Peregrine Pharmaceuticals (PPHM) Announces Fiscal Fourth Quarter Results; Shares Fall 15%


Peregrine Pharmaceuticals (NASDAQ:PPHM) announced financial results for the fourth quarter and fiscal year (FY) ended April 30, 2017, and provided an update on its contract manufacturing operations, research and development programs, and other corporate highlights.

Highlights Since January 31, 2017

“We are very pleased to announce that the business recorded its highest annual revenue to date during fiscal 2017,” stated Steven W. King, president and chief executive officer of Peregrine, and president of Avid Bioservices.  “While we are happy to report continued year-over-year revenue growth, we are projecting revenues for FY 2018 to be similar with FY 2017 due to recent changes in the forecast of a large customer and a delayed regulatory filing for another customer.  We believe this is a temporary lull and remain confident that Avid is in a strong position for continued growth in the future.”  Mr. King continued, “An important part of continuing revenue growth and reducing risk for the business is to attract new customers.  On that front, we have recently signed four new customers that we expect to contribute to top-line revenue in FY 2018 and into the future.  In addition, we successfully completed three process validation campaigns this fiscal year for existing third-party customers which we believe may significantly contribute to future revenue as these customers move toward building inventory for their potential launch, and commercial supply.

“We are also continuing to take other important steps to ensure Avid’s growth in the coming years.  As part of this effort, we have recently installed two new 2,000 liter bioreactors in our Myford facility, and we already have commitments for part of this capacity.  Due to its state-of-the-art and modular design, there remains potential to install additional bioreactors in Myford, which will allow us to continue growing the business within our current facilities.

“Turning to the Peregrine business, we were able to generate some of the most compelling bavituximab data to date, further supporting the combination of bavituximab and checkpoint inhibitors even while reducing R&D spending by over 50% in FY 2017.  The clinical findings came from the comprehensive analysis of maturing Phase III SUNRISE data while impressive preclinical results came from our collaborators at Memorial Sloan Kettering Cancer Center (MSKCC). The researchers at MSKCC presented promising preclinical data combining PS-targeting with adoptive T cell transfer therapy which may support the combination of bavituximab with CAR-T cell immunotherapy in the future.

“Both Peregrine and Avid have achieved important milestones in recent quarters.  The success of Avid and its continued revenue growth with the compelling data we have seen from the Phase III SUNRISE trial have led us to explore various strategic options that we believe will enable us to enhance stockholder value for all stockholders, including the possible separation of these two distinct businesses.”

Research and Development Highlights

“The most compelling data to date from the Phase III SUNRISE trial was presented at AACR and together with the PD-L1 results presented at ASCO this year add to the growing body of data supporting the further development of bavituximab with checkpoint inhibitors,” said Joseph Shan, vice president of clinical and regulatory affairs at Peregrine.

AACR Highlights: 

In a subgroup analysis, Peregrine researchers looked at the outcome of 91 patients that were enrolled in the Phase III SUNRISE trial that were subsequently treated with anti-PD-1/PD-L1 immune checkpoint inhibitors (“ICI’s”) post study treatments.  The results from this analysis demonstrated that the patients who received docetaxel plus bavituximab (Doc+Bavi) and subsequent ICI had not yet reached median overall survival (“mOS”) compared to mOS of 13.0 months for patients who received docetaxel plus placebo (Doc+Placebo) (hazard ratio [HR], 0.43; p=0.005).  The statistically significant difference between the two arms in the trial provides strong rationale for combining bavituximab with ICI’s and supports the hypothesis that bavituximab may modulate the tumor microenvironment to enhance the anti-tumor activity of ICI’s.

Shares of Peregrine are falling nearly 15% to $5.58 in after-hours trading Friday. PPHM has a 1-year high of $5.78 and a 1-year low of $1.97. The stock’s 50-day moving average is $0.71 and its 200-day moving average is $0.56.

On the ratings front, Noble Financial analyst Mark Jordan reiterated a Buy rating on PPHM, in a report issued on June 7. According to TipRanks.com, Jordan has a yearly average return of 1.7%, a 58% success rate, and is ranked #2044 out of 4600 analysts.

Peregrine Pharmaceuticals, Inc. is a biopharmaceutical company that engages in the provision of monoclonal antibody therapeutics. It operates through Peregrine and Avid segments. The Peregrine segment refers to research and development of monoclonal antibodies for the treatment and diagnosis of cancer. The Avid segment provides contract management services for peregrine and third-party customers on a fee-for-services basis.