Peregrine Pharmaceuticals, Inc. (NASDAQ:PPHM) announced that it intends to increase the size of its Board of Directors from four to up to seven members through the addition of new highly-qualified independent directors with CDMO and biologics experience. The Company also announced that it plans to initiate a search for a dedicated President to lead its wholly-owned CDMO subsidiary, Avid Bioservices, Inc. Lastly, the Company today provided an update on its evaluation of strategic options for advancing its R&D business.
Addition of Board Members
“We look forward to adding new directors with valuable CDMO and biologics industry experience and skills to the Board, broadening our overall expertise and complementing the capabilities and experience of our current directors,” said Carlton Johnson, Chairman of Peregrine’s Board of Directors. “The Board and management will benefit from the additional perspectives provided by new directors who share our commitment to maximizing stockholder value.”
“The Board has played an important role in supporting the growth of the CDMO business and has provided the management team with valuable insight and support over many years. This support was critical in allowing us to build a successful CDMO business while simultaneously advancing our R&D pipeline,” said Steven King, President, CEO and Director of Peregrine and President of Avid Bioservices. “As we continue to evaluate a number of strategic options to sharpen the focus of each of our two distinct businesses and enhance shareholder value, I am confident that these planned additions will enhance our ability to successfully lead the Company through this critical process.”
Search for Dedicated Avid Bioservices President
Peregrine also plans to appoint a new dedicated President to lead Avid and focus entirely on executing the CDMO business’ growth strategy. The new President will report directly to Mr. King while the company continues to evaluate strategic options including potentially separating the R&D and CDMO businesses. The Company believes that the addition of the new President for Avid and the addition of board members with CDMO experience will strengthen Avid’s position for future success regardless of the strategic alternatives the Company may pursue. Mr. King, who has served as President of Avid since its formation, will continue to serve in his current role until a candidate is hired in order to ensure continued high level services for its current customers and to make sure there is a successful and smooth transition to the new leadership.
Avid was formed in 2002 to service the attractive commercial bio-manufacturing market. Over the last 15 years, Avid has become a leader in implementing disposable bio-manufacturing processes at commercial scale for large molecule API manufacturing. The Company has achieved a premiere customer list, excellent regulatory track record and strong competitive position from which it can capitalize on favorable industry growth trends. In fiscal year 2017, Avid generated revenues of over $57 million and achieved a five-year compounded annual revenue growth rate of 31%.
“Avid has experienced remarkable and steady growth over the last several years, and we are taking steps to ensure that it remains well-positioned to take advantage of the growing demand for biologics and biosimilar drugs,” said King. “We have a clear strategic plan and proven track-record in our CDMO business, as evidenced by our investments in the state-of-the-art Myford facility, our progress securing new customers and expanding our services offerings, and our recent record financial results. With the addition of a new dedicated President, Avid will benefit from a leadership team focused solely on executing its long-term strategic plan of driving growth, diversifying its customer base and optimizing its operations and facilities.”
R&D Business Update
Continued King, “At the same time, we are actively evaluating strategic options for advancing our R&D business. We are working with researchers at some of the leading research institutes in the world and have seen renewed and encouraging interest in the bavituximab program from influential key opinion leaders. We believe recent promising clinical data from our bavituximab program, in addition to our other R&D assets, strongly supports continued advancement of the pipeline with the goal of providing patients with new cancer treatment options. Leveraging the scientific expertise of key opinion leaders, we will apply great rigor in assessing additional investments and identifying the best way to move our R&D programs forward.”
“As we recently noted on our fourth quarter conference call, Peregrine is at the start of a transformative journey, which includes exploring strategic alternatives,” said King. “We are focused on enhancing shareholder returns as we capitalize on long-term opportunities available to Avid and pursue the optimal path forward for our drug development franchise. The search for new Board members and a new dedicated leader for Avid mark the first in a series of planned strategic actions that will strengthen the position of Avid as a more independent and potentially as a completely independent entity with a focus on revenue growth and increased profitability. We will also continue to explore the best strategic alternatives for the R&D pipeline in order to maximize value for stockholders.”
Peregrine will be working with a nationally recognized executive search firm to assist in identifying highly qualified candidates for the Avid President and Board of Directors positions. The Company intends to appoint a President to the Avid business in the coming months and include the identified directors in its slate of nominees for election to the Board at its next Annual Meeting of Stockholders.
Shares of Peregrine closed on Friday at $4.28, down $0.32 or 6.96%. 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 $0.78 and its 200-day moving average is $0.58.
On the ratings front, Noble Financial analyst Kumaraguru Raja reiterated a Buy rating on PPHM, in a report issued on July 17. According to TipRanks.com, Raja has a yearly average loss of 11.1%, a 50% success rate, and is ranked #4009 out of 4627 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.