U.S. Markets open in 7 hrs 1 min

Peregrine Pharmaceuticals' Q4 Loss Narrower than Expected

Zacks Equity Research

Peregrine Pharmaceuticals, Inc. (PPHM) reported a net loss of 6 cents per share in the fourth quarter of fiscal 2014 (ended Apr 30, 2014), narrower than the Zacks Consensus Estimate of a loss of 8 cents. The fourth quarter loss was in line with the year-ago loss.

Revenues increased 52.2% to $6.5 million, much above the Zacks Consensus Estimate of $4 million.

Peregrine Pharma’s net loss for fiscal 2014 of 22 cents per share was in line with the Zacks Consensus Estimate but narrower than the year-ago loss of 25 cents per share. Revenues for the fiscal year increased 3.3% to $22.4 million, beating the Zacks Consensus Estimate of $21 million.

Quarter in Detail

Avid Bioservices, a Peregrine Pharma subsidiary, posted contract manufacturing revenues of $6.5 million during the quarter, up 55.0% year over year. For fiscal 2014, Peregrine Pharma reported contract manufacturing revenues of $22.3 million, above its guided range of $18−$22 million. For fiscal 2015, the company expects contract manufacturing revenues in the $19−$23 million range.

Peregrine Pharma’s total costs and expenses increased 33.7% during the fourth quarter of fiscal 2014 to $17 million, primarily due to higher research and development (R&D) expenses. R&D expenses increased 51% to $6.5 million. Selling, general and administrative (SG&A) expenses were up 19.0% to $3.8 million.

Pipeline Update

Peregrine Pharma’s lead pipeline candidate, bavituximab, is being developed for multiple oncology indications including the treatment of second-line non-small cell lung cancer (:NSCLC). Bavituximab has received Fast Track designation from the FDA for the NSCLC indication.

The company is conducting a pivotal phase III study, SUNRISE (Stimulating ImmUne RespoNse thRough BavItuximab in a PhaSE III Lung Cancer Study), on bavituximab for second-line NSCLC. The study will enroll approximately 600 patients by the end of 2015. The randomized, double-blind, placebo-controlled, phase III trial will compare bavituximab in combination with Sanofi’s (SNY) Taxotere (docetaxel) to Taxotere and placebo.  

Apart from NSCLC, bavituximab is being developed for other oncology indications including HER2-negative metastatic breast cancer (phase I – final data expected in fiscal 2015), advanced hepatocellular carcinoma (phase I/II), treatment naïve stage IV NSCLC (phase Ib – additional data expected in fiscal 2015), advanced melanoma (phase Ib) and stage II/III rectal adenocarcinoma (phase I).

Our Take

We are pleased with the higher-than-expected revenues and narrower-than-expected loss in the reported quarter. We expect investor focus to remain on updates pertaining to bavituximab. The successful development and commercialization of bavituximab would be a major positive for Peregrine Pharma, which currently has no approved drug.

Peregrine Pharma carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health sector include BioMarin Pharmaceutical Inc. (BMRN) and Biogen Idec Inc. (BIIB), each carrying a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on SNY
Read the Full Research Report on BMRN
Read the Full Research Report on BIIB
Read the Full Research Report on PPHM

Zacks Investment Research