Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Jul. 31, 2017	Sep. 06, 2017
Document And Entity Information
Entity Registrant Name	PEREGRINE PHARMACEUTICALS INC
Entity Central Index Key	0000704562
Document Type	10-Q
Document Period End Date	Jul. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--04-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		45,096,081
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2018

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jul. 31, 2017	Apr. 30, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 37,256,000	$ 46,799,000
Trade and other receivables	7,884,000	7,742,000
Inventories	24,235,000	33,099,000
Prepaid expenses	1,388,000	1,460,000
Total current assets	70,763,000	89,100,000
Property and equipment, net	24,399,000	23,674,000
Restricted cash	1,150,000	1,150,000
Other assets	3,963,000	4,188,000
TOTAL ASSETS	100,275,000	118,112,000
CURRENT LIABILITIES:
Accounts payable	4,013,000	5,779,000
Accrued clinical trial and related fees	4,812,000	4,558,000
Accrued payroll and related costs	4,844,000	6,084,000
Deferred revenue	13,433,000	28,500,000
Customer deposits	14,322,000	17,017,000
Other current liabilities	963,000	993,000
Total current liabilities	42,387,000	62,931,000
Deferred rent, less current portion	1,880,000	1,599,000
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock -$0.001 par value; authorized 5,000,000 shares; 1,647,760 issued and outstanding at July 31, 2017 and April 30, 2017, respectively	2,000	2,000
Common stock - $0.001 par value; authorized 500,000,000 shares; 45,094,154 and 44,014,040 issued and outstanding at July 31, 2017 and April 30, 2017, respectively	45,000	44,000
Additional paid-in-capital	594,482,000	590,971,000
Accumulated deficit	(538,521,000)	(537,435,000)
Total stockholders' equity	56,008,000	53,582,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 100,275,000	$ 118,112,000

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jul. 31, 2017	Apr. 30, 2017
Statement of Financial Position [Abstract]
Preferred stock par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	1,647,760	1,647,760
Preferred stock, shares outstanding	1,647,760	1,647,760
Common stock par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	45,094,154	44,014,040
Common stock, shares outstanding	45,094,154	44,014,040

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($)

3 Months Ended

Jul. 31, 2017

Jul. 31, 2016

REVENUES:

Contract manufacturing revenue

$ 27,077,000

$ 5,609,000

COSTS AND EXPENSES:

Cost of contract manufacturing

20,448,000

3,062,000

Research and development

3,645,000

8,569,000

Selling, general and administrative

4,213,000

5,060,000

Total costs and expenses

28,306,000

16,691,000

LOSS FROM OPERATIONS

(1,229,000)

(11,082,000)

OTHER INCOME (EXPENSE):

Interest and other income

27,000

25,000

Interest and other expense

(3,000)

NET LOSS

(1,205,000)

(11,057,000)

COMPREHENSIVE LOSS

(1,205,000)

(11,057,000)

Series E preferred stock accumulated dividends

(1,442,000)

(1,380,000)

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ (2,647,000)

$ (12,437,000)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and Diluted

^[1]

44,773,727

34,227,870

BASIC AND DILUTED LOSS PER COMMON SHARE

^[1]

$ (.06)

$ (.36)

[1]	All share and per share amounts of our common stock for all 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 July 10, 2017 (Note 1).

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,205,000)	$ (11,057,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	485,000	837,000
Depreciation and amortization	642,000	613,000
Changes in operating assets and liabilities:
Trade and other receivables	(142,000)	(4,678,000)
Inventories	8,864,000	(9,088,000)
Prepaid expenses	72,000	116,000
Other non-current assets	9,000	78,000
Accounts payable	(2,514,000)	222,000
Accrued clinical trial and related fees	254,000	(1,017,000)
Accrued payroll and related expenses	(1,240,000)	(2,168,000)
Deferred revenue	(15,067,000)	11,501,000
Customer deposits	(2,695,000)	(2,481,000)
Other accrued expenses and current liabilities	46,000	(819,000)
Deferred rent, less current portion	281,000	19,000
Net cash used in operating activities	(12,210,000)	(17,922,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment acquisitions	(1,338,000)	(275,000)
Decrease (increase) in other assets	935,000	(100,000)
Net cash used in investing activities	(403,000)	(375,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net of issuance costs of $111,000 and $55,000, respectively	4,193,000	2,115,000
Proceeds from exercise of stock options	34,000	0
Dividends paid on Series E preferred stock	(1,081,000)	(1,035,000)
Principal payments on capital lease	(76,000)	0
Net cash provided by financing activities	3,070,000	1,080,000
NET DECREASE IN CASH AND CASH EQUIVALENTS	(9,543,000)	(17,217,000)
CASH AND CASH EQUIVALENTS, beginning of period	46,799,000	61,412,000
CASH AND CASH EQUIVALENTS, end of period	37,256,000	44,195,000
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accounts payable and other liabilities for purchase of property and equipment and other assets	$ 748,000	$ 444,000

1. ORGANIZATION AND BUSINESS DESCRIPTION

3 Months Ended

Jul. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND BUSINESS DESCRIPTION

Business Description – We are a biopharmaceutical company committed to improving the lives of patients by manufacturing and delivering pharmaceutical products through our wholly-owned subsidiary, Avid Bioservices, Inc. (“Avid”), our contract development and manufacturing organization (“CDMO”) while we pursue strategic options for our research and development assets, including our novel, development-stage immunotherapy product, bavituximab. On August 9, 2017, we commenced a restructuring plan designed to reduce our operating costs while we pursue strategic options for our research and development assets and focus our efforts on growing our CDMO business. Under this restructuring plan, which is expected to be completed in October 2017, we have reduced our overall workforce by 60 employees (or 20%) (Note 11).

Reverse Stock Split – On July 7, 2017, we effected a reverse stock split of our outstanding shares of common stock at a ratio of one-for-seven pursuant to our filed Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware. The reverse stock split took effect with the opening of trading on July 10, 2017. The primary purpose of the reverse stock split, which was approved by our stockholders at our 2016 Annual Meeting on October 13, 2016, was to enable us to regain compliance with the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market. Pursuant to the reverse stock split, every seven shares of our issued and outstanding shares of common stock were automatically combined into one issued and outstanding share of common stock, without any change in the par value per share of our common stock. All share and per share amounts of our common stock included in the accompanying unaudited condensed consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split for all periods presented, including reclassifying an amount equal to the reduction in par value to additional paid-in capital. No fractional shares were issued in connection with the reverse stock split. Any fractional share of common stock created by the reverse stock split was rounded up to the nearest whole share. The number of authorized shares of our common stock remained unchanged.

The reverse stock split affected all issued and outstanding shares of our common stock, as well as the shares of common stock underlying our stock options, employee stock purchase plan, warrants and the general conversion right with respect to our 10.50% Series E Convertible Preferred Stock (the “Series E Preferred Stock”).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jul. 31, 2017

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) related to quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended April 30, 2017. The condensed consolidated balance sheet at April 30, 2017 has been derived from audited financial statements at that date. The unaudited financial information for the interim periods presented herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operations for the periods presented, with such adjustments consisting only of normal recurring adjustments. Results of operations for interim periods covered by this Quarterly Report on Form 10-Q may not necessarily be indicative of results of operations for the full fiscal year or any other interim period.

The unaudited condensed consolidated financial statements include the accounts of Peregrine and Avid. All intercompany accounts and transactions among the consolidated entities have been eliminated in the unaudited condensed consolidated financial statements.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts, as well as disclosures of commitments and contingencies in the financial statements and accompanying notes. Actual results could differ materially from those estimates and assumptions.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should it be determined that we are unable to continue as a going concern.

At July 31, 2017, we had $37,256,000 in cash and cash equivalents. We have expended substantial funds on the research and development of our product candidates, and funding the operations of Avid. As a result, we have historically experienced losses and negative cash flows from operations since our inception and we expect negative cash flows from operations to continue for the foreseeable future until we can generate sufficient revenue from Avid’s contract manufacturing services to achieve profitability. Therefore, unless and until we are able to generate sufficient revenue from Avid’s contract manufacturing services or from the licensing, partnering, or sale of our product candidate under development, we expect such losses to continue in the foreseeable future, and as a result, we must raise additional capital during fiscal year 2018 in order to fund our operations and to execute our business plans.

Historically, we have funded a significant portion of our operations through the issuance of equity. During the three months ended July 31, 2017, we raised $4,304,000 in aggregate gross proceeds from the sale of shares of our common stock under an At Market Issuance Sales Agreement (Note 6). As of July 31, 2017, we had raised the full amount of gross proceeds available to us under the At Market Issuance Sales Agreement (Note 6). As of September 11, 2017, $67,674,000 remained available to us under our effective shelf registration statement (which shelf expires in January 2018), which allows us from time to time to offer and sell shares of our common stock, in one or more offerings, either individually or in combination.

Our ability to raise additional capital in the equity markets to fund our obligations in future periods is dependent on a number of factors, including, but not limited to, the market demand for our common stock. The market demand or liquidity of our common stock is subject to a number of risks and uncertainties, including but not limited to, negative economic conditions, adverse market conditions, adverse financial results, and negative research and development results. If we are unable to either (i) raise sufficient capital in the equity markets, (ii) generate additional revenue from Avid, or (iii) license, partner or sell our product candidate in development, or any combination thereof, we may need to further restructure, or cease, our operations. In addition, even if we are able to raise additional capital, it may not be at a price or on terms that are favorable to us.

As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that our accompanying unaudited condensed consolidated financial statements are issued.

Cash and Cash Equivalents

We consider all short-term investments readily convertible to cash with an initial maturity of three months or less to be cash equivalents.

Restricted Cash

Under the terms of three separate operating leases related to our facilities, we are required to maintain, as collateral, letters of credit during the terms of such leases. At July 31, 2017 and April 30, 2017, restricted cash of $1,150,000 was pledged as collateral under these letters of credit.

Concentrations of Credit Risk and Customer Base

Financial instruments that potentially subject us to a significant concentration of credit risk consist of cash and cash equivalents, restricted cash and trade receivables. We maintain our cash and restricted cash balances primarily with one major commercial bank and our deposits held with the bank exceed the amount of government insurance limits provided on our deposits. We are exposed to credit risk in the event of default by the major commercial bank holding our cash and restricted cash balances to the extent of the cash and restricted cash amounts recorded on the accompanying unaudited condensed consolidated balance sheet.

Our trade receivables from amounts billed for contract manufacturing services provided by Avid have historically been derived from a small customer base. Most contracts require up-front payments and installment payments during the service period. We perform periodic evaluations of the financial condition of our customers and generally do not require collateral, but we can terminate any contract if a material default occurs. At July 31, 2017 and April 30, 2017, approximately 83% and 93%, respectively, of our trade receivables were due from four customers.

In addition, contract manufacturing revenue generated by Avid has historically been derived from a small customer base (Note 9). These customers typically do not enter into long-term contracts because their need for drug supply depends on a variety of factors, including the drug’s stage of development, their financial resources, and, with respect to commercial drugs, demand for the drug in the market.

Our future results of operations could be adversely affected if revenue from any one of our primary customers is significantly reduced or eliminated.

Comprehensive Loss

Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss is equal to our net loss for all periods presented.

Impairment

Long-lived assets are reviewed for impairment in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable. Long-lived assets are reported at the lower of carrying amount or fair value less cost to sell. For the three months ended July 31, 2017 and 2016, there were no indicators of impairment of the value of our long-lived assets.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance prioritizes the inputs used in measuring fair value into the following hierarchy:

Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as assets or liabilities whose values are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.

Level 3 – Unobservable inputs that are supported by little or no market activity and significant to the overall fair value measurement of the assets or liabilities; therefore, requiring the company to develop its own valuation techniques and assumptions.

As of July 31, 2017 and April 30, 2017, we do not have any Level 2 or Level 3 financial assets or liabilities and our cash equivalents, which are primarily invested in money market funds with one major commercial bank, are carried at fair value based on quoted market prices for identical securities (Level 1 input). In addition, there were no transfers between any Levels of the fair value hierarchy during the three months ended July 31, 2017 and 2016.

Customer Deposits

Customer deposits primarily represent advance billings and/or payments received from Avid’s third-party customers prior to the initiation of contract manufacturing services.

Revenue Recognition

We currently derive revenue from our contract manufacturing services provided by Avid. We recognize revenue in accordance with the authoritative guidance for revenue recognition when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the seller’s price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. We also comply with the authoritative guidance for revenue recognition regarding arrangements with multiple elements.

Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer. When deliverables are separable, consideration received is allocated among the separate units based on their respective fair values, and the applicable revenue recognition criteria are applied to each of the separate units, which may require the use of significant judgement. Deliverables are considered separate units of accounting if (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control.

Arrangement consideration is allocated at the inception of the agreement to all identified units of accounting based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence (“VSOE”) of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists, we use our best estimate of the selling price for the deliverable. The amount of allocable arrangement consideration is limited to amounts that are fixed or determinable. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. Changes in the allocation of the sales price between delivered and undelivered elements can impact revenue recognition but do not change the total revenue recognized under any agreement.

On occasion, we receive requests from customers to hold product manufactured by Avid on a “bill-and-hold” basis. Revenue is recognized for these “bill-and-hold” arrangements in accordance with the authoritative guidance, which requires, among other things, the existence of a valid business purpose for the arrangement; the “bill-and-hold” arrangement is at the request of the customer; title and risk of ownership must pass to the customer; the product is complete and ready for shipment; a fixed delivery date that is reasonable and consistent with the customer’s business practices; the product has been separated from our inventory; and no further performance obligations by us exist.

In addition, we also follow the authoritative guidance when reporting revenue as gross when we act as a principal versus reporting revenue as net when we act as an agent. For transactions in which we act as a principal, have discretion to choose suppliers, bear credit and inventory risk and perform a substantive part of the services, revenue is recorded at the gross amount billed to a customer and costs associated with these reimbursements are reflected as a component of cost of sales for contract manufacturing services.

Any amounts received prior to satisfying our revenue recognition criteria are recorded as deferred revenue or customer deposits in the accompanying unaudited condensed consolidated financial statements. We also record a provision for estimated contract losses, if any, in the period in which they are determined.

Research and Development Expenses

Research and development expenses primarily include (i) payroll and related costs, including share-based compensation associated with research and development personnel, (ii) costs related to clinical trials and preclinical testing of our technologies under development, (iii) costs to develop and manufacture the product candidates, including raw materials and supplies, product testing, depreciation, and facility related expenses, (iv) expenses for research services provided by universities and contract laboratories, including sponsored research funding, and (v) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to our research and development efforts and have no alternative future uses.

Clinical trial costs are a significant component of our research and development expenses. We have historically contracted with third parties to perform various clinical trial activities on our behalf. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. Expenses related to clinical trials are accrued based on our estimates and/or representations from third parties (including clinical research organizations) regarding services performed. If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we modify our accruals accordingly on a prospective basis. Revisions in the scope of a contract are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. There were no material adjustments for a change in estimate to research and development expenses in the accompanying unaudited condensed consolidated financial statements for the three months ended July 31, 2017 and 2016.

Under certain research and development agreements, we are obligated to make certain advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities and are deferred and capitalized as prepaid research and development expenses. These advance payments are recognized as an expense in the period the related goods are delivered or the related services are performed. We assess our prepaid research and development expenses for impairment when events or changes in circumstances indicate that the carrying amount of the prepaid expense may not be recoverable or provide future economic benefit.

In addition, under certain in-licensing agreements associated with the research and development of our product candidates, we are obligated to pay certain milestone payments based on potential clinical development and regulatory milestones. These milestone payments have no alternative future uses (in other research and development projects or otherwise) and therefore have no separate economic values and are expensed as research and development costs at the time the costs are incurred. We have no in-licensed product candidates that have alternative future uses in research and development projects or otherwise. In addition, we do not perform any research and development activities for any unrelated entities.

Share-based Compensation

We account for stock options and other share-based awards granted under our equity compensation plans in accordance with the authoritative guidance for share-based compensation. The estimated fair value of share-based payments to employees in exchange for services is measured at the grant date, using a fair value based method, such as a Black-Scholes option valuation model, and is recognized as expense on a straight-line basis over the requisite service periods. The fair value of modifications to share-based awards, if any, is generally estimated using a Black-Scholes option valuation model, unless a lattice model is required. Pursuant to the adoption of ASU 2016-09 (Note 2), forfeitures are recognized as a reduction of share-based compensation expense as they occur. As of July 31, 2017, there were no outstanding share-based awards with market or performance conditions.

Basic and Dilutive Net Loss Per Common Share

Basic net loss per common share is computed by dividing our net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period excluding the dilutive effects of stock options, shares of common stock expected to be issued under our Employee Stock Purchase Plan (the “ESPP”), warrants, and Series E Preferred Stock outstanding during the period. Diluted net loss per common share is computed by dividing our net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding during the period plus the potential dilutive effects of stock options, shares of common stock expected to be issued under our ESPP, warrants, and Series E Preferred Stock outstanding during the period. Net loss attributable to common stockholders represents our net loss plus Series E Preferred Stock accumulated dividends. Series E Preferred Stock accumulated dividends include dividends declared for the period (regardless of whether or not the dividends have been paid) and dividends accumulated for the period (regardless of whether or not the dividends have been declared).

The potential dilutive effect of stock options, shares of common stock expected to be issued under our ESPP, and warrants outstanding during the period are calculated in accordance with the treasury stock method, but are excluded if their effect is anti-dilutive. The potential dilutive effect of our Series E Preferred Stock outstanding during the period was calculated using the if-converted method assuming the conversion of Series E Preferred Stock as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive. However, because the impact of stock options, shares of common stock expected to be issued under our ESPP, warrants, and Series E Preferred Stock are anti-dilutive during periods of net loss, there was no difference between basic and diluted loss per common share amounts for the three months ended July 31, 2017 and 2016.

The calculation of weighted average diluted shares outstanding for the three-month periods ended July 31, 2017 and 2016 excludes the dilutive effect of the following weighted average outstanding stock options and shares of common stock expected to be issued under our ESPP as their impact are anti-dilutive during periods of net loss:

	July 31, 2017		July 31, 2016

Stock Options		102,074		–
ESPP		2,184		2,663
Total		104,258		2,663

The calculation of weighted average diluted shares outstanding for the three-month periods ended July 31, 2017 and 2016 also excludes the following weighted average outstanding stock options, warrants, and Series E Preferred Stock (assuming the if-converted method), as their exercise prices or conversion price were greater than the average market price of our common stock during the respective periods, resulting in an anti-dilutive effect:

	July 31, 2017		July 31, 2016

Stock Options		3,602,628		3,980,357
Warrants		39,040		39,040
Series E Preferred Stock		1,978,783		1,894,337
Total		5,620,451		5,913,734

Recently Adopted Accounting Pronouncements

Effective May 1, 2017, we adopted Accounting Standards Update (“ASU”) 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 requires that inventory should be measured at the lower of cost and net realizable value for entities that measure inventory using the first-in, first-out method. ASU 2015-11 defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The adoption of ASU 2015-11 did not have a material impact on our condensed consolidated financial statements.

Effective May 1, 2017, we adopted ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Under existing standards, deferred taxes for each tax-paying jurisdiction are presented as a net current asset or liability and net long-term asset or liability. To simplify presentation, the new guidance will require that all deferred tax assets and liabilities, along with related valuation allowances, be classified as long-term on the balance sheet. As a result, each tax-paying jurisdiction will now only have one net long-term deferred tax asset or liability. The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. Due to the full valuation allowance on our U.S. deferred tax assets, the adoption of ASU 2015-17 did not have a material impact on our condensed consolidated financial statements.

Effective May 1, 2017, we adopted ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 changes certain aspects of accounting for share-based payments to employees and involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Specifically, ASU 2016-09 requires that all income tax effects of share-based awards be recognized as income tax expense or benefit in the reporting period in which they occur. Additionally, ASU 2016-09 amends existing guidance to allow forfeitures of share-based awards to be recognized as they occur. Previous guidance required that share-based compensation expense include an estimate of forfeitures. Upon adoption of ASU 2016-09, we made a policy election to recognize forfeitures as they occur. The adoption of ASU 2016-09 did not have a material impact on our condensed consolidated financial statements.

Pending Adoption of Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers, which, along with subsequent amendments issued in 2015 and 2016, will replace substantially all current US GAAP revenue recognition guidance. ASU 2014-09, as amended, is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09, as amended, is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, which will be our fiscal year 2019 beginning May 1, 2018. The new guidance permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach where the new standard is applied in the financial statements starting with the year of adoption. Under both approaches, cumulative impact of the adoption is reflected as an adjustment to retained earnings (accumulated deficit) as of the earliest date presented in accordance with the new standard. We are continuing to assess the impact of the new guidance on our accounting policies and procedures and are evaluating the new requirements as applied to existing manufacturing contracts under our contract manufacturing business. Although we are continuing to assess the impact of the new guidance, we have identified our revenue streams and based on our preliminary assessment we believe the most significant impact may relate to the recognition of contract manufacturing revenue over a period of time rather than at a point in time. We plan to adopt ASU 2014-09, as amended, on May 1, 2018 and have not yet determined which transition method will be elected.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-2 requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, which will be our fiscal year 2020 beginning May 1, 2019. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption of ASU 2016-02 on our condensed consolidated financial statements and related disclosures.

In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which addresses diversity in practice related to the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 will require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, which will be our fiscal year 2019 beginning May 1, 2018. Early adoption is permitted. We are currently evaluating the impact the adoption of ASU 2016-18 will have on our condensed consolidated financial statements and related disclosures.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017, which will be our fiscal year 2019 beginning May 1, 2018. Early adoption is permitted. We do not expect the adoption of ASU 2016-09 to have a material impact on our condensed consolidated financial statements and related disclosures.

3. TRADE AND OTHER RECEIVABLES

3 Months Ended

Jul. 31, 2017

Receivables [Abstract]

TRADE AND OTHER RECEIVABLES

Trade receivables are recorded at the invoiced amount net of an allowance for doubtful accounts, if necessary. Other receivables are reported at amounts expected to be collected net of an allowance for doubtful accounts, if necessary. Trade and other receivables consist of the following:

	July 31, 2017		April 30, 2017
Trade receivables⁽¹⁾	$	5,452,000	$	7,274,000
Other receivables		2,432,000		468,000
Total trade and other receivables	$	7,884,000	$	7,742,000

______________

(1) Represents amounts billed for contract manufacturing services provided by Avid.

We continually monitor our allowance for doubtful accounts for all receivables. We apply judgment in assessing the ultimate realization of our receivables and we estimate an allowance for doubtful accounts based on various factors, such as, the aging of accounts receivable balances, historical experience, and the financial condition of our customers. Based on our analysis of our receivables as of July 31, 2017 and 2016, we determined no allowance for doubtful accounts was necessary.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

4. PROPERTY AND EQUIPMENT

3 Months Ended

Jul. 31, 2017

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment is recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related asset, generally ranging from three to ten years. Amortization of leasehold improvements is calculated using the straight-line method over the shorter of the estimated useful life of the asset or the remaining lease term.

Property and equipment, net, consists of the following:

	July 31, 2017			April 30, 2017
Leasehold improvements	$	20,675,000		$	20,098,000
Laboratory equipment		11,340,000			10,777,000
Furniture, fixtures, office equipment and software		4,726,000			4,499,000
Total property and equipment		36,741,000			35,374,000
Less accumulated depreciation and amortization		(12,342,000	)		(11,700,000	)
Total property and equipment, net	$	24,399,000		$	23,674,000

Depreciation and amortization expense for the three months ended July 31, 2017 and 2016 was $642,000 and $613,000, respectively.

5. INVENTORIES

3 Months Ended

Jul. 31, 2017

Inventory Disclosure [Abstract]

INVENTORIES

Inventories are recorded at the lower of cost or market (net realizable value) and primarily include raw materials, work-in-process (comprised of raw materials, direct labor and overhead costs associated with in-process manufacturing services), and finished goods (representing manufacturing services completed and ready for shipment) associated with our wholly-owned subsidiary, Avid. Overhead costs allocated to work-in-process inventory are based on the normal capacity of our production facilities and does not include costs from abnormally low production or idle capacity, which are expensed directly to cost of contract manufacturing in the period incurred. During the three months ended July 31, 2017 and 2016, we expensed $900,000 and nil, respectively, in idle capacity costs directly to cost of contract manufacturing in the accompanying condensed consolidated financial statements. Cost is determined by the first-in, first-out method. Inventories consist of the following:

	July 31, 2017		April 30, 2017
Raw materials	$	10,721,000	$	11,304,000
Work-in-process		13,514,000		13,755,000
Finished goods		–		8,040,000
Total inventories	$	24,235,000	$	33,099,000

6. STOCKHOLDERS' EQUITY

3 Months Ended

Jul. 31, 2017

Equity [Abstract]

STOCKHOLDERS' EQUITY

Sales of Common Stock

Our ability to continue to fund our operations is highly dependent on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to support our future operations through one or more methods, including but not limited to, issuing additional equity.

During the three months ended July 31, 2017, we issued shares of our common stock under the following agreement:

AMI Sales Agreement - On August 7, 2015, we entered into an At Market Issuance Sales Agreement (“AMI Sales Agreement”) with MLV & Co. LLC (“MLV”), pursuant to which we were able to sell shares of our common stock through MLV, as agent, for aggregate gross proceeds of up to $30,000,000, in registered transactions from our shelf registration statement on Form S-3 (File No. 333-201245), which was declared effective by the SEC on January 15, 2015. Sales of our common stock through MLV were made by any method that was deemed an “at the market offering” as defined in Rule 415 of the Securities Act. We paid MLV a commission equal to 2.5% of the gross proceeds from the sale of our common stock pursuant to the AMI Sales Agreement. During the three months ended July 31, 2017, we sold 1,051,258 shares of our common stock at market prices under the AMI Sales Agreement, for aggregate gross proceeds of $4,304,000 before deducting commissions and other issuance costs of $111,000. As of July 31, 2017, we had raised the full amount of gross proceeds available to us under the AMI Sales Agreement.

Series E Preferred Stock Dividend

On June 6, 2017, our Board of Directors declared a quarterly cash dividend of $0.65625 per share on our Series E Preferred Stock. The dividend payment is equivalent to an annualized 10.50% per share, based on the $25.00 per share stated liquidation preference, accruing from April 1, 2017 through June 30, 2017. The cash dividend of $1,081,000 was paid on July 3, 2017 to holders of the Series E Preferred Stock of record on June 19, 2017.

Shares of Common Stock Authorized and Reserved for Future Issuance

We are authorized to issue up to 500,000,000 shares of our common stock. As of July 31, 2017, 45,094,154 shares of our common stock were issued and outstanding. In addition, our common stock outstanding as of July 31, 2017 excluded the following shares of our common stock reserved for future issuance:

5,612,106 shares of common stock reserved for issuance under outstanding option grants and available for issuance under our stock incentive plans;

1,359,736 shares of common stock reserved for and available for issuance under our Employee Stock Purchase Plan;

39,040 shares of common stock issuable upon exercise of outstanding warrants; and

6,826,435 shares of common stock issuable upon conversion of our outstanding Series E Preferred Stock ⁽¹⁾.

_____________

⁽¹⁾

The Series E Preferred Stock is convertible into a number of shares of our common stock determined by dividing the liquidation preference of $25.00 per share by the conversion price, currently $21.00 per share. If all of our outstanding Series E Preferred Stock were converted at the $21.00 per share conversion price, the holders of our Series E Preferred Stock would receive an aggregate of 1,961,619 shares of our common stock. However, we have reserved the maximum number of shares of our common stock that could be issued upon a change of control event assuming our shares of common stock are acquired for consideration of $5.985 per share or less. In this scenario, each outstanding share of our Series E Preferred Stock could be converted into 4.18 shares of our common stock, representing the Share Cap.

7. EQUITY COMPENSATION PLANS

3 Months Ended

Jul. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

EQUITY COMPENSATION PLANS

Stock Incentive Plans

As of July 31, 2017, we had an aggregate of 5,612,106 shares of our common stock reserved for issuance under our stock incentive plans, of which, 4,022,136 shares were subject to outstanding options and 1,589,970 shares were available for future grants of share-based awards.

The following summarizes our stock option transaction activity for the three months ended July 31, 2017:

Stock Options	Shares			Weighted Average Exercisable Price
Outstanding, May 1, 2017		4,081,548		$ 8.77
Granted		20,213		$ 4.43
Exercised		(9,959	)	$ 3.43
Canceled or expired		(69,666	)	$ 10.45
Outstanding, July 31, 2017		4,022,136		$ 8.73

Employee Stock Purchase Plan

We have reserved a total of 2,142,857 shares of our common stock to be purchased under our ESPP, of which 1,359,736 shares remained available to purchase at July 31, 2017, and are subject to adjustment as provided in the ESPP for stock splits, stock dividends, recapitalizations and other similar events. Under the ESPP, we sell shares to participants at a price equal to the lesser of 85% of the fair market value of our common stock at the (i) beginning of a six-month offering period, or (ii) end of the six-month offering period. The ESPP provides for two six-month offering periods each year; the first offering period begins on the first trading day on or after each May 1; the second offering period begins on the first trading day on or after each November 1. No shares of our common stock were purchased under the ESPP during the three months ended July 31, 2017 as the current six-month offering period ends on October 31, 2017.

Share-Based Compensation

Total share-based compensation expense related to share-based awards issued under our equity compensation plans is included in the accompanying unaudited condensed consolidated statements of operations as follows:

	Three Months Ended July 31,
	2017		2016
Cost of contract manufacturing	$	–	$	42,000
Research and development		269,000		370,000
Selling, general and administrative		216,000		425,000
Total share-based compensation expense	$	485,000	$	837,000

Share-based compensation from:
Stock options	$	409,000	$	731,000
Employee stock purchase plan		76,000		106,000
	$	485,000	$	837,000

As of July 31, 2017, the total estimated unrecognized compensation cost related to non-vested employee stock options was $1,570,000. This cost is expected to be recognized over a weighted average vesting period of 1.43 years based on current assumptions.

9. SEGMENT REPORTING

3 Months Ended

Jul. 31, 2017

Segment Reporting [Abstract]

SEGMENT REPORTING

Our business is organized into two reportable operating segments and both operate in the U.S. Peregrine is engaged in the research and development of monoclonal antibodies for the treatment of cancer. Avid is engaged in providing contract manufacturing services for third-party customers on a fee-for-service basis while also supporting our internal drug development efforts.

The accounting policies of the operating segments are the same as those described in Note 2. We evaluate the performance of our contract manufacturing services segment based on gross profit or loss from third-party customers. However, our products in the research and development segment are not evaluated based on gross profit or loss, but rather based on scientific progress of the technologies. As such, gross profit or loss is only provided for our contract manufacturing services segment in the below table. All revenues shown below are derived from transactions with third-party customers.

Segment information is summarized as follows:

	Three Months Ended July 31,
	2017			2016

Contract manufacturing services revenue	$	27,077,000		$	5,609,000
Cost of contract manufacturing services		20,448,000			3,062,000
Gross profit		6,629,000			2,547,000
Research and development expense		(3,645,000	)		(8,569,000	)
Selling, general and administrative expense		(4,213,000	)		(5,060,000	)
Other income (expense), net		24,000			25,000
Net loss	$	(1,205,000	)	$	(11,057,000	)

Revenue generated from our contract manufacturing services segment was derived from a limited number of customers. The percentages below represent revenue derived from each customer as a percentage of total contract manufacturing services revenue:

	Three Months Ended July 31,
	2017		2016

Halozyme Therapeutics, Inc.		78%		65%
Customer A		6%		29%
Other customers		16%		6%
Total		100%		100%

In addition, during the three months ended January 31, 2017 and 2016, contract manufacturing services revenue was derived solely from U.S. based customers.

Our long-lived assets are located in the U.S. and consist of leasehold improvements, laboratory equipment, furniture and fixtures, office equipment and software and are net of accumulated depreciation. Long-lived assets by segment consist of the following:

	July 31, 2017		April 30, 2017
Long-lived Assets, net:
Contract manufacturing services	$	23,901,000	$	22,599,000
Products in research and development		498,000		1,075,000
Total	$	24,399,000	$	23,674,000

10. COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jul. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Legal Proceedings – In the ordinary course of business, we are at times subject to various legal proceedings and disputes. We make provisions for liabilities when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such provisions are reviewed at least quarterly and adjusted to reflect the impact of any settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to a particular case.

On October 10, 2013, a derivative and class action complaint, captioned Michaeli v. Steven W. King, et al., C.A. No. 8994-VCL, was filed in the Court of Chancery of the State of Delaware (the “Court”), purportedly on behalf of the Company, which is named a nominal defendant, against certain of our executive officers and directors (collectively, the “Defendants”). On December 1, 2015, the plaintiffs filed an amended and supplemental derivative and class action complaint (the “Amended Complaint”). The Amended Complaint alleges that the Defendants breached their respective fiduciary duties in connection with certain purportedly improper compensation decisions made by our board of directors during the past four fiscal years ended April 30, 2015, including: (i) the grant of a stock option to Mr. King on May 4, 2012; (ii) the non-routine broad-based stock option grant to our directors, executives, all other employees and certain consultants on December 27, 2012; and (iii) the payment, during the past four fiscal years ended April 30, 2015, of compensation to our non-employee directors. In addition, the complaint alleges that our directors breached their fiduciary duty of candor by filing and seeking stockholder action on the basis of an allegedly materially false and misleading proxy statement for our 2013 annual meeting of stockholders. The plaintiffs are seeking, among other things, rescission of a portion of the stock option grant to Mr. King on May 4, 2012 and the stock options granted to the Defendants on December 27, 2012, as well as disgorgement of any excessive compensation paid to our non-employee directors during the four fiscal years ended April 30, 2015 and other monetary relief for our benefit. On May 15, 2017, the parties filed with the Court a Stipulation and Agreement of Compromise, Settlement and Release (the “Settlement”) setting forth the terms of the proposed settlement of the claims in the Amended Complaint. At a hearing on July 27, 2017, the Court issued an order approving the Settlement. The following is a summary of the essential terms of the Settlement:

The non-employee directors agreed to pay or cause to be paid $1,500,000 to us, which amount is included in trade and other receivables at July 31, 2017 and as a reduction to selling, general and administrative expense in the accompanying unaudited condensed consolidated financial statements for the three months ended July 31, 2017 (payment was received by the Company in full in August 2017).

Our Board of Directors agreed to reprice all of the stock options granted to the non-employee directors and executive officers (other than one executive officer whose employment terminated in 2013) on December 27, 2012, from $8.26 per share to $17.01, representing the closing price of our common stock on January 7, 2013 (as adjusted for the one-for-seven reverse stock split effected on July 7, 2017).

The non-employee directors agreed to an annual compensation cap (cash and stock compensation) for a two-year period equal to the greater of: (i) $400,000 (comprised of compensation both for service as a director of Peregrine Pharmaceuticals, Inc. and for services as a director of Avid Bioservices, Inc.); or (ii) the 75th percentile of compensation paid by our peer group to their non-employee directors, as determined by an independent compensation consultant.

The Board of Directors agreed, contingent upon, and within three (3) months following, the FDA’s approval of bavituximab for marketing in the United States, to increase the authorized number of directors from four to five, and appoint an appropriate and suitable independent candidate to serve as the fifth member.

In addition, we agreed to several governance changes related to our equity award practices and compensation disclosures. The new governance procedures must be implemented within ninety (90) days following the approval of the Settlement and maintained for a period of three (3) years thereafter. The new governance procedures generally require that (i) all equity awards be made in compliance with all applicable laws, rules and regulations, (ii) an independent third party compensation consultant review the process by which stock options and other equity awards are granted, (iii) equity award practices are overseen by a newly appointed Chief Compliance Officer (who may be an existing executive officer), (iv) the Board of Directors establish a uniform, pre-set time for all annual equity grants, (v) the Compensation Committee review and approve all compensation disclosures in our proxy statements, (vi) an independent third party compensation consultant advise the Compensation Committee annually with regard to non-employee director compensation, (vii) all grants of options to officers and directors be approved only at a meeting of the Compensation Committee, and not by unanimous written consent, and (viii) beginning with its proxy statement for the 2017 annual meeting of stockholders, we provide enhanced disclosure regarding non-employee director compensation.

11. SUBSEQUENT EVENTS

3 Months Ended

Jul. 31, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Corporate Restructuring

On August 9, 2017, our Board of Directors approved, and management commenced, a restructuring plan designed to reduce operating costs and better position the Company to achieve overall profitability while we pursue strategic options for our research and development assets. Under this restructuring plan, which is expected to be completed in October 2017, we have reduced our overall workforce by 60 employees (or 20%). In addition, the affected employees are eligible to receive severance payments based on years of service, contingent upon an affected employee’s execution (and non-revocation) of a separation agreement, which includes a general release of claims against the Company. As a result, we estimate that we will incur aggregate restructuring charges between $1.1 million and $1.7 million related to one-time termination benefits, including severance, and other employee related costs, all of which are expected to be incurred and paid during the second quarter of our fiscal year 2018 ending October 31, 2017.

Series E Preferred Stock Dividend

On September 5, 2017, our Board of Directors declared a quarterly cash dividend of $0.65625 per share on our Series E Preferred Stock. The dividend payment is equivalent to an annualized 10.50% per share, based on the $25.00 per share stated liquidation preference, accruing from July 1, 2017 through September 30, 2017. The cash dividend is payable on October 2, 2017 to holders of the Series E Preferred Stock of record on September 18, 2017.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Jul. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Going Concern

Going Concern

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all short-term investments readily convertible to cash with an initial maturity of three months or less to be cash equivalents.

Restricted Cash

Restricted Cash

Concentrations of Credit Risk and Customer Base

Concentrations of Credit Risk and Customer Base

Our future results of operations could be adversely affected if revenue from any one of our primary customers is significantly reduced or eliminated.

Comprehensive Loss

Comprehensive Loss

Impairment

Impairment

Fair Value Measurements

Fair Value Measurements

Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.

Customer Deposits

Customer Deposits

Customer deposits primarily represent advance billings and/or payments received from Avid’s third-party customers prior to the initiation of contract manufacturing services.

Revenue Recognition

Research and Development Expenses

Share-based Compensation

Share-based Compensation

Basic and Dilutive Net Loss Per Common Share

	July 31, 2017		July 31, 2016

Stock Options		102,074		–
ESPP		2,184		2,663
Total		104,258		2,663

	July 31, 2017		July 31, 2016

Stock Options		3,602,628		3,980,357
Warrants		39,040		39,040
Series E Preferred Stock		1,978,783		1,894,337
Total		5,620,451		5,913,734

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Pending Adoption of Recent Accounting Pronouncements

Pending Adoption of Recent Accounting Pronouncements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICY (Tables)

3 Months Ended

Jul. 31, 2017

ESPP [Member]

Schedule of antidilutive shares

	July 31, 2017		July 31, 2016

Stock Options		102,074		–
ESPP		2,184		2,663
Total		104,258		2,663

Stock Options, Warrants, and Series E Preferred Stock (assuming the if-converted method) [Member]

Schedule of antidilutive shares

	July 31, 2017		July 31, 2016

Stock Options		3,602,628		3,980,357
Warrants		39,040		39,040
Series E Preferred Stock		1,978,783		1,894,337
Total		5,620,451		5,913,734

3. TRADE AND OTHER RECEIVABLES (Tables)

3 Months Ended

Jul. 31, 2017

Receivables [Abstract]

Trade and other receivables

	July 31, 2017		April 30, 2017
Trade receivables⁽¹⁾	$	5,452,000	$	7,274,000
Other receivables		2,432,000		468,000
Total trade and other receivables	$	7,884,000	$	7,742,000

______________

(1) Represents amounts billed for contract manufacturing services provided by Avid.

4. PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Jul. 31, 2017

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

	July 31, 2017			April 30, 2017
Leasehold improvements	$	20,675,000		$	20,098,000
Laboratory equipment		11,340,000			10,777,000
Furniture, fixtures, office equipment and software		4,726,000			4,499,000
Total property and equipment		36,741,000			35,374,000
Less accumulated depreciation and amortization		(12,342,000	)		(11,700,000	)
Total property and equipment, net	$	24,399,000		$	23,674,000

5. INVENTORIES (Tables)

3 Months Ended

Jul. 31, 2017

Inventory Disclosure [Abstract]

Schedule of inventories

	July 31, 2017		April 30, 2017
Raw materials	$	10,721,000	$	11,304,000
Work-in-process		13,514,000		13,755,000
Finished goods		–		8,040,000
Total inventories	$	24,235,000	$	33,099,000

7. EQUITY COMPENSATION PLANS (Tables)

3 Months Ended

Jul. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of stock option transaction activity

Stock Options	Shares			Weighted Average Exercisable Price
Outstanding, May 1, 2017		4,081,548		$ 8.77
Granted		20,213		$ 4.43
Exercised		(9,959	)	$ 3.43
Canceled or expired		(69,666	)	$ 10.45
Outstanding, July 31, 2017		4,022,136		$ 8.73

Schedule of share-based compensation expense

	Three Months Ended July 31,
	2017		2016
Cost of contract manufacturing	$	–	$	42,000
Research and development		269,000		370,000
Selling, general and administrative		216,000		425,000
Total share-based compensation expense	$	485,000	$	837,000

Share-based compensation from:
Stock options	$	409,000	$	731,000
Employee stock purchase plan		76,000		106,000
	$	485,000	$	837,000

9. SEGMENT REPORTING (Tables)

3 Months Ended

Jul. 31, 2017

Segment Reporting [Abstract]

Segment information

	Three Months Ended July 31,
	2017			2016

Contract manufacturing services revenue	$	27,077,000		$	5,609,000
Cost of contract manufacturing services		20,448,000			3,062,000
Gross profit		6,629,000			2,547,000
Research and development expense		(3,645,000	)		(8,569,000	)
Selling, general and administrative expense		(4,213,000	)		(5,060,000	)
Other income (expense), net		24,000			25,000
Net loss	$	(1,205,000	)	$	(11,057,000	)

Customer Revenue

	Three Months Ended July 31,
	2017		2016

Halozyme Therapeutics, Inc.		78%		65%
Customer A		6%		29%
Other customers		16%		6%
Total		100%		100%

Schedule of long-lived assets by segment

	July 31, 2017		April 30, 2017
Long-lived Assets, net:
Contract manufacturing services	$	23,901,000	$	22,599,000
Products in research and development		498,000		1,075,000
Total	$	24,399,000	$	23,674,000

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares) - shares	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Stock Options [Member]
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding	102,074	0
ESPP [Member]
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding	2,184	2,663
Options and ESPP Warrants [Member]
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding	104,258	2,663

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares, If-Converted) - If-Converted Method [Member] - shares	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Stock Options [Member]
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding	3,602,628	3,980,357
Warrants [Member]
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding	39,040	39,040
Series E Preferred Stock [Member]
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding	1,978,783	1,894,337
Options, Warrants and Series E Preferred Stock [Member]
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding	5,620,451	5,913,734

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016	Sep. 11, 2017	Apr. 30, 2017	Apr. 30, 2016
Cash and cash equivalents	$ 37,256,000	$ 44,195,000		$ 46,799,000	$ 61,412,000
Restricted cash pledged as collateral	1,150,000			$ 1,150,000
Asset impairment charges	$ 0	$ 0
Accounts Receivable [Member] \| Four Customers [Member]
Concentration percentage	83.00%	93.00%
Common Stock [Member]
Gross proceeds from issuance of equity	$ 4,304,000
Series E Preferred Stock [Member] \| Subsequent Event [Member]
Amount remaining under shelf registration statements			$ 67,674,000

3. TRADE AND OTHER RECEIVABLES (Details) - USD ($)

Jul. 31, 2017

Apr. 30, 2017

Receivables [Abstract]

Trade receivables

^[1]

$ 5,452,000

$ 7,274,000

Other receivables, net

2,432,000

468,000

Total trade and other receivables, net

$ 7,884,000

$ 7,742,000

[1]	Represents amounts billed for contract manufacturing services provided by Avid.

4. PROPERTY AND EQUIPMENT (Details) - USD ($)	Jul. 31, 2017	Apr. 30, 2017
Property, Plant and Equipment [Abstract]
Leasehold improvements	$ 20,675,000	$ 20,098,000
Laboratory equipment	11,340,000	10,777,000
Furniture, fixtures, office equipment and software	4,726,000	4,499,000
Total property and equipment	36,741,000	35,374,000
Less accumulated depreciation and amortization	(12,342,000)	(11,700,000)
Total property and equipment, net	$ 24,399,000	$ 23,674,000

5. INVENTORIES (Details) - USD ($)	Jul. 31, 2017	Apr. 30, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 10,721,000	$ 11,304,000
Work-in-process	13,514,000	13,755,000
Finished goods	0	8,040,000
Total inventories	$ 24,235,000	$ 33,099,000

6. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	3 Months Ended
6. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	Jul. 31, 2017	Jul. 31, 2016
Commissions and other issuance costs	$ 111,000	$ 55,000
June 2017 [Member]
Liquidation preference	$ 25.00
Stock Incentive Plans [Member]
Shares reserved for future issuance	5,612,106
ESPP [Member]
Shares reserved for future issuance	1,359,736
Warrants [Member]
Shares reserved for future issuance	39,040
Common Stock [Member]
Proceeds from issuance of stock	$ 4,304,000
Common Stock [Member] \| August 2015 AMI Sales Agreement [Member]
Remaining Aggregate Gross Proceeds Available Under Agreement	0
Proceeds from issuance of stock	$ 4,304,000
Shares issued, new	1,051,258
Commissions and other issuance costs	$ 111,000
Series E Preferred Stock [Member]
Shares reserved for future issuance	6,826,435
Series E Preferred Stock [Member] \| June 2017 [Member]
Declaration Date	Jun. 06, 2017
Dividend per share	$ 0.65625
Annualized percentage rate	10.50%
Accrual period	April 1, 2017 through June 30, 2017
Record date	Jun. 19, 2017
Payment date	Jul. 03, 2017
Dividend paid	$ 1,081,000

7. EQUITY COMPENSATION PLANS (Details - Option activity)	3 Months Ended
	Jul. 31, 2017 $ / shares shares
Number of Options
Number of Options Outstanding, Beginning \| shares	4,081,548
Number of Options Granted \| shares	20,213
Number of Options Exercised \| shares	(9,959)
Number of Options Cancelled or Expired \| shares	(69,666)
Number of Options Outstanding, Ending \| shares	4,022,136
Weighted Average Exercise Price
Weighted Average Exercise Price Outstanding, Beginning \| $ / shares	$ 8.77
Weighted Average Exercise Price Granted \| $ / shares	4.43
Weighted Average Exercise Price Exercised \| $ / shares	3.43
Weighted Average Exercise Price Canceled \| $ / shares	10.45
Weighted Average Exercise Price Outstanding, Ending \| $ / shares	$ 8.73

7. EQUITY COMPENSATION PLANS (Details - Share based compensation) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Share based compensation	$ 485,000	$ 837,000
Cost of contract manufacturing [Member]
Share based compensation	0	42,000
Research and development [Member]
Share based compensation	269,000	370,000
Selling, general and administrative [Member]
Share based compensation	216,000	425,000
Stock Options [Member]
Share based compensation	409,000	731,000
ESPP [Member]
Share based compensation	$ 76,000	$ 106,000

7. EQUITY COMPENSATION PLANS (Details Narrative)	3 Months Ended
7. EQUITY COMPENSATION PLANS (Details Narrative)	Jul. 31, 2017 USD ($) shares
Employees [Member]
Unrecognized compensation cost \| $	$ 1,570,000
Unrecognized cost amortization period	1 year 5 months 5 days
2010 ESPP [Member]
Shares authorized under plan	2,142,857
Shares available to purchase	1,359,736
Stock Incentive Plans [Member]
Shares reserved for future issuance	5,612,106
Stock Options [Member]
Shares reserved for future issuance	4,022,136
Share-based awards [Member]
Shares reserved for future issuance	1,589,970

8. WARRANTS (Details Narrative)	3 Months Ended
8. WARRANTS (Details Narrative)	Jul. 31, 2017 $ / shares shares
Warrants and Rights Note Disclosure [Abstract]
Warrants issued	0
Warrants exercised	0
Warrants outstanding	39,040
Warrant exercise price \| $ / shares	$ 17.29
Warrants exercisable expiration date	Aug. 30, 2018

9. SEGMENT REPORTING (Details) - USD ($)	3 Months Ended
9. SEGMENT REPORTING (Details) - USD ($)	Jul. 31, 2017	Jul. 31, 2016
Segment Reporting [Abstract]
Contract manufacturing services revenue	$ 27,077,000	$ 5,609,000
Cost of contract manufacturing services	20,448,000	3,062,000
Gross profit	6,629,000	2,547,000
Research and development expense	(3,645,000)	(8,569,000)
Selling, general and administrative expense	(4,213,000)	(5,060,000)
Other income (expense), net	24,000	25,000
Net loss	$ (1,205,000)	$ (11,057,000)

9. SEGMENT REPORTING (Details - Percentage breakdown) - Sales Revenue, Net [Member]	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Customer revenue as a percentage of revenue	100.00%	100.00%
Halozyme Therapeutics [Member]
Customer revenue as a percentage of revenue	78.00%	65.00%
Customer A [Member]
Customer revenue as a percentage of revenue	6.00%	29.00%
Other Customers [Member]
Customer revenue as a percentage of revenue	16.00%	6.00%

9. SEGMENT REPORTING (Details - Long lived assets) - USD ($)	Jul. 31, 2017	Apr. 30, 2017
Long-lived assets	$ 24,399,000	$ 23,674,000
Contract Manufacturing Services [Member]
Long-lived assets	23,901,000	22,599,000
Products in research and development [Member]
Long-lived assets	$ 498,000	$ 1,075,000

11. SUBSEQUENT EVENTS (Details Narrative) - $ / shares	1 Months Ended	3 Months Ended
11. SUBSEQUENT EVENTS (Details Narrative) - $ / shares	Sep. 05, 2017	Oct. 31, 2017
Subsequent Event [Member]
Restructuring charge estimate		$1.1 million and $1.7 million
Series E Preferred Stock [Member] \| September 2016 [Member]
Declaration Date	Sep. 05, 2017
Dividend per share	$ 0.65625
Annualized percentage rate	10.50%
Liquidation preference	$ 25.00
Accrual period	July 1, 2017 through September 30, 2017
Record date	Sep. 18, 2017
Payment date	Oct. 02, 2017

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)	3 Months Ended
	Jul. 31, 2017	Jul. 31, 2016
Statement of Cash Flows [Abstract]
Stock Issuance costs	$ 111,000	$ 55,000

1. ORGANIZATION AND BUSINESS DESCRIPTION (Details Narrative)	3 Months Ended
	Jul. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reverse stock split	On July 7, 2017, we effected a reverse stock split of our outstanding shares of common stock at a ratio of one-for-seven. The reverse stock split took effect with the opening of trading on July 10, 2017.

3. TRADE AND OTHER RECEIVABLES (Details Narrative) - USD ($)	Jul. 31, 2017	Apr. 30, 2017
Receivables [Abstract]
Allowance for doubtful accounts	$ 0	$ 0

4. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
4. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	Jul. 31, 2017	Jul. 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 642,000	$ 613,000

5. INVENTORIES (Details Narrative) - USD ($)	3 Months Ended
5. INVENTORIES (Details Narrative) - USD ($)	Jul. 31, 2017	Jul. 31, 2016
Cost of contract manufacturing	$ 20,448,000	$ 3,062,000
Idle Capacity Costs [Member]
Cost of contract manufacturing	$ 900,000	$ 0