Delaware
|
95-3698422
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
14282 Franklin Avenue, Tustin, California
|
92780
|
(Address of principal executive offices)
|
(Zip Code)
|
(714) 508-6000
|
|
(Registrant's telephone number, including area code)
|
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Common Stock ($0.001 par value)
Preferred Stock Purchase Rights
|
The Nasdaq Stock Market LLC
|
Securities registered pursuant to Section 12(g) of the Act:
|
|
None
|
Large accelerated filer
o
|
Accelerated filer
x
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Item 1.
|
Business
|
2
|
Overview
|
2
|
|
Products in Clinical-Stage Development
|
4
|
|
Government-Sponsored Programs
|
9
|
|
Preclinical Programs
|
9
|
|
In-Licensing Collaborations
|
9
|
|
Out-Licensing Collaborations
|
11
|
|
Government Regulation
|
12
|
|
Manufacturing and Raw Materials
|
14
|
|
Patents and Trade Secrets
|
15
|
|
Customer Concentration and Geographic Area Financial Information
|
17
|
|
Marketing Our Potential Products
|
17
|
|
Competition
|
17
|
|
Research and Development
|
19
|
|
Corporate Governance
|
19
|
|
Human Resources
|
19
|
|
Glossary of Terms
|
20
|
|
Item 1A.
|
Risk Factors
|
22
|
Item 1B.
|
Unresolved Staff Comments
|
38
|
Item 2.
|
Properties
|
38
|
Item 3.
|
Legal Proceedings
|
38
|
Item 4.
|
[Removed And Reserved]
|
38
|
PART II
|
|
39 |
Item 5.
|
Market For Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities
|
39
|
Item 6.
|
Selected Financial Data
|
40
|
Item 7.
|
Management’s Discussion And Analysis Of Financial Condition And Results Of Operations
|
41
|
Item 7A.
|
Quantitative And Qualitative Disclosures About Market Risk
|
56
|
Item 8.
|
Financial Statements And Supplementary Data
|
56
|
Item 9.
|
Changes In And Disagreements With Accountants On Accounting And Financial Disclosures
|
56
|
Item 9A.
|
Controls And Procedures
|
56
|
Item 9B.
|
Other Information
|
57
|
PART III
|
|
60 |
Item 10.
|
Directors, Executive Officers And Corporate Governance
|
60
|
Item 11.
|
Executive Compensation
|
60
|
Item 12.
|
Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters
|
60
|
Item 13.
|
Certain Relationships And Related Transactions, And Director Independence
|
60
|
Item 14.
|
Principal Accounting Fees and Services
|
60
|
PART IV
|
|
61 |
Item 15.
|
Exhibits And Financial Statement Schedules
|
61
|
SIGNATURES
|
67
|
ITEM 1.
|
BUSINESS
|
·
|
Leverage our phosphatidylserine (“PS”)-targeting platform, including our lead PS-targeting antibody bavituximab, to develop first-in-class antibodies to treat a broad range of cancer and viral infections;
|
·
|
Advance three later-stage Phase II clinical programs for bavituximab and Cotara
®
in different indications, all representing significant unmet medical needs for patients;
|
·
|
Explore additional oncology indications and therapeutic combinations for bavituximab by offering a cost-effective investigator-sponsored trials (“IST”) program; and
|
·
|
Prepare for commercial scale manufacturing of our products through our strategic asset, Avid Bioservices, while also providing biomanufacturing services to Avid’s third-party clients on a fee-for-service basis.
|
Product
|
Indication
|
Trial Design
|
Trial Status
|
Bavituximab plus carboplatin and paclitaxel versus carboplatin and paclitaxel alone
|
Front-line NSCLC
|
Phase IIb randomized trial designed to treat up to 86 patients
Endpoint: Overall response rate (“ORR”)
Secondary Endpoints: Median progression-free survival (“PFS”), median overall survival (“OS”), duration of response, safety
|
Trial is enrolling and treating patients
|
Bavituximab plus docetaxel
versus placebo plus docetaxel
|
Second-line NSCLC
|
Phase IIb randomized, double-blinded, placebo-controlled trial designed to treat up to 120 patients
Endpoint: ORR
Secondary Endpoints: Median PFS, median OS, duration of response, safety
|
Trial is enrolling and treating patients
|
Bavituximab plus gemcitabine
versus gemcitabine alone
|
Pancreatic cancer
|
Phase II randomized trial designed to treat up to 70 patients
Endpoint: Median OS
Secondary Endpoints: ORR, PFS, duration of response, safety
|
Trial is enrolling and treating patients
|
Cotara as a single treatment
|
Recurrent GBM
|
Phase II safety and efficacy study treated 41 patients at first relapse
|
Final patient treated in December 2010. Interim median OS was 8.8 months (38 weeks) as of June 2011. Patient follow-up is ongoing while planning to meet with the FDA in 2011.
|
Bavituximab
plus ribavirin
versus pegylated interferon alpha-2a plus ribavirin
|
Chronic hepatitis C virus (“HCV”)
|
Phase II randomized trial designed to treat up to 66 naïve, genotype 1 patients
Endpoint: Proportion of patients achieving early virologic response (EVR) at 12 weeks
Secondary Endpoints: Safety, tolerability, HCV viral kinetics
|
Trial is enrolling and treating patients
|
Licensor
|
Agreement
Date
|
Expiration
Date
|
Total Milestones Incurred
To Date
|
Potential Future Milestone
Obligations
|
|||||||||
UTSWMC
|
August 2001
|
(1) | $ | 98,000 | $ | 375,000 | |||||||
UTSWMC
|
August 2005
|
(2) | $ | 85,000 | $ | 375,000 | |||||||
Lonza
|
March 2005
|
(3) | $ | 64,000 | (4) | ||||||||
Avanir
|
December 2003
|
(5) | $ | 50,000 | $ | 1,050,000 | |||||||
Genentech, Inc.
|
November 2003
|
December 2018
|
$ | 500,000 | $ | 5,000,000 | |||||||
Total
|
$ | 797,000 | $ | 6,800,000 |
(1)
|
Expiration date of the license agreement occurs upon expiry of underlying patents. These patents, and certain related patent applications that may issue as patents, are currently set to expire between 2019 and 2021.
|
(2)
|
Expiration date of the license agreement occurs upon expiry of underlying patents. These patents, and certain related patent applications that may issue as patents, are currently set to expire between 2023 and 2025.
|
(3)
|
Expiration date of the license agreement is 15 years from first commercial sale or upon expiry of underlying patents, whichever occurs last. To date, we have no commercial sales under the license agreement nor do we expect any commercial sales in the near future. The last patent covered under this license agreement expires in November 2016.
|
(4)
|
In fiscal year 2011, we incurred a milestone fee of 37,500 pounds sterling ($64,000 U.S.) upon commencement of patient enrollment in our first randomized phase II clinical trial, which amount will continue as an annual license fee thereafter; the annual license fee increases to 75,000 pounds sterling per annum (or approximately $125,000 U.S. based on the exchange rate at April 30, 2011) upon completion of patient enrollment in our first randomized phase II clinical trial. In addition, in the event we utilize an outside contract manufacturer other than Lonza to manufacture bavituximab for commercial purposes, we would owe Lonza 300,000 pounds sterling per year (or approximately $500,000 U.S. based on the exchange rate at April 30, 2011).
|
(5)
|
Expiration date of license agreement is 10 years from first commercial sale in each respective country. To date we have no commercial sales under the license agreement nor do we expect any commercial sales in the near future.
|
1.
|
Preclinical testing.
This generally includes evaluation of our products in the laboratory or in animals to determine characterization, safety and efficacy. Some
preclinical studies must be conducted by laboratories that comply with FDA regulations regarding good laboratory practice.
|
2.
|
Submission to the FDA of an Investigational New Drug application (“IND”).
The results of preclinical studies, together with manufacturing information, analytical data and proposed clinical trial protocols, are submitted to the FDA as part of an IND, which must become effective before the clinical trials can begin.
Once the
IND is filed, the FDA has 30 days to review it. The IND will automatically become effective 30 days after the FDA receives it, unless the FDA indicates prior to the end of the 30-day period that the proposed protocol raises concerns that must be resolved to the FDA’s satisfaction before the trial may proceed. If the FDA raises concerns, we may be unable to resolve the proposed protocol to the FDA’s approval in a timely fashion, if at all.
|
3.
|
Completion of clinical trials
. Human clinical trials are necessary to seek approval for a new drug or biologic and typically involve a three-phase process. In Phase I, small clinical trials are generally conducted to determine the safety of the product. In Phase II, clinical trials are generally conducted to assess safety, acceptable dose, and gain preliminary evidence of the efficacy of the product. In Phase III, clinical trials are generally conducted to provide sufficient data for the statistically valid proof of safety and efficacy. A
clinical trial must be conducted according to good clinical practices under protocols that detail the trial’s objectives, inclusion and exclusion criteria, the parameters to be used to monitor safety and the efficacy criteria to be evaluated, and informed consent must be obtained from all study subjects. Each protocol must be submitted to the FDA as part of the IND. The FDA may impose a clinical hold on an ongoing clinical trial if, for example, safety concerns arise, in which case the study cannot recommence without FDA authorization under terms sanctioned by the Agency. In addition, b
efore a clinical trial can be initiated,
each clinical site or hospital administering the product must have the protocol reviewed and approved by an institutional review board (“IRB”). The IRB will consider, among other things, ethical factors and the safety of human subjects. The IRB may require changes in a protocol, which may delay initiation or completion of a study. Phase I, Phase II or Phase III clinical trials may not be completed successfully within any specific period of time, if at all, with respect to any of our potential products. Furthermore, we, the FDA or an IRB may suspend a clinical trial at any time for various reasons, including a finding that the healthy individuals or patients are being exposed to an unacceptable health risk.
|
4.
|
Submission to the FDA of a Biologics License Application (“BLA”) or New Drug Application (“NDA”).
After completion of clinical studies for an investigational product, a BLA or NDA is submitted to the FDA for product marketing approval. No action can be taken to market any new drug or biologic product in the U.S. until the FDA has approved an appropriate marketing application.
|
5.
|
FDA review and approval of the BLA or NDA before the product is commercially sold or shipped.
The results of pre-clinical studies and clinical trials and manufacturing information are submitted to the FDA in the form of a BLA or NDA for approval of the manufacture, marketing and commercial shipment of the product. The FDA may take a number of actions after the BLA or NDA is filed, including but not limited to,
denying the BLA or NDA if applicable regulatory criteria are not satisfied, requiring additional clinical testing or information; or requiring post-market testing and surveillance to monitor the safety or efficacy of the product. Adverse events that are reported after marketing approval can result in additional limitations being placed on the product’s use and, potentially, withdrawal of the product from the market. Any adverse event, either before or after marketing approval, can result in product liability claims against us.
|
ITEM 1A.
|
RISK FACTORS
|
·
|
incur additional indebtedness, except for certain permitted indebtedness. Permitted indebtedness is defined to include accounts payable incurred in the ordinary course of business and leases of equipment or property incurred in the ordinary course of business not to exceed in the aggregate $500,000 outstanding at any one time;
|
·
|
incur additional liens on any of our assets except for certain permitted liens including but not limited to non-exclusive licenses of our intellectual property in the ordinary course of business and exclusive licenses of intellectual property provided they are approved by our board of directors and do not involve bavituximab or Cotara;
|
·
|
make any payment of subordinated debt, except as permitted under the applicable subordination or intercreditor agreement;
|
·
|
merge with or acquire any other entity, or sell all or substantially all of our assets, except as permitted under the Loan Agreement;
|
·
|
pay dividends (other than stock dividends) to our shareholders;
|
·
|
redeem any outstanding shares of our common stock or any outstanding options or warrants to purchase shares of our common stock except in connection with the repurchase of stock from former employees and consultants pursuant to share repurchase agreements provided such repurchases do not exceed $50,000 in the aggregate during any twelve-month period;
|
·
|
enter into transactions with affiliates other than on arms-length terms; and
|
·
|
make any change in any of our business objectives, purposes and operations which has or could be reasonably expected to have a material adverse effect on our business.
|
Net Loss
|
||||
Fiscal Year 2011
|
$ | 34,151,000 | ||
Fiscal Year 2010
|
$ | 14,494,000 | ||
Fiscal Year 2009
|
$ | 16,524,000 |
Number of Shares Reserved
|
||||
Common shares reserved for issuance under outstanding option and restricted stock award
grants and available for issuance under our stock incentive plans
|
8,931,578 | |||
Common shares reserved for and available for issuance under our Employee Stock Purchase Plan
|
4,895,156 | |||
Common shares issuable upon exercise of outstanding warrants
|
219,967 | |||
Total shares of common stock reserved for issuance
|
14,046,701 |
Common Stock
Sales Price
|
Common Stock Daily Trading Volume
(000’s omitted)
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
Fiscal Year 2011
|
||||||||||||||||
Quarter Ended April 30, 2011
|
$ | 2.74 | $ | 2.05 | 929 | 152 | ||||||||||
Quarter Ended January 31, 2011
|
$ | 3.10 | $ | 1.46 | 3,434 | 105 | ||||||||||
Quarter Ended October 31, 2010
|
$ | 2.08 | $ | 1.25 | 4,997 | 118 | ||||||||||
Quarter Ended July 31, 2010
|
$ | 4.14 | $ | 1.51 | 9,520 | 140 | ||||||||||
Fiscal Year 2010
|
||||||||||||||||
Quarter Ended April 30, 2010
|
$ | 4.30 | $ | 2.86 | 1,278 | 66 | ||||||||||
Quarter Ended January 31, 2010
|
$ | 3.46 | $ | 2.51 | 1,384 | 49 | ||||||||||
Quarter Ended October 31, 2009
|
$ | 4.74 | $ | 2.74 | 2,243 | 64 | ||||||||||
Quarter Ended July 31, 2009
|
$ | 5.65 | $ | 1.85 | 7,345 | 39 | ||||||||||
Fiscal Year 2009
|
||||||||||||||||
Quarter Ended April 30, 2009
|
$ | 2.60 | $ | 1.52 | 702 | 14 | ||||||||||
Quarter Ended January 31, 2009
|
$ | 2.35 | $ | 1.10 | 260 | 19 | ||||||||||
Quarter Ended October 31, 2008
|
$ | 2.00 | $ | 1.15 | 263 | 15 | ||||||||||
Quarter Ended July 31, 2008
|
$ | 2.65 | $ | 1.54 | 599 | 21 |
·
|
announcements of technological innovations or new commercial products by us or our competitors;
|
·
|
publicity regarding actual or potential company-sponsored clinical trial and investigator-sponsored clinical trial results relating to products under development by us or our competitors;
|
·
|
significant changes in our financial results or that of our competitors, including our abilities to continue as a going concern;
|
·
|
the offering and sale of shares of our common stock at a discount under an equity transaction;
|
·
|
significant changes in our capital structure;
|
·
|
published reports by securities analysts;
|
·
|
announcements of licensing agreements, joint ventures, strategic alliances, and any other transaction that involves the sale or use of our technologies or competitive technologies;
|
·
|
developments and/or disputes concerning our patent or proprietary rights;
|
·
|
regulatory developments and product safety concerns;
|
·
|
general stock trends in the biotechnology and pharmaceutical industry sectors;
|
·
|
public concerns as to the safety and effectiveness of our products;
|
·
|
economic trends and other external factors, including but not limited to, interest rate fluctuations, economic recession, inflation, foreign market trends, national crisis, and disasters; and
|
·
|
healthcare reimbursement reform and cost-containment measures implemented by government agencies.
|
|
1.
|
Net tangible assets of at least $2,500,000 or market capitalization of at least $35,000,000 or net income of at least $500,000 in either our latest fiscal year or in two of our last three fiscal years;
|
|
2.
|
Public float of at least 500,000 shares;
|
|
3.
|
Market value of our public float of at least $1,000,000;
|
|
4.
|
A minimum closing bid price of $1.00 per share of common stock, without falling below this minimum bid price for a period of thirty consecutive trading days;
|
|
5.
|
At least two market makers; and
|
|
6.
|
At least 300 stockholders, each holding at least 100 shares of common stock.
|
·
|
delays in product development, clinical testing or manufacturing;
|
·
|
unplanned expenditures in product development, clinical testing or manufacturing;
|
·
|
failure in clinical trials or failure to receive regulatory approvals;
|
·
|
emergence of superior or equivalent products;
|
·
|
inability to manufacture on our own, or through others, product candidates on a commercial scale;
|
·
|
inability to market products due to third party proprietary rights; and
|
·
|
failure to achieve market acceptance.
|
·
|
obtaining regulatory approval to commence a clinical trial;
|
·
|
reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
|
·
|
slower than expected rates of patient recruitment due to narrow screening requirements;
|
·
|
the inability of patients to meet FDA or other regulatory authorities imposed protocol requirements;
|
·
|
the inability to retain patients who have initiated a clinical trial but may be prone to withdraw due to various clinical or personal reasons, or who are lost to further follow-up;
|
·
|
the inability to manufacture sufficient quantities of qualified materials under current good manufacturing practices, or cGMPs, for use in clinical trials;
|
·
|
the need or desire to modify our manufacturing processes;
|
·
|
the inability to adequately observe patients after treatment;
|
·
|
changes in regulatory requirements for clinical trials;
|
·
|
the lack of effectiveness during the clinical trials;
|
·
|
unforeseen safety issues;
|
·
|
delays, suspension, or termination of the clinical trials due to the institutional review board responsible for overseeing the study at a particular study site; and
|
·
|
government or regulatory delays or “clinical holds” requiring suspension or termination of the trials.
|
·
|
the patient eligibility criteria defined in the protocol;
|
·
|
the size of the patient population required for analysis of the trial’s primary endpoints;
|
·
|
the proximity of patients to study sites;
|
·
|
the design of the trial;
|
·
|
our ability to recruit clinical trial investigators with the appropriate competencies and experience;
|
·
|
our ability to obtain and maintain patient consents;
|
·
|
the risk that patients enrolled in clinical trials will drop out of the trials before completion; and
|
·
|
competition for patients by clinical trial programs for other treatments.
|
·
|
difficulty in establishing or managing relationships with clinical research organizations and physicians;
|
·
|
different standards for the conduct of clinical trials and/or health care reimbursement;
|
·
|
our inability to locate qualified local consultants, physicians, and partners;
|
·
|
the potential burden of complying with a variety of foreign laws, medical standards and regulatory requirements, including the regulation of pharmaceutical products and treatment; and
|
·
|
general geopolitical risks, such as political and economic instability, and changes in diplomatic and trade relations.
|
·
|
our ability to provide acceptable evidence of safety and efficacy;
|
·
|
relative convenience and ease of administration;
|
·
|
the prevalence and severity of any adverse side effects;
|
·
|
availability of alternative treatments;
|
·
|
pricing and cost effectiveness;
|
·
|
effectiveness of our or our collaborators’ sales and marketing strategy; and
|
·
|
our ability to obtain sufficient third-party insurance coverage or reimbursement.
|
·
|
production yields;
|
·
|
quality control and quality assurance;
|
·
|
shortages of qualified personnel;
|
·
|
compliance with FDA or other regulatory authorities regulations, including the demonstration of purity and potency;
|
·
|
changes in FDA or other regulatory authorities requirements;
|
·
|
production costs; and/or
|
·
|
development of advanced manufacturing techniques and process controls.
|
·
|
the pending patent applications we have filed or to which we have exclusive rights may not result in issued patents or may take longer than we expect to result in issued patents;
|
·
|
the claims of any patents that issue may not provide meaningful protection;
|
·
|
we may be unable to develop additional proprietary technologies that are patentable;
|
·
|
the patents licensed or issued to us may not provide a competitive advantage;
|
·
|
other parties may challenge patents licensed or issued to us;
|
·
|
disputes may arise regarding the invention and corresponding ownership rights in inventions and know-how resulting from the joint creation or use of intellectual property by us, our licensors, corporate partners and other scientific collaborators; and
|
·
|
other parties may design around our patented technologies.
|
·
|
no stockholder action may be taken without a meeting, without prior notice and without a vote; solicitations by consent are thus prohibited;
|
·
|
special meetings of stockholders may be called only by our Board of Directors; and
|
·
|
our Board of Directors has the authority, without further action by the stockholders, to fix the rights and preferences, and issue shares, of preferred stock. An issuance of preferred stock with dividend and liquidation rights senior to the common stock and convertible into a large number of shares of common stock could prevent a potential acquiror from gaining effective economic or voting control.
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
[
REMOVED AND RESERVED
]
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Common Stock
Sales Price
|
||||||||
High
|
Low
|
|||||||
Fiscal Year 2011
|
||||||||
Quarter Ended April 30, 2011
|
$ | 2.74 | $ | 2.05 | ||||
Quarter Ended January 31, 2011
|
$ | 3.10 | $ | 1.46 | ||||
Quarter Ended October 31, 2010
|
$ | 2.08 | $ | 1.25 | ||||
Quarter Ended July 31, 2010
|
$ | 4.14 | $ | 1.51 | ||||
Fiscal Year 2010
|
||||||||
Quarter Ended April 30, 2010
|
$ | 4.30 | $ | 2.86 | ||||
Quarter Ended January 31, 2010
|
$ | 3.46 | $ | 2.51 | ||||
Quarter Ended October 31, 2009
|
$ | 4.74 | $ | 2.74 | ||||
Quarter Ended July 31, 2009
|
$ | 5.65 | $ | 1.85 |
ITEM 6.
|
SELECTED FINANCIAL DATA
|
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||||||
Revenues
|
$ | 13,492,000 | $ | 27,943,000 | $ | 18,151,000 | $ | 6,093,000 | $ | 3,708,000 | ||||||||||
Net loss
|
$ | (34,151,000 | ) | $ | (14,494,000 | ) | $ | (16,524,000 | ) | $ | (23,176,000 | ) | $ | (20,796,000 | ) | |||||
Basic and diluted loss per common share
|
$ | (0.56 | ) | $ | (0.30 | ) | $ | (0.37 | ) | $ | (0.52 | ) | $ | (0.54 | ) | |||||
Weighted average common shares outstanding
|
60,886,392 | 49,065,322 | 45,246,293 | 44,229,669 | 38,459,462 |
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||||||
Cash and cash equivalents
|
$ | 23,075,000 | $ | 19,681,000 | $ | 10,018,000 | $ | 15,130,000 | $ | 16,044,000 | ||||||||||
Working capital
|
$ | 13,136,000 | $ | 12,733,000 | $ | 1,270,000 | $ | 12,403,000 | $ | 14,043,000 | ||||||||||
Total assets
|
$ | 34,766,000 | $ | 29,335,000 | $ | 23,127,000 | $ | 23,057,000 | $ | 22,997,000 | ||||||||||
Long-term debt
|
$ | 124,000 | $ | 1,375,000 | $ | 3,212,000 | $ | 22,000 | $ | 149,000 | ||||||||||
Accumulated deficit
|
$ | (296,005,000 | ) | $ | (261,854,000 | ) | $ | (247,360,000 | ) | $ | (230,836,000 | ) | $ | (207,660,000 | ) | |||||
Stockholders’ equity
|
$ | 15,418,000 | $ | 13,407,000 | $ | 901,000 | $ | 15,595,000 | $ | 16,989,000 |
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Years Ended April 30,
|
Years Ended April 30,
|
|||||||||||||||||||||||
2011
|
2010
|
$ Change
|
2010
|
2009
|
$ Change
|
|||||||||||||||||||
REVENUES:
|
||||||||||||||||||||||||
Contract manufacturing
|
$ | 8,502,000 | $ | 13,204,000 | $ | (4,702,000 | ) | $ | 13,204,000 | $ | 12,963,000 | $ | 241,000 | |||||||||||
Government contract revenue
|
4,640,000 | 14,496,000 | (9,856,000 | ) | 14,496,000 | 5,013,000 | 9,483,000 | |||||||||||||||||
License revenue
|
350,000 | 243,000 | 107,000 | 243,000 | 175,000 | 68,000 | ||||||||||||||||||
Total revenues
|
13,492,000 | 27,943,000 | (14,451,000 | ) | 27,943,000 | 18,151,000 | 9,792,000 | |||||||||||||||||
COST AND EXPENSES:
|
||||||||||||||||||||||||
Cost of contract manufacturing
|
7,296,000 | 8,716,000 | (1,420,000 | ) | 8,716,000 | 9,064,000 | (348,000 | ) | ||||||||||||||||
Research and development
|
29,462,000 | 24,658,000 | 4,804,000 | 24,658,000 | 18,424,000 | 6,234,000 | ||||||||||||||||||
Selling, general and administrative
|
11,421,000 | 8,182,000 | 3,239,000 | 8,182,000 | 6,979,000 | 1,203,000 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total cost and expenses
|
48,179,000 | 41,556,000 | 6,623,000 | 41,556,000 | 34,467,000 | 7,089,000 | ||||||||||||||||||
LOSS FROM OPERATIONS
|
(34,687,000 | ) | (13,613,000 | ) | (21,074,000 | ) | (13,613,000 | ) | (16,316,000 | ) | 2,703,000 | |||||||||||||
OTHER INCOME (EXPENSE):
|
||||||||||||||||||||||||
Interest and other income
|
1,052,000 | 116,000 | 936,000 | 116,000 | 200,000 | (84,000 | ) | |||||||||||||||||
Interest and other expense
|
(516,000 | ) | (997,000 | ) | 481,000 | (997,000 | ) | (408,000 | ) | (589,000 | ) | |||||||||||||
NET LOSS
|
$ | (34,151,000 | ) | $ | (14,494,000 | ) | $ | (19,657,000 | ) | $ | (14,494,000 | ) | $ | (16,524,000 | ) | $ | 2,030,000 |
R&D Expenses –
Fiscal Year Ended April 30,
|
||||||||||||
2011
|
2010
|
$ Change
|
||||||||||
Technology Platform:
|
||||||||||||
Phosphatidylserine (“PS”) -Targeting
(bavituximab)
|
$ | 26,066,000 | $ | 20,866,000 | $ | 5,200,000 | ||||||
TNT (Cotara)
|
3,328,000 | 3,246,000 | 82,000 | |||||||||
Other
|
68,000 | 546,000 | (478,000 | ) | ||||||||
Total R&D Expenses
|
$ | 29,462,000 | $ | 24,658,000 | $ | 4,804,000 |
o
|
PS-Targeting Technology Platform (bavituximab)
– The increase in PS-targeting program expenses of $5,200,000 during the year ended April 30, 2011 compared to the prior year was primarily due to increases in clinical trial and related expenses, payroll and related expenses, share-based compensation expense (non-cash), and consulting fees to support the advancement of our later-stage clinical program for bavituximab. During the current fiscal year, we initiated three separate randomized multi-center Phase II clinical trials using bavituximab in combination with chemotherapy for the treatment of patients with i) front-line non-small cell lung cancer (“NSCLC”), ii) second-line NSCLC, and iii) pancreatic cancer. We also initiated a randomized Phase II clinical trial using bavituximab for the treatment of patients with previously untreated genotype-1 hepatitis C virus (HCV) infection. In addition to our Company sponsored later-stage Phase II clinical trials, we also established an investigator-sponsored trial program during the current fiscal year that resulted in three new studies using bavituximab for the treatment of patients with liver cancer, HER-2 negative metastatic breast cancer, and locally advanced or metastatic NSCLC. These PS-targeting clinical program expenses were further supplemented by increases in R&D expenses associated with the development of additional PS-targeting antibodies. These increases in PS-targeting program expenses were offset with a decrease in R&D expenses directly related to our government contract with the TMT, which expired on April 15, 2011, as the level of R&D activities performed under the government contract had decreased compared to the prior year in accordance with the project plan under the contract.
|
o
|
Tumor Necrosis Therapy (“TNT”) Technology Platform (Cotara)
– TNT program expenses for the year ended April 30, 2011 remained in line with the prior year and increased slightly by $82,000 as we continued our efforts to advance our Cotara clinical program, including the completion of a Phase II trial using Cotara for the treatment of recurrent glioblastoma multiforme (or brain cancer).
|
o
|
Other R&D programs
– The decrease in our other R&D program expenses of $478,000 during the year ended April 30, 2011 compared to the prior year was primarily due to our efforts to curtail spending on earlier-stage technologies associated with our anti-angiogenesis agents and vascular targeting agents in order to focus our efforts and resources on our current later-stage clinical programs. However, we are actively seeking partners to further develop these technologies.
|
R&D Expenses –
Fiscal Year Ended April 30,
|
||||||||||||
2010
|
2009
|
$ Change
|
||||||||||
Technology Platform:
|
||||||||||||
Phosphatidylserine (“PS”) -Targeting
(bavituximab)
|
$ | 20,866,000 | $ | 13,779,000 | $ | 7,087,000 | ||||||
TNT (Cotara)
|
3,246,000 | 4,351,000 | (1,105,000 | ) | ||||||||
Other
|
546,000 | 294,000 | 252,000 | |||||||||
Total R&D Expenses
|
$ | 24,658,000 | $ | 18,424,000 | $ | 6,234,000 |
o
|
PS-Targeting Technology Platform (bavituximab)
– The increase in PS-targeting program expenses of $7,087,000 during the year ended April 30, 2010 compared to fiscal year 2009 was primarily due to an increase in R&D expenses directly associated with our efforts to advance the development of bavituximab and a fully human antibody as potential broad-spectrum treatments for viral hemorrhagic fever infections under our government contract with the TMT as pre-clinical and manufacturing activities performed under the contract have increased compared to the prior year. The increase in PS-targeting program expenses was further supplemented with an increase in clinical trial and related expenses to support the advancement of our bavituximab clinical program. During fiscal year 2010, we completed patient enrollment in one Phase I and three Phase II single-arm clinical studies using bavituximab for the treatment of solid tumors. In addition, based on positive signs of activity from these Phase II single-arm clinical studies, we began to incur expenses during fiscal year 2010 associated with larger multi-center Phase IIb randomized trials that were initiated in fiscal year 2011. This initial ground work included the submission of two separate Phase IIb clinical protocols using bavituximab in combination with chemotherapy for the treatment of patients with front-line and second-line NSCLC.
|
o
|
Tumor Necrosis Therapy (“TNT”) Technology Platform (Cotara)
– The decrease in TNT program expenses of $1,105,000 during the year ended April 30, 2010 compared to fiscal year 2009 was primarily due to a decrease in clinical trial expenses associated with the timing of patient enrollment in our two Cotara clinical trials for the treatment of brain cancer, one of which completed patient enrollment during December 2009. The decrease in TNT program expenses was further supplemented by a decrease in our in-house TNT development efforts as our in-house development efforts were focused primarily on our PS-targeting program.
|
o
|
Other R&D programs
– The increase in our other R&D program expenses of $252,000 during the year ended April 30, 2010 compared to fiscal year 2009 was primarily due to an increase in R&D expenses associated with increased development efforts associated with the advancement of our anti-angiogenesis agent, r84 antibody, that was subsequently licensed to a unaffiliated entity in July 2009.
|
·
|
the uncertainty of future clinical trial results;
|
·
|
the uncertainty of the ultimate number of patients to be treated in any current or future clinical trial;
|
·
|
the uncertainty of the U.S. Food and Drug Administration allowing our studies to move forward from Phase II clinical studies to Phase III clinical studies;
|
·
|
the uncertainty of the rate at which patients are enrolled into any current or future study. Any delays in clinical trials could significantly increase the cost of the study and would extend the estimated completion dates;
|
·
|
the uncertainty of terms related to potential future partnering or licensing arrangements;
|
·
|
the uncertainty of protocol changes and modifications in the design of our clinical trial studies, which may increase or decrease our future costs; and
|
·
|
the uncertainty of our ability to raise additional capital to support our future research and development efforts beyond the second quarter of our fiscal year 2012.
|
·
|
Level 1 – 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 value 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.
|
Year Ended April 30,
|
||||||||
2011
|
2010
|
|||||||
Net loss, as reported
|
$ | (34,151,000 | ) | $ | (14,494,000 | ) | ||
Less non-cash operating expenses: | ||||||||
Depreciation and amortization | 652,000 | 447,000 | ||||||
Share-based compensation | 2,837,000 | 1,421,000 | ||||||
Amortization of expenses paid in shares of common stock | 956,000 | 239,000 | ||||||
Amortization of discount on notes payable and debt issuance costs | 235,000 | 430,000 | ||||||
Common stock issued for services | 40,000 | - | ||||||
Loss on disposal of property | - | 49,000 | ||||||
Net cash used in operating activities before changes in operating assets and liabilities
|
$ | (29,431,000 | ) | $ | (11,908,000 | ) | ||
Net change in operating assets and liabilities
|
$ | 2,969,000 | $ | (2,053,000 | ) | |||
Net cash used in operating activities
|
$ | (26,462,000 | ) | $ | (13,961,000 | ) |
Payments Due by Period
|
||||||||||||||||||||
Total
|
< 1 year
|
2-3 years
|
4-5 years
|
After 5 years
|
||||||||||||||||
Operating leases, net (1)
|
$ | 6,951,000 | $ | 1,016,000 | $ | 2,052,000 | $ | 2,085,000 | $ | 1,798,000 | ||||||||||
Note payable obligation (2)
|
1,544,000 | 1,544,000 | - | - | - | |||||||||||||||
Capital lease obligation (3)
|
211,000 | 82,000 | 116,000 | 13,000 | - | |||||||||||||||
Other long-term liabilities - minimum license obligations (4)
|
25,000 | 25,000 | - | - | - | |||||||||||||||
Total contractual obligations
|
$ | 8,731,000 | $ | 2,667,000 | $ | 2,168,000 | $ | 2,098,000 | $ | 1,798,000 |
(1)
|
Represents our (i) facility operating leases in Tustin, California under two separate non-cancelable lease agreements, (ii) facility operating lease in Houston, Texas, which has a three year lease term and expires in April 2016, and (iii) various office equipment leases, which generally have three to five year lease terms.
|
(2)
|
Amounts represent anticipated principal and interest payments on our security and loan agreement and a final payment fee of $150,000, which is due and payable on the maturity date pursuant to the loan agreement. Under the security and loan agreement, the outstanding principal balance each month will bear interest at a monthly variable rate equal to the then current thirty (30) day LIBOR rate (set at a floor of 3%) plus 9%. Anticipated interest payments were calculated using an interest rate of 12% (representing a LIBOR floor rate of 3% plus 9%). As of April 30, 2011, the thirty (30) day LIBOR rate was less than the minimum 3% floor.
|
(3)
|
Represents capital lease agreements to finance certain equipment. Amounts include principal and interest.
|
(4)
|
Represents licensing agreements we periodically enter into with third parties to obtain exclusive or non-exclusive licenses for certain technologies. The terms of certain of these agreements require us to pay future milestone payments based on product development success. We anticipate milestone payments not to exceed $25,000 during fiscal year 2012 under our existing licensing agreements. In addition, milestone payments beyond fiscal year 2012 cannot be predicted due to the uncertainty of future clinical trial results and development milestones and therefore, cannot be reasonably predicted or estimated at the present time, including potential obligations in the amount of $6,400,000 that would become due and payable upon the first commercial approval of a drug candidate developed under our PS-targeting program, including bavituximab.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
·
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.
|
By:
|
/s/
Steven W. King
|
By:
|
/s/
Paul J. Lytle
|
|||||
Steven W. King,
|
Paul J. Lytle
|
|||||||
President & Chief Executive Officer, and Director
|
Chief Financial Officer
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
Consolidated Balance Sheets as of April 30, 2011 and 2010
|
F-2
|
Consolidated Statements of Operations for each of the three years in the period ended April 30, 2011
|
F-4
|
Consolidated Statements of Stockholders' Equity for each of the three years in the period ended April 30, 2011
|
F-5
|
Consolidated Statements of Cash Flows for each of the three years in the period ended April 30, 2011
|
F-6
|
Notes to Consolidated Financial Statements
|
F-8
|
(2)
Financial Statement Schedules
|
|
The following schedule is filed as part of this Form 10-K:
|
|
Schedule II -Valuation of Qualifying Accounts
|
|
for each of the three years in the period ended April 30, 2011
|
F-33
|
Exhibit
Number
|
Description
|
|
3.1
|
Certificate of Incorporation of Techniclone Corporation, a Delaware corporation (Incorporated by reference to Exhibit B to the Company’s 1996 Proxy Statement as filed with the Commission on or about August 20, 1996).
|
|
3.2
|
Amended and Restated Bylaws of Peregrine Pharmaceuticals, Inc. (formerly Techniclone Corporation), a Delaware corporation (
Incorporated by reference to Exhibit 3.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 2003
).
|
|
3.3
|
Certificate of Designation of 5% Adjustable Convertible Class C Preferred Stock as filed with the Delaware Secretary of State on April 23, 1997. (Incorporated by reference to Exhibit 3.1 contained in Registrant’s Current Report on Form 8-K as filed with the Commission on or about May 12, 1997).
|
|
3.4
|
Certificate of Amendment to Certificate of Incorporation of Techniclone Corporation to effect the name change to Peregrine Pharmaceuticals, Inc., a Delaware corporation. (Incorporated by reference to Exhibit 3.4 contained in Registrant’s Annual Report on Form 10-K for the year ended April 30, 2001).
|
|
3.5
|
Certificate of Amendment to Certificate of Incorporation of Peregrine Pharmaceuticals, Inc. to increase the number of authorized shares of the Company’s common stock to two hundred million shares (
Incorporated by reference to Exhibit 3.5 to Registrant's Quarterly Report on Form 10-Q for the quarter ended October 31, 2003).
|
|
3.6
|
Certificate of Amendment to Certificate of Incorporation of Peregrine Pharmaceuticals, Inc. to increase the number of authorized shares of the Company’s common stock to two hundred fifty million shares (Incorporated by reference to Exhibit 3.6 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2005).
|
|
3.7
|
Certificate of Designation of Rights, Preferences and Privileges of Series D Participating Preferred Stock of the Registrant, as filed with the Secretary of State of the State of Delaware on March 16, 2006. (Incorporated by reference to Exhibit 3.7 to Registrant’s Current Report on Form 8-K as filed with the Commission on March 17, 2006).
|
|
3.8
|
Certificate of Amendment to Certificate of Incorporation of Peregrine Pharmaceuticals, Inc. to increase the number of authorized shares of the Company’s common stock to three hundred twenty five million shares (Incorporated by reference to Exhibit 3.8 to Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2007).
|
|
3.9
|
Amended and Restated Bylaws of Peregrine Pharmaceuticals, Inc., a Delaware corporation (Incorporated by reference to Exhibit 3.9 to Registrant’s Current Report on Form 8-K as filed with the Commission on December 21, 2007).
|
|
3.10
|
Certificate of Amendment to Certificate of Incorporation of Peregrine Pharmaceuticals, in order to effect a 1-for-5 reverse stock split of the Company common stock effective as of the close of business on October 16, 2009 (Incorporated by reference to Exhibit 3.10 to Registrant’s Current Report on Form 8-K as filed with the Commission on October 19, 2009).
|
|
4.0
|
Form of Certificate for Common Stock (Incorporated by reference to the exhibit of the same number contained in Registrant’s Annual Report on Form 10-K for the year end April 30, 1988).
|
|
4.1
|
Form of Non-qualified Stock Option Agreement by and between Registrant, Director and certain consultants dated December 22, 1999 (Incorporated by reference to the exhibit contained in Registrant’s Registration Statement on Form S-3 (File No. 333-40716)).*
|
Exhibit
Number
|
Description | |
4.2
|
Peregrine Pharmaceuticals, Inc., 2002 Non-Qualified Stock Option Plan (Incorporated by reference to the exhibit contained in Registrant’s Registration Statement in Form S-8
(File No. 333-106385)).*
|
|
4.3
|
Form of 2002 Non-Qualified Stock Option Agreement (Incorporated by reference to the exhibit contained in Registrant’s Registration Statement in Form S-8 (File No. 333-106385)).*
|
|
4.4
|
Preferred Stock Rights Agreement, dated as of March 16, 2006, between the Company and Integrity Stock Transfer, Inc., including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B and C, respectively (Incorporated by reference to Exhibit 4.19 to Registrant’s Current Report on Form 8-K as filed with the Commission on March 17, 2006).
|
|
4.5
|
1996 Stock Incentive Plan (Incorporated by reference to the exhibit contained in Registrant's Registration Statement in form S-8 (File No. 333-17513)).*
|
|
4.6
|
Stock Exchange Agreement dated as of January 15, 1997, among the stockholders of Peregrine Pharmaceuticals, Inc., and Registrant (Incorporated by reference to Exhibit 2.1 to Registrant's Quarterly Report on Form 10-Q for the quarter ended January 31, 1997).
|
|
4.7
|
First Amendment to Stock Exchange Agreement among the Stockholders of Peregrine Pharmaceuticals, Inc., and Registrant (Incorporated by reference to Exhibit 2.1 contained in Registrant’s Current Report on Form 8-K as filed with the Commission on or about May 12, 1997).
|
|
4.8
|
2003 Stock Incentive Plan Non-qualified Stock Option Agreement (Incorporated by reference to the exhibit contained in Registrant’s Registration Statement in form S-8 (File No. 333-121334).*
|
|
4.9
|
2003 Stock Incentive Plan Incentive Stock Option Agreement (Incorporated by reference to the exhibit contained in Registrant’s Registration Statement in form S-8 (File No. 333-121334)).*
|
|
4.10
|
Form of Incentive Stock Option Agreement for 2005 Stock Incentive Plan (Incorporated by reference to Exhibit 10.98 to Registrant’s Current Report on Form 8-K as filed with the Commission on October 28, 2005).*
|
|
4.11
|
Form of Non-Qualified Stock Option Agreement for 2005 Stock Incentive Plan (Incorporated by reference to Exhibit 10.99 to Registrant’s Current Report on Form 8-K as filed with the Commission on October 28, 2005).*
|
|
4.12
|
Peregrine Pharmaceuticals, Inc. 2005 Stock Incentive Plan (Incorporated by reference to Exhibit B to Registrant’s Definitive Proxy Statement filed with the Commission on August 29, 2005).*
|
|
4.13
|
Form of Incentive Stock Option Agreement for 2009 Stock Incentive Plan (Incorporated by reference to Exhibit 4.14 to Registrant’s Current Report on Form 8-K as filed with the Commission on October 27, 2009).*
|
|
4.14
|
Form of Non-Qualified Stock Option Agreement for 2009 Stock Incentive Plan (Incorporated by reference to Exhibit 4.15 to Registrant’s Current Report on Form 8-K as filed with the Commission on October 27, 2009).*
|
|
4.15
|
Form of Restricted Stock Issuance Agreement dated February 1, 2010 (Re-filed herewith in unredacted form following expiration of confidential treatment request).
(*)(***)
|
|
4.16
|
2010 Stock Incentive Plan (Incorporated by reference to Exhibit A to Registrant’s Definitive Proxy Statement filed with the Commission on August 27, 2010). *
|
|
4.17
|
Form of Stock Option Award Agreement under 2010 Stock Incentive Plan (Incorporated by reference to Exhibit 4.17 to Registrant’s Registration Statement in Form S-8 (File No. 333-171067)). *
|
|
4.18
|
2010 Employee Stock Purchase Plan (Incorporated by reference to Exhibit B to Registrant’s Definitive Proxy Statement filed with the Commission on August 27, 2010). *
|
Exhibit
Number
|
Description
|
|
10.1
|
Placement Agent Agreement dated June 27, 2007, between Registrant and Rodman & Renshaw, LLC (Incorporated by reference to Exhibit 1.1 to Registrant’s Current Report on Form 8-K as filed with the Commission on June 28, 2007).
|
|
10.2
|
Form of Securities Purchase Agreement dated June 28, 2007 (Incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K as filed with the Commission on June 28, 2007).
|
|
10.3
|
Government contract by and between Peregrine Pharmaceuticals, Inc. and the Defense Threat Reduction Agency dated June 30, 2008 (
Incorporated by reference to Exhibit 10.110 to Registrant’s Current Report on Form 10-Q as filed with the Commission on September 9, 2008).
|
|
10.4
|
Loan and Security Agreement dated December 9, 2008, between Registrant and BlueCrest Capital Finance, L.P. (
Incorporated by reference to Exhibit 10.111 to Registrant’s Current Report on Form 10-Q as filed with the Commission on March 12, 2009).**
|
|
10.5
|
Secured Term Promissory Note dated December 19, 2008 between Registrant and BlueCrest Capital Finance, L.P. (
Incorporated by reference to Exhibit 10.112 to Registrant’s Current Report on Form 10-Q as filed with the Commission on March 12, 2009).
|
|
10.6
|
Secured Term Promissory Note dated December 19, 2008 between Registrant and MidCap Funding I, LLC. (
Incorporated by reference to Exhibit 10.113 to Registrant’s Current Report on Form 10-Q as filed with the Commission on March 12, 2009)
|
|
10.7
|
Intellectual Property Security Agreement dated December 19, 2008 between Avid Bioservices, Inc. and MidCap Funding I, LLC. (
Incorporated by reference to Exhibit 10.114 to Registrant’s Current Report on Form 10-Q as filed with the Commission on March 12, 2009).
|
|
10.8
|
Intellectual Property Security Agreement dated December 19, 2008, between Registrant and MidCap Funding I, LLC. (
Incorporated by reference to Exhibit 10.115 to Registrant’s Current Report on Form 10-Q as filed with the Commission on March 12, 2009).
|
|
10.9
|
Warrant to purchase 507,614 shares of Common Stock of Registrant issued to BlueCrest Capital Finance, L.P. dated December 9, 2008. (
Incorporated by reference to Exhibit 10.116 to Registrant’s Current Report on Form 10-Q as filed with the Commission on March 12, 2009).
|
|
10.10
|
Warrant to purchase 1,184,433 shares of Common Stock of Registrant issued to MidCap Funding I, LLC dated December 9, 2008. (
Incorporated by reference to Exhibit 10.117 to Registrant’s Current Report on Form 10-Q as filed with the Commission on March 12, 2009).
|
|
10.11
|
At Market Issuance Sales Agreement, dated March 26, 2009, by and between Peregrine Pharmaceuticals, Inc., and Wm. Smith & Co. (
Incorporated by reference to Exhibit 10.118 to Registrant’s Current Report on Form 8-K as filed with the Commission on March 27, 2009).
|
|
10.12
|
Employment Agreement by and between
Peregrine Pharmaceuticals, Inc., and Steven W. King, dated March 18, 2009 (
Incorporated by reference to Exhibit 10.12 to Registrant’s Current Report on Form 10-K as filed with the Commission on July 14, 2009)
.*
|
|
10.13
|
Employment Agreement by and between
Peregrine Pharmaceuticals, Inc., and Paul J. Lytle, dated March 18, 2009 (
Incorporated by reference to Exhibit 10.13 to Registrant’s Current Report on Form 10-K as filed with the Commission on July 14, 2009)
.*
|
|
10.14
|
Employment Agreement by and between
Peregrine Pharmaceuticals, Inc., and Joseph Shan, dated March 18, 2009 (
Incorporated by reference to Exhibit 10.14 to Registrant’s Current Report on Form 10-K as filed with the Commission on July 14, 2009)
.*
|
|
10.15
|
Employment Agreement by and between
Peregrine Pharmaceuticals, Inc., and Shelley P.M. Fussey, Ph.D., dated March 18, 2009
(
Incorporated by reference to Exhibit 10.15 to Registrant’s Current Report on Form 10-K as filed with the Commission on July 14, 2009)
.*
|
Exhibit
Number
|
Description
|
|
10.16
|
At Market Issuance Sales Agreement, dated July 14, 2009, by and between Peregrine Pharmaceuticals, Inc., and Wm. Smith & Co. (
Incorporated by reference to Exhibit 10.16 to Registrant’s Current Report on Form 8-K as filed with the Commission on July 14, 2009).
|
|
10.17
|
Exclusive Patent License Agreement between The University of Texas System and Peregrine Pharmaceuticals, Inc., effective as of August 18, 2005 (
Incorporated by reference to Exhibit 10.17 to Registrant’s Current Report on Form 8-K as filed with the Commission on April 14, 2010). **
|
|
10.18
|
Amendment No. 1 to Exclusive Patent License Agreement between The University of Texas System and Peregrine Pharmaceuticals, Inc., dated June 1, 2009 (
Incorporated by reference to Exhibit 10.18 to Registrant’s Current Report on Form 8-K as filed with the Commission on April 14, 2010). **
|
|
10.19
|
Exclusive Patent License Agreement between The University of Texas System and Peregrine Pharmaceuticals, Inc., effective as of August 1, 2001 (
Incorporated by reference to Exhibit 10.19 to Registrant’s Current Report on Form 8-K as filed with the Commission on April 14, 2010). **
|
|
10.20
|
Amendment No. 1 to Exclusive Patent License agreement between The University of Texas System and Peregrine Pharmaceuticals, Inc., dated June 1, 2009 (
Incorporated by reference to Exhibit 10.20 to Registrant’s Current Report on Form 8-K as filed with the Commission on April 14, 2010). **
|
|
10.21
|
Non-Exclusive Cabilly Patent License Agreement between Genentech, Inc., and Peregrine Pharmaceuticals, Inc., effective as of November 5, 2003 (
Incorporated by reference to Exhibit 10.21 to Registrant’s Current Report on Form 8-K as filed with the Commission on April 14, 2010). **
|
|
10.22
|
Commercial License Agreement between Avanir Pharmaceuticals, Inc., and Peregrine Pharmaceuticals, Inc., dated December 1, 2003 (
Incorporated by reference to Exhibit 10.22 to Registrant’s Current Report on Form 8-K as filed with the Commission on
April 14, 2010). **
|
|
10.23
|
License Agreement between Lonza Biologics PLC and Peregrine Pharmaceuticals, Inc., dated July 1, 1998 (
Incorporated by reference to Exhibit 10.23 to Registrant’s Current Report on Form 8-K as filed with the Commission on April 14, 2010). **
|
|
10.24
|
License Agreement between Lonza Biologics PLC and Peregrine Pharmaceuticals, Inc., dated March 1, 2005 (
Incorporated by reference to Exhibit 10.24 to Registrant’s Current Report on Form 8-K as filed with the Commission on April 14, 2010). **
|
|
10.25
|
At Market Issuance Sales Agreement, dated June 22, 2010, by and between Peregrine Pharmaceuticals, Inc., and McNicoll, Lewis & Vlak LLC (Incorporated by reference to Exhibit 10.25 to Registrant’s Current Report on Form 8-K as filed with the Commission on June 22, 2010).
|
|
10.26
|
License Agreement between Stason Pharmaceuticals, Inc. and Peregrine Pharmaceuticals, Inc., dated May 3, 2010 (Incorporated by reference to Exhibit 10.26 to Registrant’s Current Report on Form 10-Q as filed with the Commission on September 9, 2010). **
|
|
10.27
|
Assignment Agreement between Stason Pharmaceuticals, Inc. and Peregrine Pharmaceuticals, Inc., dated May 3, 2010 (Incorporated by reference to Exhibit 10.27 to Registrant’s Current Report on Form 10-Q as filed with the Commission on September 9, 2010). **
|
|
10.28
|
At Market Issuance Sales Agreement, dated December 29, 2010, by and between Peregrine Pharmaceuticals, Inc., and McNicoll, Lewis & Vlak LLC (Incorporated by reference to Exhibit 10.28 to Registrant’s Current Report on Form 8-K as filed with the Commission on December 29, 2010).
|
PEREGRINE PHARMACEUTICALS, INC. | |||
Dated: July 14, 2011
|
By:
|
/s/ STEVEN W. KING | |
Steven W. King | |||
President & Chief Executive Officer, and Director | |||
Signature
|
Capacity
|
Date
|
||
/s/ Steven W. King
Steven W. King
|
President & Chief Executive Officer
(Principal Executive Officer), and Director
|
July 14, 2011
|
||
/s/ Paul J. Lytle
Paul J. Lytle
|
Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
|
July 14, 2011
|
||
|
||||
/s/ Carlton M. Johnson
|
Director
|
July 14, 2011
|
||
Carlton M. Johnson
|
||||
/s/ David H. Pohl
|
Director | July 14, 2011 | ||
David H. Pohl | ||||
/s/ Eric S. Swartz
|
Director | July 14, 2011 | ||
Eric S. Swartz | ||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$ | 23,075,000 | $ | 19,681,000 | ||||
Trade and other receivables, net
|
1,389,000 | 1,481,000 | ||||||
Government contract receivables
|
93,000 | 367,000 | ||||||
Inventories, net
|
5,284,000 | 3,123,000 | ||||||
Debt issuance costs, current portion
|
21,000 | 122,000 | ||||||
Prepaid expenses and other current assets, net
|
953,000 | 2,004,000 | ||||||
Total current assets
|
30,815,000 | 26,778,000 | ||||||
PROPERTY:
|
||||||||
Leasehold improvements
|
932,000 | 697,000 | ||||||
Laboratory equipment
|
4,391,000 | 4,221,000 | ||||||
Furniture, fixtures, office equipment and software
|
1,814,000 | 917,000 | ||||||
7,137,000 | 5,835,000 | |||||||
Less accumulated depreciation and amortization
|
(4,928,000 | ) | (4,366,000 | ) | ||||
Property, net
|
2,209,000 | 1,469,000 | ||||||
Debt issuance costs, less current portion
|
- | 21,000 | ||||||
Other assets
|
1,742,000 | 1,067,000 | ||||||
TOTAL ASSETS
|
$ | 34,766,000 | $ | 29,335,000 |
2011
|
2010
|
|||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
$ | 4,046,000 | $ | 3,434,000 | ||||
Accrued clinical trial and related fees
|
2,292,000 | 1,308,000 | ||||||
Accrued payroll and related costs
|
1,455,000 | 1,623,000 | ||||||
Notes payable, current portion and net of discount
|
1,321,000 | 1,893,000 | ||||||
Deferred revenue, current portion
|
5,617,000 | 2,406,000 | ||||||
Deferred government contract revenue
|
- | 78,000 | ||||||
Customer deposits
|
1,759,000 | 2,618,000 | ||||||
Other current liabilities
|
1,189,000 | 685,000 | ||||||
Total current liabilities
|
17,679,000 | 14,045,000 | ||||||
Notes payable, less current portion and net of discount
|
- | 1,315,000 | ||||||
Deferred revenue, less current portion
|
632,000 | - | ||||||
Other long-term liabilities
|
1,037,000 | 568,000 | ||||||
Commitments and contingencies
|
||||||||
STOCKHOLDERS' EQUITY:
|
||||||||
Preferred stock - $.001 par value; authorized 5,000,000 shares; non-voting; none issued
|
- | - | ||||||
Common stock - $.001 par value; authorized 325,000,000 shares; outstanding - 69,837,142 and 53,094,896, respectively
|
70,000 | 53,000 | ||||||
Additional paid-in-capital
|
311,353,000 | 275,208,000 | ||||||
Accumulated deficit
|
(296,005,000 | ) | (261,854,000 | ) | ||||
Total stockholders' equity
|
15,418,000 | 13,407,000 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 34,766,000 | $ | 29,335,000 |
2011
|
2010
|
2009
|
||||||||||
REVENUES:
|
||||||||||||
Contract manufacturing revenue
|
$ | 8,502,000 | $ | 13,204,000 | $ | 12,963,000 | ||||||
Government contract revenue
|
4,640,000 | 14,496,000 | 5,013,000 | |||||||||
License revenue
|
350,000 | 243,000 | 175,000 | |||||||||
Total revenues
|
13,492,000 | 27,943,000 | 18,151,000 | |||||||||
COSTS AND EXPENSES:
|
||||||||||||
Cost of contract manufacturing
|
7,296,000 | 8,716,000 | 9,064,000 | |||||||||
Research and development
|
29,462,000 | 24,658,000 | 18,424,000 | |||||||||
Selling, general and administrative
|
11,421,000 | 8,182,000 | 6,979,000 | |||||||||
Total costs and expenses
|
48,179,000 | 41,556,000 | 34,467,000 | |||||||||
LOSS FROM OPERATIONS
|
(34,687,000 | ) | (13,613,000 | ) | (16,316,000 | ) | ||||||
OTHER INCOME (EXPENSE):
|
||||||||||||
Interest and other income
|
1,052,000 | 116,000 | 200,000 | |||||||||
Interest and other expense
|
(516,000 | ) | (997,000 | ) | (408,000 | ) | ||||||
NET LOSS
|
$ | (34,151,000 | ) | $ | (14,494,000 | ) | $ | (16,524,000 | ) | |||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
60,886,392 | 49,065,322 | 45,246,293 | |||||||||
BASIC AND DILUTED LOSS PER COMMON SHARE
|
$ | (0.56 | ) | $ | (0.30 | ) | $ | (0.37 | ) |
Additional
|
Total
|
|||||||||||||||||||
Common Stock
|
Paid-In
|
Accumulated
|
Stockholders’
|
|||||||||||||||||
Shares
|
Amount
|
Captital
|
Deficit
|
Equity
|
||||||||||||||||
BALANCES, April 30, 2008
|
45,242,124 | $ | 46,000 | $ | 246,385,000 | $ | (230,836,000 | ) | $ | 15,595,000 | ||||||||||
Common stock issued for cash under March 26,
2009 Financing, net of issuance costs of
$58,000
|
295,587 | - | 550,000 | - | 550,000 | |||||||||||||||
Fair market value of warrants issued with notes
payable
|
- | - | 414,000 | - | 414,000 | |||||||||||||||
Share-based compensation
|
- | - | 866,000 | - | 866,000 | |||||||||||||||
Net loss
|
- | - | - | (16,524,000 | ) | (16,524,000 | ) | |||||||||||||
BALANCES, April 30, 2009
|
45,537,711 | 46,000 | 248,215,000 | (247,360,000 | ) | 901,000 | ||||||||||||||
Common stock issued for cash under March 26,
2009 Financing, net of issuance costs of
$305,000
|
1,855,172 | 2,000 | 6,585,000 | - | 6,587,000 | |||||||||||||||
Common stock issued for cash under July 14, 2009 Financing, net of issuance costs of $545,000
|
5,643,749 | 5,000 | 18,882,000 | - | 18,887,000 | |||||||||||||||
Common stock issued upon exercise of options
|
57,253 | - | 105,000 | - | 105,000 | |||||||||||||||
Fractional shares issued pursuant to reverse stock
split
|
1,011 | - | - | - | - | |||||||||||||||
Share-based compensation
|
- | - | 1,421,000 | - | 1,421,000 | |||||||||||||||
Net loss
|
- | - | - | (14,494,000 | ) | (14,494,000 | ) | |||||||||||||
BALANCES, April 30, 2010
|
53,094,896 | 53,000 | 275,208,000 | (261,854,000 | ) | 13,407,000 | ||||||||||||||
Common stock issued for cash under July 14, 2009 Financing, net of issuance costs of $133,000
|
1,925,565 | 2,000 | 5,434,000 | - | 5,436,000 | |||||||||||||||
Common stock issued for cash under June 22, 2010 Financing, net of issuance costs of $345,000
|
9,214,373 | 9,000 | 14,645,000 | - | 14,654,000 | |||||||||||||||
Common stock issued for cash under December 29, 2010 Financing, net of issuance costs of $291,000
|
5,224,491 | 6,000 | 12,991,000 | - | 12,997,000 | |||||||||||||||
Common stock issued upon exercise of options
|
20,750 | - | 44,000 | - | 44,000 | |||||||||||||||
Common stock issued upon exercise of warrants
|
74,802 | - | - | - | - | |||||||||||||||
Common stock issued for services
|
28,921 | - | 60,000 | - | 60,000 | |||||||||||||||
Common stock issued under restricted stock awards
|
148,500 | - | - | - | - | |||||||||||||||
Common stock issued under Employee Stock
Purchase Plan
|
104,844 | - | 134,000 | - | 134,000 | |||||||||||||||
Share-based compensation
|
- | - | 2,837,000 | - | 2,837,000 | |||||||||||||||
Net loss
|
- | - | - | (34,151,000 | ) | (34,151,000 | ) | |||||||||||||
BALANCES, April 30, 2011
|
69,837,142 | $ | 70,000 | $ | 311,353,000 | $ | (296,005,000 | ) | $ | 15,418,000 |
2011
|
2010
|
2009
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
$ | (34,151,000 | ) | $ | (14,494,000 | ) | $ | (16,524,000 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation and amortization
|
652,000 | 447,000 | 503,000 | |||||||||
Share-based compensation
|
2,837,000 | 1,421,000 | 866,000 | |||||||||
Amortization of expenses paid in shares of common stock
|
956,000 | 239,000 | 255,000 | |||||||||
Amortization of discount on notes payable and debt issuance costs
|
235,000 | 430,000 | 185,000 | |||||||||
Common stock issued for services
|
40,000 | - | - | |||||||||
Loss on sale of property
|
- | 49,000 | - | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Trade and other receivables, net
|
92,000 | 289,000 | (1,165,000 | ) | ||||||||
Government contract receivables
|
274,000 | 1,577,000 | (1,944,000 | ) | ||||||||
Inventories, net
|
(2,161,000 | ) | 1,584,000 | (1,807,000 | ) | |||||||
Prepaid expenses and other current assets, net
|
95,000 | (777,000 | ) | (513,000 | ) | |||||||
Other non-current assets
|
(7,000 | ) | 183,000 | (52,000 | ) | |||||||
Accounts payable
|
608,000 | (484,000 | ) | 1,800,000 | ||||||||
Accrued clinical trial site and related fees
|
984,000 | 602,000 | 217,000 | |||||||||
Accrued payroll and related expenses
|
(168,000 | ) | 43,000 | 496,000 | ||||||||
Deferred revenue
|
3,843,000 | (1,370,000 | ) | 1,580,000 | ||||||||
Deferred government contract revenue
|
(78,000 | ) | (3,793,000 | ) | 3,871,000 | |||||||
Customer deposits
|
(859,000 | ) | 331,000 | 1,449,000 | ||||||||
Other accrued expenses and current liabilities
|
372,000 | (232,000 | ) | 530,000 | ||||||||
Other long-term liabilities
|
(26,000 | ) | (6,000 | ) | 171,000 | |||||||
Net cash used in operating activities
|
(26,462,000 | ) | (13,961,000 | ) | (10,082,000 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Property acquisitions
|
(912,000 | ) | (208,000 | ) | (126,000 | ) | ||||||
Proceeds from sale of property
|
- | 20,000 | - | |||||||||
(Increase) decrease in other assets
|
(435,000 | ) | (80,000 | ) | 38,000 | |||||||
Net cash used in investing activities
|
(1,347,000 | ) | (268,000 | ) | (88,000 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds from issuance of common stock, net of issuance costs of
$769,000, $850,000, and $58,000, respectively
|
33,087,000 | 25,474,000 | 550,000 | |||||||||
Proceeds from issuance of notes payable, net of issuance costs of
$469,000
|
- | - | 4,531,000 | |||||||||
Proceeds from exercise of stock options
|
44,000 | 105,000 | - | |||||||||
Proceeds from issuance of common stock under the Employee Stock
Purchase Plan
|
134,000 | - | - | |||||||||
Principal payments on notes payable
|
(2,000,000 | ) | (1,667,000 | ) | - | |||||||
Principal payments on capital leases
|
(62,000 | ) | (20,000 | ) | (23,000 | ) | ||||||
Net cash provided by financing activities
|
31,203,000 | 23,892,000 | 5,058,000 |
2011
|
2010
|
|||||||
Raw materials, net
|
$ | 1,512,000 | $ | 1,243,000 | ||||
Work-in-process
|
3,772,000 | 1,880,000 | ||||||
Total inventories, net
|
$ | 5,284,000 | $ | 3,123,000 |
·
|
Level 1 – 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 value 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.
|
2011
|
2010
|
2009
|
||||||||||
Stock options and awards
|
85,361 | 435,686 | 22,059 | |||||||||
Warrants
|
68,991 | 190,042 | 24,829 | |||||||||
Total
|
154,352 | 625,728 | 46,888 |
2011
|
2010
|
|||||||
Furniture, fixtures, office equipment
and software
|
$ | 258,000 | $ | 78,000 | ||||
Less accumulated depreciation
|
(45,000 | ) | (5,000 | ) | ||||
Net book value
|
$ | 213,000 | $ | 73,000 |
Year ending April 30:
|
||||
2012
|
$ | 82,000 | ||
2013
|
82,000 | |||
2014
|
34,000 | |||
2015
|
13,000 | |||
Total minimum lease payments
|
211,000 | |||
Amount representing interest
|
(12,000 | ) | ||
Net present value minimum lease payments
|
199,000 | |||
Less current portion included in other current liabilities
|
(75,000 | ) | ||
Long-term portion included in other
long-term liabilities
|
$ | 124,000 |
Year ending April 30,:
|
Minimum
Lease
Payments
|
|||
2012
|
$ | 1,016,000 | ||
2013
|
1,021,000 | |||
2014
|
1,031,000 | |||
2015
|
1,030,000 | |||
2016
|
1,055,000 | |||
Thereafter
|
1,798,000 | |||
$ | 6,951,000 |
Licensor
|
Agreement Date
|
Total Milestone Obligations Expensed To Date
|
Potential Future Milestone Obligations
|
||||||
UTSWMC
|
August 2001
|
$ | 98,000 | $ | 375,000 | ||||
UTSWMC
|
August 2005
|
$ | 85,000 | $ | 375,000 | ||||
Lonza
|
March 2005
|
$ | 64,000 | (1 | ) | ||||
Avanir
|
December 2003
|
$ | 50,000 | $ | 1,050,000 | ||||
Genentech, Inc.
|
November 2003
|
$ | 500,000 | $ | 5,000,000 | ||||
Total
|
$ | 797,000 | $ | 6,800,000 |
(1)
|
In fiscal year 2011, we incurred a milestone fee of 37,500 pounds sterling ($64,000 U.S.) upon commencement of patient enrollment in our first randomized phase II clinical trial, which amount will continue as an annual license fee thereafter; the annual license fee increases to 75,000 pounds sterling per annum (or approximately $125,000 U.S. based on the exchange rate at April 30, 2011) upon completion of patient enrollment in our first randomized phase II clinical trial. In addition, in the event we utilize an outside contract manufacturer other than Lonza to manufacture bavituximab for commercial purposes, we would owe Lonza 300,000 pounds sterling per year (or approximately $500,000 U.S. based on the exchange rate at April 30, 2011).
|
Registration
Statement No.
|
Description of Financing Transaction
|
Number of
Common Stock
Shares Issued
|
Gross
Proceeds
|
||||||||
Fiscal Year 2009
|
|||||||||||
333-139975 |
At Market Sales Issuance Agreement dated March 26, 2009
|
295,587 | $ | 608,000 | |||||||
Fiscal Year 2010
|
|||||||||||
333-139975 |
At Market Sales Issuance Agreement dated March 26, 2009
|
1,855,172 | $ | 6,892,000 | |||||||
333-160572 |
At Market Sales Issuance Agreement dated July 14, 2009
|
5,643,749 | $ | 19,432,000 | |||||||
7,498,921 | $ | 26,324,000 | |||||||||
Fiscal Year 2011
|
|||||||||||
333-160572 |
At Market Sales Issuance Agreement dated July 14, 2009
|
1,925,565 | $ | 5,568,000 | |||||||
333-160572 |
At Market Sales Issuance Agreement dated June 22, 2010
|
9,214,373 | $ | 15,000,000 | |||||||
333-171252 |
At Market Sales Issuance Agreement dated December 29, 2010
|
5,224,491 | $ | 13,288,000 | |||||||
16,364,429 | $ | 33,856,000 |
Number of Shares
Reserved
|
||||
Common shares reserved for issuance under outstanding option and restricted stock award
grants and available for issuance under our stock incentive plans
|
8,931,578 | |||
Common shares reserved for and available for issuance under our Employee Stock Purchase Plan
|
4,895,156 | |||
Common shares issuable upon exercise of outstanding warrants
|
219,967 | |||
Total shares of common stock reserved for issuance
|
14,046,701 |
Year Ended April 30,
|
|||||
2011
|
2010
|
2009
|
|||
Risk-free interest rate
|
2.09%
|
2.69%
|
3.10%
|
||
Expected life (in years)
|
6.00
|
6.00
|
6.00
|
||
Expected volatility
|
73.42%
|
73.30%
|
78.64%
|
||
Expected dividend yield
|
-
|
-
|
-
|
Stock Options
|
Shares
|
Weighted
Average
Exercisable
Price
|
Weighted
Average
Remaining
Contractual
Term (years)
|
Aggregate
Intrinsic
Value
|
||||||||||||
Outstanding, May 1, 2010
|
5,013,690 | $ 4.49 | ||||||||||||||
Granted
|
435,109 | $ 1.99 | ||||||||||||||
Exercised
|
(20,750 | ) | $ 2.13 | |||||||||||||
Canceled or expired
|
(558,450 | ) | $ 5.51 | |||||||||||||
Outstanding, April 30, 2011
|
4,869,599 | $ 4.16 | 6.87 | $ 484,000 | ||||||||||||
Exercisable and expected to vest
|
4,818,819 | $ 4.18 | 6.85 | $ 468,000 | ||||||||||||
Exercisable, April 30, 2011
|
3,030,022 | $ 4.99 | 5.81 | $ 246,000 |
Restricted Stock
|
Shares
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Unvested, May 1, 2010
|
371,250 | $ 2.97 | ||||||
Granted
|
74,250 | $ 2.37 | ||||||
Vested
|
(148,500 | ) | $ 2.67 | |||||
Forfeited
|
(228,750 | ) | $ 2.97 | |||||
Unvested, April 30, 2011
|
68,250 | $ 2.98 | ||||||
Risk-free interest rate
|
0.15%
|
Expected life (in years)
|
0.50
|
Expected volatility
|
82.72%
|
Expected dividend yield
|
-
|
2011
|
2010
|
2009
|
||||||||||
Cost of contract manufacturing
|
$ | 8,000 | $ | - | $ | - | ||||||
Research and development
|
1,134,000 | 784,000 | 484,000 | |||||||||
Selling, general and administrative
|
1,695,000 | 637,000 | 382,000 | |||||||||
Total share-based compensation expense
|
$ | 2,837,000 | $ | 1,421,000 | $ | 866,000 | ||||||
Share-based compensation from:
|
||||||||||||
Stock options
|
$ | 2,598,000 | $ | 1,202,000 | $ | 866,000 | ||||||
Restricted stock awards
|
185,000 | 219,000 | - | |||||||||
Employee stock purchase plan
|
54,000 | - | - | |||||||||
$ | 2,837,000 | $ | 1,421,000 | $ | 866,000 |
2011
|
2010
|
2009
|
||||||||||
Provision for federal income taxes at statutory rate
|
$ | (11,611,000 | ) | $ | (4,929,000 | ) | $ | (5,618,000 | ) | |||
State income taxes, net of federal benefit
|
(406,000 | ) | (799,000 | ) | (926,000 | ) | ||||||
Expiration and adjustment of loss carry forwards
|
9,174,000 | 7,448,000 | 3,917,000 | |||||||||
Change in valuation allowance
|
2,294,000 | (1,997,000 | ) | 2,405,000 | ||||||||
Other, net
|
549,000 | 277,000 | 222,000 | |||||||||
Income tax (expense) benefit
|
$ | - | $ | - | $ | - |
2011
|
2010
|
|||||||
Share-based compensation
|
$ | 2,782,000 | $ | 2,249,000 | ||||
Deferred revenue
|
2,677,000 | 989,000 | ||||||
Depreciation and amortization
|
691,000 | 683,000 | ||||||
Accrued liabilities
|
474,000 | 409,000 | ||||||
Total deferred tax assets
|
6,624,000 | 4,330,000 | ||||||
Less valuation allowance
|
(6,624,000 | ) | (4,330,000 | ) | ||||
Net deferred tax assets
|
$ | - | $ | - |
2011
|
2010
|
2009
|
||||||||||
Contract manufacturing services revenue
|
$ | 8,502,000 | $ | 13,204,000 | $ | 12,963,000 | ||||||
Cost of contract manufacturing services
|
7,296,000 | 8,716,000 | 9,064,000 | |||||||||
Gross profit
|
$ | 1,206,000 | $ | 4,488,000 | $ | 3,899,000 | ||||||
Revenue from products in research and
development
|
$ | 4,990,000 | $ | 14,739,000 | $ | 5,188,000 | ||||||
Research and development expense
|
(29,462,000 | ) | (24,658,000 | ) | (18,424,000 | ) | ||||||
Selling, general and administrative expense
|
(11,421,000 | ) | (8,182,000 | ) | (6,979,000 | ) | ||||||
Other income (expense), net
|
536,000 | (881,000 | ) | (208,000 | ) | |||||||
Net loss
|
$ | (34,151,000 | ) | $ | (14,494,000 | ) | $ | (16,524,000 | ) |
2011
|
2010
|
2009
|
||||||||||
Government contract revenue
1
(see Note 3)
|
$ | 4,640,000 | $ | 14,496,000 | $ | 5,013,000 | ||||||
License revenue (see Note 6)
|
350,000 | 243,000 | 175,000 | |||||||||
Total
|
$ | 4,990,000 | $ | 14,739,000 | $ | 5,188,000 |
(1)
|
Includes revenue associated with services provided by our contract manufacturing segment under our government contract with the TMT, of which during fiscal years 2011, 2010, and 2009 amounted to $366,000, $6,978,000, and $1,642,000, respectively.
|
2011
|
2010
|
|||||||
Long-lived Assets, net:
|
||||||||
Contract manufacturing services
|
$ | 1,511,000 | $ | 1,311,000 | ||||
Products in research and development
|
698,000 | 158,000 | ||||||
Total
|
$ | 2,209,000 | $ | 1,469,000 |
Quarter Ended
|
||||||||||||||||||||||||||||||||
April
30,
|
January
31,
|
October
31,
|
July
31,
|
April
30,
|
January
31,
|
October
31,
|
July
31,
|
|||||||||||||||||||||||||
2011
|
2011
|
2010
|
2010
|
2010
|
2010
|
2009
|
2009
|
|||||||||||||||||||||||||
Net revenues
|
$ | 2,729,000 | $ | 2,883,000 | $ | 4,671,000 | $ | 3,209,000 | $ | 4,420,000 | $ | 9,877,000 | $ | 6,896,000 | $ | 6,750,000 | ||||||||||||||||
Gross profit (loss) (a)
|
$ | 559,000 | $ | 196,000 | $ | 624,000 | $ | (173,000 | ) | $ | 652,000 | $ | 1,071,000 | $ | 1,768,000 | $ | 997,000 | |||||||||||||||
Loss from operations
|
$ | (9,954,000 | ) | $ | (8,843,000 | ) | $ | (8,378,000 | ) | $ | (7,512,000 | ) | $ | (7,569,000 | ) | $ | (1,317,000 | ) | $ | (2,537,000 | ) | $ | (2,190,000 | ) | ||||||||
Net loss
|
$ | (10,014,000 | ) | $ | (8,929,000 | ) | $ | (7,513,000 | ) | $ | (7,695,000 | ) | $ | (7,741,000 | ) | $ | (1,538,000 | ) | $ | (2,787,000 | ) | $ | (2,428,000 | ) | ||||||||
Basic and diluted loss per ommon share (b)
|
$ | (0.15 | ) | $ | (0.14 | ) | $ | (0.13 | ) | $ | (0.14 | ) | $ | (0.16 | ) | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.05 | ) |
|
(a)
|
Gross profit (loss) represents contract manufacturing revenue less cost of contract manufacturing.
|
|
(b)
|
Basic and diluted loss per common share for fiscal quarter ended July 31, 2009, has been adjusted to reflect a 1-for-5 reverse stock split, which was effective at the close of business on October 16, 2009.
|
PEREGRINE PHARMACEUTICALS, INC. | SCHEDULE II |
Balance at
|
Charged to
|
Balance
|
||||||||||||||||||
Beginning
|
Charged
|
deferred
|
at end
|
|||||||||||||||||
Description
|
of period
|
to expense
|
revenue
|
Deductions
|
of period
|
|||||||||||||||
Valuation reserve for trade and other receivables, and unbilled amounts
|
|
|
||||||||||||||||||
Year ended April 30, 2009
|
$ | - | $ | - | $ | 51,000 | $ | - | $ | 51,000 | ||||||||||
Year ended April 30, 2010
|
$ | 51,000 | $ | 20,000 | $ | 202,000 | $ | (51,000 | ) | $ | 222,000 | |||||||||
Year ended April 30, 2011
|
$ | 222,000 | $ | - | $ | 293,000 | $ | - | $ | 515,000 |
Corporate Milestone
|
Measureable Event
|
Milestone Deadline
|
Successful FDA CMC Meeting Outcome
|
Upon shipment of PAX (bavituximab) material to first clinical site for use in clinical studies. Milestone shall be based on the shipping date of PAX to the first clinical site.
|
June 30, 2010
|
Initiate Three (3) New Bavituximab Clinical Trials
|
Upon the third (3rd) new clinical trial initiated (1st site is open for enrollment). Milestone shall be based on the date the 1st clinical site of the 3rd study is open for enrollment.
|
June 30, 2010
|
Extension of TMTI Government Contract
|
Upon government approval (contract amendment) to exercise option period one under TMTI contract dated June 30, 2008. Milestone shall be based on the effective date of the contract amendment.
|
July 31, 2010
|
Complete Enrollment in Cotara Phase II Study
|
Dose 40th patient in Cotara Phase II study. Milestone shall be based on the date that the 40th patient receives infusion of Cotara.
|
September 30, 2010
|
Initiate a Total of Six (6) New Bavituximab or Cotara Clinical Trials
|
Upon the sixth (6th) new clinical trial initiated (1st site is open for enrollment). Milestone shall be based on the date the 1st clinical site of the 6th study is open for enrollment.
|
December 31, 2010
|
Successful Regulatory Inspections
|
Successfully complete all Avid regulatory inspection(s) with zero critical observations for inspections completed through 4/29/11. In the event a regulatory inspection is ongoing as of April 29, 2011 with no definitive conclusion, such inspection shall not be considered into such milestone. In the event Avid has not been inspected by any regulatory authorities during such period, such milestone shall not be deemed achieved.
|
April 29, 2011
|
Complete Enrollment in Bavituximab Registrational Phase II Clinical Trial
|
Upon last patient receiving initial treatment dose in bavituximab NSCLC second line docetaxel study. Milestone shall be based on the date that the last patient receives initial treatment.
|
June 30, 2011
|
Continued Avid Business Success
|
Upon issuance of audited financial statements (date of audit opinion), Avid is deemed a break even stand-alone Company (zero or higher) based on third party and government revenue for FY’2011. Break-even shall be calculated as follows:
Net income (loss)
Plus non-cash expenses
Minus non-government intercompany revenue
Plus raw material and supplies incurred on non-government intercompany revenue
|
July 15, 2011
|
PEREGRINE PHARMACEUTICALS , INC.
|
|||
|
By:
|
/s/ | |
Steven W. King
|
|||
President and Chief Executive Officer | |||
GRANTEE:
|
|||
Signature
|
|||
Name: [First and Last Name]
|
|
EXHIBIT 10.29
|
|
EXHIBIT 21
|
Dated:
July 14, 2011
|
Signed:
/s/ STEVEN W. KING
|
Steven W. King
|
|
President & Chief Executive Officer, and Director
|
Dated:
July 14, 2011
|
Signed:
/s/ PAUL J. LYTLE
|
Paul J. Lytle
|
|
Chief Financial Officer
|
By:
|
/s/ STEVEN W. KING
|
Name:
|
Steven W. King
|
Title:
|
President & Chief Executive Officer, and Director
|
Date:
|
July 14, 2011
|
By:
|
/s/ PAUL J. LYTLE
|
Name:
|
Paul J. Lytle
|
Title:
|
Chief Financial Officer
|
Date:
|
July 14, 2011
|