales and business development function with the hiring of
Tracy Kinjerskias vice president of business operations.
• Ms. Kinjerski brings more than 17 years of experience with a focus in contract development and manufacturing. She is charged with driving Avid's growth through the strategic expansion and diversification of the company's commercial and clinical client base.
- Reconstituted the board of directors to include six independent directors, all with significant CDMO experience.
October 2017, Mark R. Bamforth was appointed as an independent member of the board of directors. Mr. Bamforth has 30 years of biologics leadership experience including founding two CDMOs, Brammer Bio, where he is currently the president and CEO, and Gallus BioPharmaceuticals, which was acquired by DPx Holdings B.V., the parent company of Patheon. Additionally, he served for more than 20 years in key roles at Genzyme Corporation, including 10 years as a corporate officer responsible for running global manufacturing.
October 2017, Patrick Walsh was appointed as an independent member of the board of directors. Mr. Walshhas a record of leading successful, high-growth CDMOs and he has also led complex laboratory and pharmaceutical manufacturing operations including parenteral and active pharmaceutical ingredients (API) on a global scale.
November 2017, the company entered into a settlement agreement with its largest shareholder (Ronin/SWIM) regarding the composition of Peregrine's board of directors. Under the terms of the Agreement, on November 27, 2017, directors Steven W. King, Carlton M. Johnson, Jr., Eric S. Swartz and David H. Pohl each tendered his resignation, effective immediately, from Peregrine's board of directors, and from the board of directors of Avid Bioservices. The vacancies created by these resignations were immediately filled by three individuals who were nominated by Ronin/SWIM for election at Peregrine's upcoming 2017 Annual Meeting of Stockholders (Richard B. Hancock, Gregory P. Sargen and Joel McComb), and one director ( Joseph Carleone, Ph.D.) who is independent of Ronin/SWIM and new to Peregrine.
• Joseph Carleone, Ph.D. (independent appointee): Dr. Carleone is Chairman of the Board of AMPAC Fine Chemicals LLC, a leading manufacturer of pharmaceutical active ingredients. Prior to this position, Dr. Carleone was President, Chief Executive Officer and director of American Pacific Corporation, a leading custom manufacturer of fine and specialty chemicals and propulsion products.
• Richard B. Hancock (Ronin/SWIM appointee): Richard (Rick) B. Hancock has worked in the biologic CDMO industry for over 30 years in various operational and executive roles, serving most recently as President and CEO of Althea Technologies, Inc., a large molecule CDMO producing a wide range of biologics, vaccines and parenteral products.
• Joel McComb (Ronin/SWIM appointee): Joel McComb is the CEO, Chairman and Co-Founder of BioSpyder Technologies, Inc. Prior to BioSpyder, Mr. McComb served as Senior Vice President and General Manager of
Illumina, Inc., President of GE Healthcare'sLife Sciences and Discovery Systems division, and President of GE Healthcare'sInterventional Medicine division.
• Gregory P. Sargen (Ronin/SWIM appointee): Gregory P. Sargen currently serves as Executive Vice President - Corporate Development and Strategy of Cambrex Corporation ("Cambrex"), a global manufacturer and provider of services to life sciences companies. Prior to his current role, Mr. Sargen served as Executive Vice President and Chief Financial Officer of Cambrex.
- Expanded production capacity in the Myford facility to allow organic and significant growth using existing facilities.
• In recent months, the company expanded its capacity in its Myford facility by installing two new 2,000 liter single-use bioreactors.
Financial Highlights and Results
- The company maintains its manufacturing revenue guidance for the full FY 2018 of $50 million - $55 million.
- Contract manufacturing revenue from Avid's clinical and commercial biomanufacturing services was
$12.8 millionfor the second quarter of FY 2018 compared to $23.4 million for the second quarter of FY 2017.
- Avid's current manufacturing revenue backlog is
$33.0 million, representing estimated future manufacturing revenue to be recognized under committed contracts. Most of the backlog is expected to be recognized during the remainder of FY 2018 and into FY 2019.
Total operating expenses for the second quarter of FY 2018 were
$9.2 million, compared to $12.0 millionfor the second quarter of FY 2017. For the second quarter of FY 2018, total operating expenses included restructuring charges of $1.6 millionassociated with termination benefits including severance and other employee related costs related to a workforce reduction pursuant to a restructuring plan implemented in August 2017. The company is also actively evaluating its overall operating expenses and cost structure as a dedicated CDMO and plans to align its cost structure to match the future needs of the business.
- Research and development expenses decreased to
$3.7 millionin the second quarter of FY 2018 compared to $7.0 millionfor the second quarter of FY 2017. Over the next 60 or fewer days, the Company will continue to rapidly wind down all research and development costs to zero and plans to support only those efforts needed to pursue the license or sale of its research and development assets.
- Cost of contract manufacturing increased to
$16.2 millionin the second quarter of FY 2018 compared to $15.4 millionfor the second quarter of FY 2017.
- For the second quarter of FY 2018, selling, general and administrative expenses decreased to
$3.9 millioncompared to $5.0 millionfor FY 2017.
- Peregrine's consolidated net loss attributable to common stockholders was
$14.1 millionor $0.31per share, for the second quarter of FY 2018, compared to a net loss attributable to common stockholders of $5.5 million, or $0.16per share, for the same prior year quarter.
- Peregrine reported
$27.7 millionin cash and cash equivalents as of October 31, 2017, compared to $46.8 millionat fiscal year ended April 30, 2017. As further discussed in the Company's Quarterly Report on Form 10-Q, the Company plans to raise additional capital within the next six months to support its continued operations and other initiatives that will enhance its CDMO operations.
More detailed financial information and analysis may be found in Peregrine's Quarterly Report on Form 10-Q, which will be filed with the
Peregrine will host a conference call and webcast this afternoon,
To listen to the conference call, please dial (877) 312-5443 or (253) 237-1126 and request the
Peregrine is pursuing the licensing or sale of its proprietary R&D assets, including its lead immunotherapy candidate, bavituximab, which is currently being evaluated in clinical trials in combination with immune stimulating therapies for the treatment of various cancers. For more information, please visit www.peregrineinc.com .
Safe Harbor Statement: Statements in this press release which are not purely historical, including statements regarding
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
|Three Months Ended
||Six Months Ended |
|Contract manufacturing revenue||$||12,782,000||$||23,370,000||$||39,859,000||$||28,979,000|
|Cost of contract manufacturing||16,242,000||15,441,000||36,690,000||18,503,000|
| Gross profit (loss)||(3,460,000||)||7,929,000||3,169,000||10,476,000|
|Selling, general and administrative||3,867,000||4,984,000||8,080,000||10,044,000|
|Research and development||3,722,000||7,022,000||7,367,000||15,591,000|
|Total operating expenses||9,177,000||12,006,000||17,035,000||25,635,000|
|Other income (expense):|
|Interest and other income||14,000||21,000||41,000||46,000|
|Interest and other expense||(1,000||)||—||(4,000||)||—|
|Series E preferred stock|
|Net loss attributable to |
|Weighted average common shares|
| || |
|Basic and Diluted (1)||45,097,474||34,973,681||44,935,600||34,600,776|
|Basic and diluted loss per common share (1)||$||(0.31||)||$||(0.16||)||$||(0.36||)||$||(0.51||)|
|(1) All share and per share amounts of our common stock for all prior fiscal year periods presented have been retroactively adjusted to reflect the one-for-seven reverse stock split of our issued and outstanding common stock, which took effect on |
CONDENSED CONSOLIDATED BALANCE SHEETS
|Cash and cash equivalents||$||27,727,000||$||46,799,000|
|Trade and other receivables||3,508,000||7,742,000|
|Total current assets||48,976,000||89,100,000|
|Property and equipment, net||27,148,000||26,515,000|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accrued clinical trial and related fees||5,392,000||4,558,000|
|Accrued payroll and related costs||4,063,000||6,084,000|
|Other current liabilities||745,000||993,000|
|Total current liabilities||33,550,000||62,931,000|
|Deferred rent, less current portion||2,171,000||1,599,000|
|Commitments and contingencies|
|Preferred stock—$0.001 par value; authorized 5,000,000 shares;|
1,647,760 issued and outstanding at
|Common stock—$0.001 par value; authorized 500,000,000 shares; |
45,172,632 and 44,014,040 issued and outstanding at
|Additional paid-in capital||594,004,000||590,971,000|
|Total stockholders' equity||42,906,000||53,582,000|
|Total liabilities and stockholders' equity||$||78,627,000||$||118,112,000|
Stephanie Diaz(Investors) Vida Strategic Partners415-675-7401 firstname.lastname@example.org Tim Brons(Media) Vida Strategic Partners415-675-7402 email@example.com
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