Peregrine Pharmaceuticals' CEO Discusses Q3 2012 Results - Earnings Call Transcript

Peregrine Pharmaceuticals (PPHM)

Q3 2012 Earnings Call

March 09, 2012 4:30 pm ET

Executives

Jay Carlson -

Steven W. King - Chief Executive Officer, President, Director, Chief Executive Officer of Avid Bioservices Inc and President of Avid Bioservices Inc

Joseph S. Shan - Vice President of Clinical & Regulatory Affairs

Robert Garnick - Head of Regulatory Affairs

Paul J. Lytle - Chief Financial Officer, Principal Accounting Officer, Corporate Secretary, Chief Financial Officer of Avid Bioservices and Corporate Secretary of Avid Bioservices

Analysts

Charles C. Duncan - JMP Securities LLC, Research Division

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Edward H. Nash - Cowen and Company, LLC, Research Division

George B. Zavoico - McNicoll, Lewis & Vlak LLC, Research Division

Stephen M. Dunn - LifeTech Capital, Research Division

David Brian Musket - ProMed Management, Inc.

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Peregrine Pharmaceuticals Third Quarter Fiscal Year 2012 Financial Results Conference Call. [Operator Instructions] As a reminder, this program is being recorded. I would now like to introduce your host for today's program, Mr. Jay Carlson, Manager of Investor Relations. Please go ahead, sir.

Jay Carlson

Thanks, Jonathan. Good afternoon, and thank you for joining us. On today's call, we have Steve King, President and Chief Executive Officer; Paul Lytle, Chief Financial Officer; Joe Shan, Vice President of Clinical and Regulatory Affairs; and Rob Garnick, Head of Regulatory Affairs.

Steve will begin by providing an overview of our clinical progress over the last quarter and highlight what will be numerous near-term clinical data milestones. Joe and Rob will discuss our clinical and regulatory plans as we advance our 3 Phase II clinical programs for bavituximab and Cotara. Paul will then finish with a summary of our financial results for the third quarter 2012. After our prepared remarks, we welcome your questions.

Before we begin, we would like to remind you that during this call, we will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ. These forward-looking statements reflect our current views about future events and financial performance and are identified by the use of terms and phrases such as believe, expect, plan, anticipate, on target and similar expressions identifying forward-looking statements. These risks include, but are not limited to, the risk factors detailed from time to time in our filings with the Securities and Exchange Commission, including but not limited to, the annual report on Form 10-K for our fiscal year 2011 ended April 30, 2011, and quarterly report on Form 10-Q for the third quarter ended January 31, 2012, which will be filed later today.

Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from our expectations, and we expressly do not undertake any duty to update forward-looking statements, whether as a result of new information, future events or otherwise.

I'll now turn the call over to Steve.

Steven W. King

Thanks, Jay. In the third quarter, we have continued to make progress in all areas of our business, including clinical development for both our bavituximab and Cotara programs and in our contract manufacturing business, Avid Bioservices. These advancements had set the stage for what we expect will be an exciting rest of 2012, with a number of potential catalyst on the horizon, including data from 7 ongoing clinical trials, results of negotiations around a pivotal trial design for Cotara and record revenues in our biomanufacturing business, Avid Bioservices.

Let me begin by just addressing the most recent news. This morning, we announced data from our randomized Phase II front-line non-small cell lung cancer trial, evaluating bavituximab in combination with carboplatin and paclitaxel. Joe will cover the results in more detail, but just let me say that in our opinion we view the results is encouraging but inconclusive. Based on the fact that by one measure, which actually much better matched historical experience of carboplatin and paclitaxel, we saw difference in progression-free survival, or PFS. Whereas by another measure, which is supposedly more robust but was not consistent with historical experience of carboplatin and paclitaxel, we saw very minimal differences in PFS.

PFS is a surrogate endpoint for the ultimate endpoint, which is median overall survival, which does not have the same issues with bias and uncertainty associated with surrogate endpoints. This is also the most important endpoint, particularly in a front-line disease setting. So in no way that these result dampen our enthusiasm for the bavituximab program, it simply means that we now have to wait for median overall survival from this study to make a judgment on the overall trial results.

In addition, during the quarter, we announced initial data from our randomized Phase II trial of bavituximab in patients infected with genotype 1 HCV. The results from this trial were encouraging, and we believe they warrant further study of bavituximab in HCV patients, as part of a longer dosing regimen with some of the new antivirals that are coming into the market. We are actively seeking a development partner with the resources to advance this program as we feel that bavituximab holds potential to be part of a better tolerated HCV combination therapy. Joe will discuss these results in more detail.

In addition to the progress in the bavituximab clinical programs, we also continue to make progress in our discussions with the FDA concerning a possible pivotal trial design for Cotara. Rob will go into more detail on those discussions and give his thoughts on progressing the Cotara program. And we continue to see good revenues coming through our manufacturing subsidiary, Avid Bioservices. Paul will cover this as part of his financial results discussions.

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