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Peregrine Pharmaceuticals Inc. (PPHM)

November 15, 2011 11:30 am ET

Executives

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

Analysts

Jeremy James Joseph

Jeremy James Joseph

Welcome, my name is Jeremy Joseph, and I'm a biotech associate here at Lazard Capital Markets. Today, Peregrine Pharmaceuticals will be presenting. Peregrine is a clinical stage biopharmaceutical company engaged in the research and development of monoclonal antibodies for the treatment of cancer and viral infections. Today, we have Steve King, President and CEO.

Steven W. King

First of all, I apologize. I'm a little bit under the weather today, but hopefully, I'll make it through the presentation okay. I'd like to thank the organizers for inviting us here today to tell you a little bit about the Peregrine story, where we're at in our clinical development as well as our overall operations as a company.

So first and foremost, we're a biotech company developing novel therapeutics under 2 technology platforms. I'll go into little bit more details on those. It's our PS-targeting platform as well as our DNA/histone targeting agents. And we have a very broad intellectual property. It covers both of these technology platforms, many of the concepts of targeting these targets as well as our specific drugs that are in development.

In addition, a different part of the story is we do operate a wholly owned manufacturing subsidiary called Avid Bioservices. This is a commercial manufacturing business that generates revenues from third parties as part of their development efforts. In addition, I think maybe even more importantly, it's a critical part of our -- of moving our own technology platforms forward. We manufacture all of our own clinical products, and that really is what's allowing us to run as many clinical studies as we are.

But really, focused again on our technology pipeline, we have multiple oncology indications as well as HCV program. And I think we've done a good job of assembling a team with really the experience in commercializing monoclonal antibodies. In particular, our Head of Regulatory, Rob Garnick, was in Genentech for 24 years, headed up regulatory there for 15, has 17 product approvals in the biologics areas, so really knows the ins and outs of working with the FDA to move drugs forward. In addition, we recently had onboard, Kerstin Menander to head up our Medical Oncology group, as well as Jeff Masten in quality to head up our manufacturing unit, and he actually helped to launch Avastin when he was in Genentech. So really I think a great team with the know-how to move these products forward.

The pipeline itself, we have 3 Phase II programs. We have bavituximab in multiple oncology indications including non-small cell lung cancer, pancreatic cancer as well as breast and prostate cancer. We have our Cotara program which completed Phase II trials for treatment of recurrent GBM. And then we have our hepatitis C program which is currently in the Phase II study in HCV, NIAID and type 1 patients. I'll talk a little bit more about each one of these programs. We do expect, over the coming months, to have meaningful clinical data from all 3 of our Phase II programs.

So a bit about bavituximab. So bavituximab is a monoclonal antibody-based therapy. The target itself is very novel, it's phosphatidylserine, or PS, which is normally present inside every cell of the body. It's illustrated here as the yellow structures. Normally, it's found very tightly regulated on the internal surface of cells. So then, basically, if you inject PS-binding agents into healthy animals or healthy patients, it has no target to bind to because it can't actually get to that internal cellular marker. What our scientists discovered is that as tumors progress because of the unique microenvironment inside the tumor or as cells become infected with viruses, the mechanisms that keep PS inside of cells become disrupted, and what you basically then have is PS exposed now on the outside of cells in that disease site. This makes for a very specific marker. We actually recently presented data showing just how specific of a marker this is through imaging studies. So it's really a very novel target itself.

Over the last few years, what's become known is that actually PS is a highly immunosuppressant molecule, so normally the only time PS is exposed, again, is in apoptotic cells. So normally healthy cells don't have PS on their surface. Well it turns out when the immune system removes dead and dying cells, there's actually a PS receptor on the immune cells that when it's triggered, it actually down-regulates the immune response. So as the body is clearing dead and dying cells, you don't want a robust inflammatory immune response, you basically want those cells removed. And PS becomes part of that signal of which the body says, "This is a dead and dying cell, don't elicit a robust immune response." Well, it turns out, tumors as well as viral infections do the same thing in order to basically mimic being dead and dying cells so they're able to outdistance the immune system.

Our antibodies come in, they bind to the target. As they bind to the target they do 2 things. One is they do normal antibody activities like ADCC, so killing or destroying the cells in the disease site. Secondly is actually blocking the immunosuppressive signal just by simply masking the PS. Now the immune system kicks in the gear also. So it's really a very unique target as well as a very unique mechanism of action.

And we've been able to show this unique mechanism of action, actually, at multiple different systems. Really, illustrated here, where you see the microphages in green, which again had been activated as part of blocking that PS signal. And then, of course, there's the antivascular effects of the antibody itself when you look at that in a tumor setting, which is the easiest way to look at it.

To tell where the program is, we've treated over 450 patients in 12 clinical studies for the program. Highlights last year were data from 3 Phase II single-arm studies. So these were single-arm studies, and what you see below each single-arm study is historical data with the same chemotherapy treatment regimen in a similar patient population.

We had 2 goals from these studies. The first was to have some sort of a benchmark for activity so we could compare with historical data and then follow-up in the next set of trials where we felt like we had the hot leads. Secondarily was safety. And for our novel targets with a novel mechanism of action, safety data is very critical in moving that program forward and actually expanding it. And I think we achieved both goals through these 3 studies. Across the board, in combination with carboplatin and paclitaxel in non-small cell lung cancer frontline as well as breast cancer, across the board good results, good tumor response rates, good progression-free survival. And into the data points, so far on the overall survival, excellent numbers already.

We also like the combination with docetaxel, which, again across the board, had good results and really outstanding overall survival data from that study. I will point out that we still have one data point that's coming in the future, an estimate in overall survival from our metastatic breast cancer frontline study.

So based on these results now with the FDA, we designed a number of studies as well as a strategy.

So our strategy is to pursue indications of high unmet medical need. Potential first approval is in second line non-small cell lung cancer in which we're running a double-blinded study. In addition, we're running a frontline non-small cell lung cancer very similar to the study from which I just reported the results on a single-arm study, that's a randomized study.

Pancreatic cancer is our other target from a company-sponsored trial standpoint. And we have great pre-clinical data that really supports the activity in that particular disease.

Cotara for the treatment of the recurrent GBM, again, high unmet medical need, devastating disease. We're looking forward to an FDA meeting with the -- in the fourth quarter of this year.

In addition, leveraging the broad potential of bavituximab by going into investigator-sponsored trials to look at those next set of what we think again could be hot leads from a development stand point, supporting new indications, combinations as well as completing our HCV proof of concept study.

And really, it's -- Avid, again, helps us to move these programs forward and run these ISTs by producing the material we need for the ISTs as well as for our later-stage clinical studies and preparing for commercialization.

And of course, in any economic environment, third-party revenue is a good thing. It helps offset our overall burn rate as well as, again, decreasing our own burn rate just through manufacturing our own products.

So if we look at the 3 trials that we're currently running and sort of the time line for data, it is the non-small lung cell cancer second-line study, again double-blinded placebo-controlled study, in which we expect to unblind the data in the first half of 2012. That's a 120-patient study, and we we've completed enrollment in October. The other study is a non-small cell lung cancer frontline study, 86-patient study randomized again to carboplatin, paclitaxel plus or minus bavituximab. Expect interim data in the fourth quarter of this year on overall tumor response. Top line overall tumor response data in the first quarter of 2012 and then the progression-free survival and overall survival numbers if the data matures.

The other study is our pancreatic cancer study in combination with gemcitabine, again, another randomized study. 70 patients were expecting to complete enrollment in 2012 as well as have interim data for the major endpoints of that study coming up in 2012.

Again, expanding beyond that, so these are other trials that we'll be generating data as we go along. These are all open-label studies, so we do have the potential to report data at some of the major medical conferences coming up in 2012. This includes a liver cancer study which could be very important from an ex-U.S. partnering standpoint. Prostate, again, non-small cell lung cancer looking at different combination with prematrexed, as well as breast cancer study, now starting to look at the subpopulations within breast cancer.

We also expect to have top line viral load data from our combination with rabivirin in a head-to-head with peginterferon, again, before the end of the year. So another good data point for other Phase II clinical program.

A little bit about Cotara. So you can see, for bavituximab, we've set the stage with a lot of what we think will be very exciting clinical results coming up. Cotara is essentially at the same stage. So Cotara is again monoclonal antibody-based therapy. The therapy is actually the antibody is bound to iodine-131 so the drug is infused in the brain tumor. It binds to the center of the tumor and essentially irradiates the tumor from the inside out. And I think what always stood out about this program are the long-term survivors. We've had some of the very first patients that were treated with this drug, they're now alive over 10 years with confirmed GBM at the time of treatment.

Data presented at ASCO of last year, again, a very nice time point, in 3 months, meeting overall survival along with good survival data at 6, 12 and 24 months. Based on this data, we're planning a meeting with the FDA in the fourth quarter of this year that we think will be very important, and can help set the stage for what the Phase III or pivotal trial design would look like. And of course, that's always a negotiation with the FDA, so we're going to open the dialogue with the FDA with a clinical trial we think we can operationalize within 18 months to 2 years. And from that standpoint, then we'll see how the dialogue goes. But we certainly expect to be successful here, and I know the group is excited to have that initial meeting coming up.

On the corporate side, as of our last quarter end, which is July 31, we had $17 million in cash and cash equivalents with a $7 million burn rate. Subsequent to quarter end, we raised another $9 million in additional proceeds.

In this you can see, taking a look back historically, we've been able to maintain a balanced financial approach in a number of ways. First of all is maximizing Avid's business with projected $10 million to $12 million in contract manufacturing revenues this year. We have a cost effective financing that complies with debt market issuance program, as well as a remaining shelf that is registered and available for use in future capital as well. Clean cap structure was really no surprise as hidden in the bottom line here.

So looking at the fourth quarter of this year, it's, again, overall tumor response data, interim data from the Phase II frontline study, FDA meeting for Cotara, interim data from the Phase III -- Phase II HCV trial. And looking at 2012, again, top line tumor response data from that frontline non-small cell lung cancer study, unblinding the second-line non-small cell lung cancer in the first half of next year, completing enrollment in the pancreatic cancer study as well as interim data from those ISTs, as well as getting -- looking forward to secondary endpoints from those studies. So winds up to be an exciting rest of this year and, of course, an exciting 2012 for the company.

Thank you again very much.

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Source: Peregrine Pharmaceuticals Inc. Presents at Lazard Capital Markets 8th Annual Healthcare Conference, Nov-15-2011 11:30 AM
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