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Peregrine Pharmaceuticals (NASDAQ:PPHM)

Q3 2014 Earnings Call

March 07, 2014 11:00 am 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

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

Robert Garnick - Head of Regulatory Affairs

Analysts

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

William R. Quirk - Piper Jaffray Companies, Research Division

Graig C. Suvannavejh - MLV & Co LLC, Research Division

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

George B. Zavoico - University of Virginia

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the Peregrine Pharmaceuticals, Inc. Third Quarter Fiscal Year 2014 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to Jay Carlson of Peregrine's Investor Relations group. Mr. Carlson, you may begin.

Jay Carlson

Thanks, Bridget. Good morning, 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 a brief overview of the company's progress over the last quarter, including the initiation of our SUNRISE Phase III trial, updates to investigator-sponsored trials or ISTs, and the milestones coming from our preclinical immunotherapy development program. Joe will provide an update on our SUNRISE Phase III clinical trial, clinical achievements from the quarter, as well as the progress from our preclinical development program. Rob will provide commentary on our recent regulatory milestones, and Paul will then finish with a summary of our financial results for the third quarter fiscal year 2014, including our recent offering, and provide a review of the quarterly performance of our wholly-owned subsidiary, Avid Bioservices. 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 2013 ended April 30, 2013, and quarterly report on Form 10-Q for the third quarter ended January 31, 2014, 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 duties 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, and thanks to all of you for participating in this morning's call. The last few months at Peregrine have been a very exciting time, with the initiation of the SUNRISE Phase III study, continuing developments on the preclinical front that are pointing to new clinical combinations for bavituximab with exciting potential, successful fundraising efforts and a continuing solid performance from our manufacturing subsidiary, Avid. I don't want to overuse the word excitement, but these are truly exciting times that have positioned us for success on all fronts.

Since our last quarterly conference call, we have achieved 2 very important milestones for our bavituximab clinical program. These developments included initiation and the start of patient treatment in the SUNRISE Phase III trial, evaluating bavituximab plus docetaxel in second-line non-small cell lung cancer, and receiving Fast Track designation from the FDA for this lead indication, an important development that can pay significant dividends as we continue to advance the program. Joe Shan and Rob Garnick will provide the details later in the discussion, but I can say that this global Phase III study is going very well on all fronts, and the team has done a great job of positioning it to meet our enrollment goals.

While the majority of our Peregrine resources have been directed at the Phase III study, we are also continuing to evaluate new avenues in which to expand the bavituximab clinical program. With exciting clinical data already in hand in breast cancer, this quarter, we expect an update from one of our ISTs in liver cancer, which we believe is another potential future development target.

Our preclinical group, along with our collaborators, have also continued to deliver interesting combination immunotherapy data with other and novel immunomodulatory agents, where we believe, based on the upstream nature of our target, bavituximab has the potential to synergize nicely with other downstream immune checkpoint inhibitors.

We will have the opportunity to share some of these results over the coming month at high-profile scientific venues, including 3 at Keystone Symposia, at the Immunotherapy of Cancer Conference and at AACR. A full list of these conferences can be found at our website.

These results have already supported one of our clinical collaborators initiating the first immunotherapy combination trial with bavituximab in March. Joe, again, will provide more background. But needless to say, lots of important developments underway on the product development side of our business.

Biotech product development is a capital-intensive industry. In accordance, over the past few months, we have taken a number of steps to ensure our ability to fund these exciting development programs. In short, as we continue to maintain a balanced financial approach, we are being innovative on the financing front, as evidenced by our recent Series E financing, which was the first of its kind use in the biotech industry. Paul Lytle, our CFO, will highlight these efforts during his discussion of overall company financials.

Business development remains a very active -- very active throughout our business, both on the Peregrine and Avid fronts. During the last quarterly call, I introduced Stephen Worsley as our Vice President of Business Development. Steve has hit the ground running since joining us, and along with his business development reports, have been active on all fronts. While specifics cannot be discussed until deals are culminated, what I can say is that we have seen a high level of interest from potential partners in the bavituximab program as a whole, in collaborating with us to evaluate bavituximab in combination with other novel immunotherapies, in collaborating with us on new areas and in our contract manufacturing services.

With the Phase III study now underway, our main interest in partnering for the bavituximab program would be to allow us to be more aggressive in advancing new clinical indications, namely moving new indications in the later-stage development in areas such as breast and liver cancer. And we look forward to updating you as partnerships are brought to fruition over the coming year.

As you can see, it has been a very busy past few months, full of important developments. And I will now turn the call over to the team to discuss those developments in more detail, starting with Joe Shan. Joe?

Joseph S. Shan

Thanks, Steve. To expand a bit on what you just said, the initiation of the SUNRISE pivotal Phase III trial in non-small cell lung cancer was a major event for us, and one that continues to serve as the main focus for our clinical and regulatory teams. As this pivotal trial will involve over 100 clinical sites worldwide that will enroll close to 600 patients, the continued positive and timely execution of tests is paramount to the success of this trial.

To that end, we have accomplished a great deal during this past quarter, as the first clinical sites were initiated and with patients already enrolled and being dosed. We also remain on track with our regulatory and ethics approval timeline for rolling out European and Asian-Pacific sites over the next few months.

Another highlight of the quarter was the receipt of Fast Track designation from the U.S. FDA for the combination of bavituximab and docetaxel to improve overall survival in patients with previously treated non-squamous, non-small cell lung cancer compared to docetaxel alone, which is the indication being examined in the SUNRISE trial. This designation facilitates the development and the review of marketing applications for promising drugs like bavituximab, which are intended to treat serious or life-threatening conditions for indications of unmet medical need.

Rob, would you like to add anything?

Okay. Well, besides the start of activities of the SUNRISE trial, our teams also have been working to translate the results demonstrating the immune stimulatory mechanism of bavituximab from the laboratory setting to the clinic.

The most recent addition to our clinical trial pipeline comes from these efforts. Last quarter, at the Society for Immunotherapy of Cancers Annual Meeting, we presented very encouraging preclinical data, demonstrating that in a mouse melanoma model, a mouse version of bavituximab combined with an anti-CTLA-4 antibody, resulted in superior tumor growth inhibition compared to either antibody treatments alone, and importantly, with no additional toxicity following multiple treatment doses.

Following these data, we anticipate in the near future the initiation of an investigator-sponsored trial of bavituximab in combination with ipilimumab, an approved anti-CTLA-4 antibody marketed as YERVOY for the treatment of melanoma. As this is a randomized open-label Phase Ib trial, there's a potential for multiple data readouts throughout the course of the trial.

As Steve mentioned, we'll continue to aggressively pursue opportunities that emerge from our preclinical immuno oncology program. Over the next few months, we anticipate sharing with you all the additional data that will fuel our clinical program aimed at realizing the full potential of our novel immunotherapy, bavituximab.

With that, I'll turn it over to Paul for a review of the financials for the quarter.

Paul J. Lytle

Thanks, Joe, and good morning, everybody. There are a few important financial highlights that I'd like to cover this morning regarding our increasing cash position, the recently closed Series E convertible preferred stock transaction and our operating cash burn rate for the quarter, including revenue guidance from our wholly-owned subsidiary, Avid Bioservices.

Let me start with our increasing cash position. In order to advance our ongoing Phase III SUNRISE trial, as well as leverage the findings from our immunotherapy development program, we have taken careful steps to effectively manage our business, while simultaneously enhancing our financial position with our various sources of capital. Our financial position is strong, and we have increased our cash position steadily over each of last 7 quarters to over $63 million at the end of January, and to just under $80 million at the end of February, which includes proceeds we received from the Series E convertible preferred stock transaction.

As I mentioned on the last earnings call, our goal has been to seek available sources of capital that are less-dilutive, and we have executed on this strategy by entering into one of the least-dilutive financing vehicles we've seen in the biotech space. In fact, to our knowledge, we are the first biotech company to enter into this innovative financing structure, and it has been well-received by both the investment community and the banking community.

Since this type -- since this is a new type of financing, let me walk you through the structure in a little more detail and our thinking behind the Series E convertible preferred stock transaction.

First, it's important to note that the Series E Preferred Stock trades separately on NASDAQ under the ticker symbol PPHMP. The letter P at the end of the ticker represents Preferred. And during February, we sold a total of 775,000 shares of Series E preferred at the offering price of $25 per share in an underwritten public offering. This equates to $19.4 million in gross proceeds.

The preferred shares will earn dividends at a rate of 10.5% per annum, and these dividends will be paid quarterly. This is very similar to an interest-bearing term loan, except interest on a term loan is usually paid monthly and would include principal payments as well.

The preferred stock transaction represents no immediate dilution, but can be converted into common at a price of $3 per share at any time by the investor. This conversion price represented a 75% premium to the closing market price of our common stock on the day prior to pricing.

In addition, we included a company-only option to pay off the preferred shares in cash after 3 years, or at any time thereafter, at the same $25 offering price per share. And if we do pay this off in cash, there would be no dilution at all, and this would be very similar to an interest-only term loan for that 3-year period.

It is also important to note that we strategically picked a 3-year period to coincide with the anticipated time frame of unblinding the Phase III SUNRISE trial. We are planning for success, and we aligned the terms of this preferred stock transaction accordingly.

Another important term of our ability -- another important term is our ability to force conversion of preferred shares into common shares, but only at the company's option that the common share price reaches 100% -- 130% of the conversion price or $3.90 per share. For 20 out of 30 trading days, we can force preferred shareholders to convert into common stock. Again, this is at our option only.

And last but not least, there is no financial covenants associated with preferred shares like the ones you typically see with a term loan, and there is no maturity date.

This is an innovative financing vehicle that is more commonly seen in the real estate and oil and gas industries, and it was made available to us because of our hybrid business model and the revenue we generate from Avid.

Let me switch gears now for a minute to discuss our cash burn from operations. Our net cash burn rate from operations is calculated by taking our net loss from operations and subtracting non-cash expenses like depreciation and share-based compensation. For the quarter-ended January 31, 2014, our cash burn rate was $7.9 million compared to $4.9 million in the same quarter last year.

We saw a quarter-over-quarter increase in our cash burn rate due to higher expenses associated with the Phase III trial and certain G&A expenses, combined with lower quarter-over-quarter revenue from Avid.

Now turning to revenue. Contract manufacturing revenue was $3.9 million this quarter and $15.8 million for the current 9-month period.

Revenue for the 9-month period was slightly down compared to the prior-year period, primarily due to the timing of shipments and lot release. But I'd like to reiterate that we are maintaining our initial contract manufacturing revenue guidance of $18 million to $22 million for the entire fiscal year '14, and we are on track to hit the higher end of that range.

I would also like to emphasize that we have a strong backlog for future services in the amount of $24 million as of January 31, covering services to be completed during the remainder of this fiscal year and into fiscal year 2015.

We look forward to keeping you updated on our progress, and we will now open the call up to your questions. Bridget?

Question-and-Answer Session

Operator

[Operator Instructions] Our first question is from Joe Pantginis with Roth Capital Partners.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

A couple of questions. First, with your -- with the recent financings and the preferred, obviously, you said you have a much stronger balance sheet right now. Would you be able to comment on how this bolstered balance sheet has potentially improved your partnering discussions or helped your partnering discussions because you have this additional financial leverage?

Steven W. King

Yes. I mean, I think that's right on track. I mean, I think one of the goals of the financing, obviously, is to ensure that we have the ability to execute on the Phase III study and to bring that all the way across the goal line. And of course, that puts you in a much stronger position with regard to partnering discussions, particularly as they think they -- that you need the capital to complete the study, and they have the upper hand and that's going to work against you in any negotiation. So yes, I think it significantly strengthens our ability, not just executing on Phase III, but all the other areas for business and to continue to explore even broadening potential indications. And I think one of the other areas that is, I think, exciting that's really heated up is the discussions around just collaborations to combine our agents with some of the other novel immunotherapies, which again, is just further expanding the potential applications of the platform and only adds value to the overall program.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Got it. And then I appreciate the early guidance from Joe regarding SUNRISE. And I was just curious going forward what your -- I guess, your communications policy would be regarding enrollment or enrollment trends?

Steven W. King

Yes. I mean I think that the way we're looking at this is the key to some -- one of these global studies is its clinical success is also regulatory success. And so far, I think everything is right on track with running the worldwide study, with the regulatory filings x U.S. So we're on track to be able to move forward in multiple territories almost simultaneously. So that's very important, keeping enrollment goals kind of on track. We do have the 2 interim data looks, that will be another indicator, of course. Those are time-to events or event-driven. But certainly, we'll have those 2 things during the course of the study. And if we, obviously, significantly get ahead of schedule or behind schedule, then we will give an update. Otherwise, we're just going to execute on the 2-year enrollment and, of course, then I'll talk -- get it done earlier.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Right, right. Okay, no, that's helpful. And I guess my last question is, with regard to your ongoing business development activities, I guess, you did mention various types, obviously, whether it's collaborative types of studies with companies, drug-drug combinations or actual partnerships, and obviously, Avid, new types of deals for the Avid production. But also, just wanted to confirm also that Cotara still remains in the mix?

Joseph S. Shan

Yes, absolutely. I think that that's, some of the other areas of collaboration, when we refer to that. So obviously, we have the Cotara, we have our imaging program, we have other things that are in preclinical development. So I think Steve has done a great job of, as I said in the discussion, of really hitting the ground running on multiple fronts. So I think that -- I'm happy with the activity there and the level of interest, and so now it's just a matter of executing and getting these things completed.

Operator

And our next question is from Charles Duncan with Piper Jaffray.

William R. Quirk - Piper Jaffray Companies, Research Division

It's William for Charles. A couple of follow-ups, I guess. Are you guys looking at any subgroups, maybe EGFR status or PD-1 in SUNRISE?

Joseph S. Shan

Yes. That information can be collected, and we actually have some stratification built into the protocol. But we're not restricting enrollment based on status.

William R. Quirk - Piper Jaffray Companies, Research Division

Okay, okay, very good. All right. And then I guess, can you provide a little bit of color on the recent Keystone abstracts, the presentations, the -- I guess, the key takeaways from that?

Steven W. King

Yes. I mean, I think that we've got a couple of presentations or a few presentations coming up the Keystone Symposia. We'll give a little bit more color on those as the presentations are made. Obviously, the -- we have collaborators that are making presentations. We have our own internal presentations. But it's really continuing to expand on the theme of bavituximab as an immunotherapy, where we see this fits into the space, and some of the broader utility and ways it might be used. So I think you'll see that kind of expanded on, on all fronts with regard to the cancer program. And it's a great opportunity to kind of highlight some of the combined ability of the drug with these other novel agents. And I think, just quickly, back to your previous question. We are, as part of our global program, doing a lot of biomarker work. And so, certainly, as we start, particularly new ISTs or new clinical studies, we'll be able to build in even more types of analysis such as PD-1, such as changes in MDSCs, tumor-associated macrophages and what have you. So we are really building that into the new studies. That's where we're trying to take advantage of the developments on the scientific side and translate those over to clinical side. So again, those are all fertile areas of data coming out throughout the course, not just 2014, but even beyond.

William R. Quirk - Piper Jaffray Companies, Research Division

Okay. And then a quick question on the study with YERVOY. I know it's an IST, but do you guys have any idea about, I don't know, maybe number of patients and we'll probably see data this year?

Joseph S. Shan

Yes, that's a Phase I study, so a couple of dozen patients are planned. But because it's an IST, I think the exact timeline is really out of our control. But we do expect -- because it's open-label, as we mentioned, that there will be opportunities for some data readouts.

Steven W. King

Yes. And again, I think some of the primary things we're building into that study is a lot of the translational type data. Again, looking at these changes in immune response and really some things we can build on. And the good news is, again, since it's open-label, is as we get data from the study, it allows us to really accelerate the movement into new areas as well.

Operator

And our next question is from Graig Suvannavejh with MLV & Co.

Graig C. Suvannavejh - MLV & Co LLC, Research Division

A couple of questions, if I may. First, I just want to talk about the backlog. And I know that you're reiterating guidance, but just from a -- maybe a bigger picture perspective, how should we think about the backlog? I mean, the last quarter, I think, was $21.5 million and now you're reporting $24 million. Is an increase in the backlog -- is that a good thing necessarily, or is that not a good thing?

Paul J. Lytle

I think the -- thanks for the question, Graig. I think the increase in backlog just shows kind of the book of business that has been built and committed to. So any time we can increase that backlog, I think it's a positive thing. I mean, as there's more customer demand and additional manufacturing runs that need to be produced for our customers. So it's definitely a good thing, and we're very excited about that.

Graig C. Suvannavejh - MLV & Co LLC, Research Division

Okay. Secondly, question just has to do with thoughts around bavituximab being a checkpoint inhibitor. I was just wondering if there's a way to kind of quickly review the reasons that lead you to that conclusion?

Steven W. King

Yes. I mean, I think it's really built on a lot of data, not just from Peregrine, but from the field in general of understanding the role that PS plays in signaling the immune system. And I think it's really -- when people hear we're targeting PS, and that it's not really on the radar screen of a lot of people think about immunotherapy. But when you think about some of the molecules that are involved as PS receptors, there's TIM-1, TIM-3. So really some other household names within -- in kind of the immune stimulation forefronts are actually involved with PS binding. And so I think as we get further along, more of that data will start to come out. I think it particularly has to do with some of the combinations, because, I think, what's now known very well is that PS is not just there, it's a signaling molecule, and it really does induce these changes in the immune system. And whether you call it an immune checkpoint inhibitor, an accelerator, I mean there's all kind of ways the you can refer to it. But the bottom line is, this has really, I think, been shown through many publications to be actively involved in modulating the immune system, and this is one of the basic control points for the body not eliciting responses to self antigens in cases such as when cells just simply die. So that's the reason we feel strongly to kind of consider that category. How you refer to it, I think, is somewhat irrelevant to the fact that it does play a key role in modulating the immune system.

Graig C. Suvannavejh - MLV & Co LLC, Research Division

Okay. My last question, at least for now, has to do with -- just the competitive landscape is very dynamic here in lung cancer, and I was just wondering if you could provide your thoughts on the recent Lilly phase III data, and how that changes or maybe that doesn't change your view for the competitive landscape and where you think bavituximab can kind of be positioned relative to kind of what's happening?

Joseph S. Shan

Yes, Graig, this is Joe. I don't think it changes our position for bavituximab at all. I mean, these are totally different pathways. Bavituximab is, really, as we just talked about, an immune-modulating drug, and this not necessarily mutually exclusive with other approaches like the Lilly VEGF agonist. I think it's really -- we said all along, bavituximab has the potential to be combined with a variety of different drugs and that, in the future, may be interesting to explore. I don't know, Rob, would you -- do you have any comments on the landscape and how our data to date kind of fits in?

Robert Garnick

No, I think, I agree with Joe. I mean, bavituximab really represents a unique opportunity. And I don't think you can draw any conclusions from failed Phase III trials from other companies' products because basically, they're -- a lot of drugs were taken into Phase III, basically, on much less compelling data than we were able to achieve with bavituximab. So I think we're actually very well-poised, based on our data, to see potentially a very successful Phase III trial. And again, I wouldn't draw any conclusions on other people's trials. We're really in a very good position because based on our data -- we've just recently achieved global regulatory approvals for going into Phase III based on the strength of the data -- the total data package that we presented. So I think that's quite a testimony to the data package that we've been able to achieve so far. And of course, we'll see how everything progresses during the SUNRISE trial, which now is ready to go. So back over to you, Joe.

Joseph S. Shan

Graig, does that sort of answer your question?

Graig C. Suvannavejh - MLV & Co LLC, Research Division

It does.

Operator

And our next question is from George Zavoico with H.C. Wainwright.

George B. Zavoico - H.C. Wainwright & Co, LLC, Research Division

I guess, Paul, I guess this first question is directed towards you regarding the recent raise and the linkage of that raise to the end of SUNRISE and Avid. You mentioned Avid was an important aspect of being able to get the deal done because of the revenue generation from there. So you now have $80 million. And I imagine, how did you chart the expenses for the trials, the potential Avid revenue and the -- to come to that 3-year time point? Do you expect to need to raise money again before you get to that point? How much is the SUNRISE -- and how much is the SUNRISE going to cost? And are you going to -- because you'd mentioned this before about Avid, expanding the capability of Avid, and this speaks to the backlog as well. Are you going to use some of those funds to expand the footprint of your Avid business?

Paul J. Lytle

Yes, just to give you just an overall overview here, George. The 3-year timeframe is really the timeframe that we selected for paying off that preferred stock in cash, giving our ability -- giving us the ability to do that. And that was to coincide with the timing of unblinding the trial. So we're looking at a 24-month enrollment period, and then about a 12-month follow-up period, in which by the time we unblind this trial, we would have the ability to pay off that loan or to pay off that preferred stock transaction, basically, at our option. As Steve mentioned earlier, as you know, biotech is capital-intensive, and this really bolsters our cash position, but I can't say that we won't need additional capital to run the Phase III and to complete the Phase III. Obviously, you're looking at partnering opportunities and bolstering Avid's business opportunities, that's going to be also key for us, which would minimize future dilution from that standpoint. So yes, we're excited that we've taken a [indiscernible] that can overhang off the story with regards to the financing overhang. And we have great plans here now and the financial resources to execute properly on the Phase III trial, and we're doing that.

George B. Zavoico - University of Virginia

So is expanding Avid and marketing it, trying to gather more customers part of the plan as well?

Paul J. Lytle

Yes, definitely, yes, definitely. We treat Avid as a separate business. It's a business that needs to grow, and our goal is to grow that business. And I think we have some exciting things coming down the pipeline that's going to help us grow that business in addition to what we're doing now for some of our key commercial manufacturing customers like Halozyme Therapeutics.

Steven W. King

Yes, I think a big part of that, George, also, is that, obviously, in planning for success, we need to be ready for bavituximab commercialization, the ability to produce that material and to be able to execute on that side that doesn't get a lot of attention, but unless you have a manufacturing problem, then we'll certainly want to stay out of that area. But I think we want to -- just to kind of expand out, I mean I think we want to invest in programs that make sense and will add significant value over the coming next few years. And so whether that be -- we may get exciting data from one of these clinical trials or built on the exciting breast cancer data that we already have, and invest in new clinical directions also. So part of how far the money goes is what activity you should take on also. But I think, bottom line is everything we invest in, we want to be something that can pay very high returns within the next few years.

George B. Zavoico - University of Virginia

And that segues into my next question, because, clearly, as a cost-saving measure, it's very efficient to use investigator-sponsored trials. And right now, you're moving into Phase III, really, with a single company-sponsored trial. You just mentioned some exciting results. Are you -- and obviously, company-sponsored trials add the greatest value to you in terms of being able to keep as much of the upside as possible, getting data before you partner it. Are you leaving some room in your budget to -- as you say, if you get some exciting breast cancer results, to actually start another late Phase II or pivotal Phase III trial in another cancer indication?

Steven W. King

Yes, I think we're going to leave that open. I mean, I think obviously, it's resource availability that will determine our ability to start those new studies. But absolutely, I mean, there's actually a lot of excitement about the breast cancer data that was presented at ASCO last year, in which we saw 85% tumor response rates in HER2-negative breast cancer patients, and about half those patients were actually triple negative, and that's a huge area of opportunity from a development standpoint, and also, I think an area that would be very attractive from a market perspective. So absolutely. I think we want to let the science and the clinical results guide us into what those next investments should be. But that's just an example of one that we have right now. And obviously, with this ongoing studies in liver cancer and the new study in melanoma, new things may pop up here. So yes, I mean I think our goal is to build the franchise here, and again, this is where partnering discussions come in as well, because that clearly would be a primary focus there of getting a partner with a mindset that they want to run a broad program, which could include multiple Phase IIIs even, potentially, and that's really level of interest there. If not, we can execute the Phase III and do some other things ourself. But we do want to make sure we get the most out of bavituximab and get it in as many hands as possible.

George B. Zavoico - University of Virginia

And then, in that regard, I mean, you're right. Last year was transformative in the sense of you got a much better understanding of how bavituximab works as a checkpoint inhibitor. And overall, at a couple of conferences, it was actually recognized by certain key opinion leaders as being a checkpoint inhibitor. But it's not a typical one. I mean, it's not a protein-protein type, cell-to-cell type receptor-ligand interaction. You've got a lipid as a ligand, a phospholipid as a ligand. How has the educational strategy gone in terms of getting folks to really look at this in a different way, rather than as how bavituximab was positioned before? It sounds like from all the added interest you're getting, you're successful in that regard.

Steven W. King

Yes. No, I think it's been very successful. In fact, I think as you mentioned, we find that we're now included in a lot of the new conferences, a lot of the listings of immunotherapy agents, being picked up in presentations like KOLs. I mean, clearly, the recognition of the potential importance of this as an immunotherapy target, I think, has really picked up. And again, I think it -- also as people begin to put the pieces together, the fact that some of the other molecules they may be more familiar with actually have a PS binding component, and that also then kind of starts to educate people on the fact that, "Okay, well, this is really -- has been part of the discussion all along. It's just we didn't know it by this name." And so I think that that's all been very positive. And I think, one of the other aspects and kind of what, I think, is exciting is the fact that as we've been going out and really soliciting good quality investigational sites for the Phase III, there's been a tremendous amount of interest then from very high profile, very good clinical sites and clinicians. And so, again, they -- what they want to be involved in are exciting new compounds that could be breakthroughs. And I think we've been extremely happy with the response to being involved in our studies. And that only speak good things about what we can expect on the enrollment side and what have you.

George B. Zavoico - University of Virginia

Okay. In terms of this being a very important year for you. Honestly, it's shaping up to be one. I was wondering about what other guidance you might be looking for? I was looking at your board, for example, and you have folks on your board that are mainly experts in corporate finance and government -- governance, but not so much in terms of mergers, acquisitions, partnering, regulatory, although you don't need regulatory guidance because you've got Rob, and commercialization aspects. Are you looking at all to bolster your board, expand on the expertise there to help you through this next couple of years that's, hopefully, will be very transformative?

Steven W. King

Yes. I mean, I think we operate the business, obviously, as we're always interested in the potential of adding good quality individuals to the board that can add value. We also, of course, have people like Rob on board and other experts in their individual areas of expertise. And so it's not just people, it's companies that are helping us to make decisions and direction, regulatory strategy, clinical development strategy, but we really have world-class people on all aspects, whether it be research and developments, again, through the KOLs that we're collaborating with. Again, we have Rob on board who probably knows the regulatory area for biologics better than anybody else, and the same thing on the clinical front and the people we partnered up with. So I think we try to cover all those areas. Same thing on the business side, is we're not in a bubble here, we do go out and seek the advice of experts, and people who have been successful and we want to follow the models that have worked in the past.

Operator

I'm not showing any further questions at this time. Mr. King, please proceed with any further remarks.

Steven W. King

Okay. Well, first of all, thank you again for participating in today's call. I hope from what you've heard today that you would agree that Peregrine is in a very favorable position and has been exhibiting across the clinical, regulatory, financial and manufacturing fronts. We do look very much forward to continuing to advance our important clinical programs with the hope that we can make a real difference in the treatment of cancer patients. So again, thank you very much, and we look forward to updating you as we continue to make advancements.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great weekend.

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