Peregrine Pharmaceuticals, Inc. Q3 2008 Earning Call Transcript

Peregrine Pharmaceuticals, Inc. (NASDAQ:PPHM)

Q3 2008 Earnings Call

March 11, 2008 11:30 am ET

Executives

Barbara Lindheim – Director of Investor Relations

Steven King – President and Chief Executive Officer

Paul Lytle – Chief Financial Officer

Joseph Shan – Executive Director of Clinical and Regulator Affairs

Analysts

Navdeep Jaikaria – Rodman & Renshaw

Richard Feracusa - Merrill Lynch

Michael Jordan - Securities Counseling and Management

Roger Adams

(Michael Shiztwek)

Joe Griffith

Operator

Hello and welcome to the Peregrine Pharmaceuticals Third Quarter 2008 Financial Results Conference Call. All participants will be in a listen-only mode and there will be an opportunity for you to ask questions at the end of today's presentation. (Operator instructions). For information this conference is being recorded. At this time, I would like to turn the conference call over to Barbara Lindheim. Ms. Lindheim, you may begin the conference.

Barbara Lindheim – Director of Investor Relation

Good morning and thank you for joining us on today’s call with the management of Peregrine Pharmaceuticals. We’re here today with Peregrine’s President and Chief Executive Officer, Steven King, our Chief Financial Officer Paul Lytle and Executive Director of Clinical and Regulatory Affairs, Joseph Shan to discuss the company’s results for the third quarter of fiscal year 2008 reported this morning. Before I turn the call over to Steven, I would like to read the cautionary note regarding forward looking statements.

This conference call may include statements that are not historical facts and are considered forward looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements reflect Peregrine Pharmaceuticals current views about future events and financial performance. These forward looking statements are identified by the use of terms and phrases such as believes, expects, plans, anticipates, on target, and similar expressions identifying forward looking statements. These factors include, but are not limited to the risk factors detailed from time-to-time in Peregrine Pharmaceuticals filings with the Securities and Exchange Commission including but not limited to the annual report on Form 10-K for the year ended April 30th 2007.

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 Peregrine Pharmaceuticals ex-dictations, and Peregrine Pharmaceuticals expressly does not undertake any duty to update forward-looking statements whether as a result of new information future events or otherwise.

I'd like now to turn the call over to Steven King. Steven, you may begin.

Steven King – President and Chief Executive Officer

Thank you, Barbara. I'd like to start by thanking everyone who is participating in today's quarterly conference call. I will start with a brief recap of new developments since our last conference call. I will then go over the finical highlights for the quarter, and I will conclude with a more detailed review of our product development efforts, which will be followed by a question-and-answer session.

Since our last conference call in December we've achieved a number of significant advancements in product development. Specifically, we began patient treatment in Bavituximabs Phase II clinical trial, a trial designed to evaluate the efficacy of Bavituximab in combination with docetaxel in patients with advanced breast cancer. This trail was off and running at an excellent pace. Second, we received regulatory approval to start two additional Bavituximab’s Phase II clinical trail. One in combination with carboplatin and paclitaxel as lung cancer, and the other evaluating the same combination in patients with breast cancer. We believe that data from these Phase II studies should be a major value driver for Peregrine over the coming months.

During the quarter we were also able to raise awareness for our Bavituximab program and highlight promising clinical and pre-clinical data through presentations at Angio 2008, through our presentation at the Liver meeting, through our publication in Clinical Cancer Research, and just this morning we announced that data from our Cotara Brain Cancer had been accepted for presentation at ASCO this year.

While moving our product development efforts forward, we have also continued to make progress in growing revenues at our Cotara manufacturing subsidiary Avid Bioservices

As you can see, the past few months have been a productive time at Peregrine. Before going into more detail of these advancements, I would like to hand the conference call over to our CFO Paul Lytle for a finical summary. Paul?

Paul Lytle – Chief Financial Officer

Thank you Steven, thank you Barbara and thank you everyone for joining us. Early this morning we released our third quarter earnings. This earning release outlines the financial results in greater detail and includes finical tables. So I encourage everyone to read the entire release. We also plan to file our Form 10-Q later today, and both of these documents will be available on our website.

Now during the next few minutes, I will take you through our financial results for the third quarter of fiscal year 2008. I'll then briefly discuss our current finical position. And I'll conclude with a discussion of several other important topics.

Now let me begin with the finical results for the third quarter of fiscal year 2008 starting with revenues. Total revenues for the quarter ended January 31st 2008 were up 316% to $1.7 million compare to total revenues of $0.4 million reported in the same prior year period. This increase was mostly driven by increased revenues coming from third party customers of Avid Bioservices, our wholly owned contract manufacturing business.

As mentioned on previous calls, we anticipated record revenues from Avid in fiscal year 2008 and we are pleased to report that we have achieved that mark in the first nine months of this fiscal year.

As reported today, Avid revenues during the past nine months totaled $5.1 million, and this is in addition to the important manufacturing services Avid provides Peregrine in supporting our three ongoing clinical programs.

Now let me turn to the expenses. Total cost and expenses increased to $8.1 million for the current quarter. This compares to total cost and expenses of $5.6 million report in the same prior year quarter. This increase was primarily related to an expected increase in the cost of contract manufacturing directly related to the higher reported revenues from Avid in addition to an increase in research and development costs as we continue to advance our three clinical programs. Steven King will discuss our R&D progress in more detail later in the call.

In addition, we saw a modest increase in SG&A expenses in the current quarter of $334,000. This increase partly reflects our increased investment in business development, including the expansion of our business development team and our enhanced partnering efforts.

Now let me turn to the bottom line. For the third quarter of fiscal year 2008, Peregrine reported a net loss of approximately $6.2 million or $0.03 per basic and diluted share. This compares to a net loss of approximately $5 million or $0.03 per basic and diluted share in the same prior year period. The increase in our quarterly net loss was primarily related to our increase investments in research and development as previously discussed.

Now let me shift your attention to the balance sheet. We ended the quarter with approximately $20.1 million in cash and cash equivalent. This compares to $60 million in cash and cash equivalents reported at our fiscal year end April 30th 2007.

Now let me conclude with some additional important points. First, let me say that we are proactively taking steps to control our cost and to reduce our reliance on the equity markets. These steps include. First, we’re focusing our research and development investments towards our ongoing clinical programs that should enhance the partner ability of each program. To that end, we are proactively curtailing certain R&D efforts and reducing expenses that are not directly related to our three, four clinical program.

Second, we are growing the Avid business and revenues are increasing. As previously mentioned, Avid revenues for the nine-months ended January 2008 more than tripled to $5.1 million compared to $1.5 million generated in the same prior year period.

And third, we are pursuing opportunities that could monetize our rich asset base. This includes a number of proactive steps. First, as Avid continues to increase its revenues, the valuation of that business likewise increases. It’s important to note that while we are actively pursuing ways to monetize this asset, we are seeking to do so in a way that protects the manufacturing needs of both our clients and the needs of Peregrine. Monetizing our Avid asset is a high priority for the company and we have a number of people dedicated to the staff.

Next, we are continuing to meet with potential partners for clinical trial programs. Over the past two months our business development team has met with over 40 companies and essentially including every big Pharma company in the US, Europe and Japan. We continue to stay in touch with these companies and we provide them periodic update as we continue to achieve our clinical milestones. Our goal is to partner one of our clinical programs within the next 12 months. And as we have mentioned on previous calls, the valuation of any new drug candidate is greatly enhanced with positive Phase II data in-hand, and we are marching towards that goal.

As Steven will discuss in greater detail in a few minutes, we are currently enrolling patient in two separate Phase II Cancer Studies and two additional Phase II Cancer Studies should be underway next month. And to accomplish our partnering goals, we have expanded our business development team and we are optimistic their efforts will hopefully help us bring in attractive partners for our programs.

The next topic I would like to discuss pertains to our NASDAQ continued listing. As I stated on the last call in December, we were expecting to receive the additional 180 days compliance period from NASDAQ. And on January 23rd, 2008, we announced that have physically received that extension. We had that letter from NASDAQ, we now have until July 21, 2008 to regain compliance with the $1 minimum bid pricing rule.

And as we look to the future, let me assure you again that maintaining our NASDAQ listing is extremely important to us and shareholders, and we will continue to do everything in our power to maintain our NASDAQ listing.

I would like to thank you for your time. This concludes the discussion of the financial results. We’ll now continue to update everyone on the Company’s recent achievements and our major objectives for the upcoming months. Steven?

Steven King - President and Chief Executive Officer

Thank you, Paul. I would like to highlight recent advancements of our product pipeline and I’ll walk through each one of the programs in order.

Let me start by saying that we continue to believe that Phase II clinical data would be a primary evaluation driver for a Peregrine as we move forward. And as such, this is the area where we are concentrating our resources. We are continuing to pursue an aggressive clinical strategy with a potential to create significant value for our shareholders, while helping patients with life threatening diseases.

In particular, we view our oncology programs as our highest strategic priority. We achieved a number of major milestones this quarter for the Bavituximab cancer program. The first milestone was dosing the first patient in a Phase II trial evaluating Bavituximab in combination with docetaxel in advanced breast cancer patient. Since opening the initial flights for patient screening, the trial has progressed very nicely and we are well into the first set of 15 patients in the trial.

Just as a reminder, we will treat at the 15 patients initially and pending positive results, we will treat up to an additional 31 patients from the study. We anticipate data coming from this trial should be available before the middle of the year. It is worth noting that our positive experience with this trial also provides a useful model for other Phase II trials we will be starting shortly. We took care to invest the necessary time for the extensive planning, an on-site coordination needed to run a efficient trial, and we are now reaping the benefits to rapid patient screening and entering of the trial.

The second and third milestones for the Bavi program came almost simultaneously, when we received regulatory approval to begin two additional Phase II studies. These trials will both evaluate the combination of Bavituximab with carboplatin and paclitaxel in patients with advanced breast cancer or advanced lung cancer. Timing for these two trials is well underway and both trials are preparing to begin enrolling patients within the next month or so. Just as a reminder, these trials are also two stage designs with 15 and 21 patients in initial treatment group followed by groups of 31 and 28 patients respectively.

Taking together, we believe these trials should lead a significant clinical data and news flow throughout the rest of this year. And as have noted, Phase II clinical data can be an important driver for valuation creation in the investment community as an important validating event for partnering and other business development activities, as well as forbidding momentum in the medical community for its interest and support we’re actively engaging.

While we have been busy moving our Phase II studies forward, we have also continued to make progress in the Bavituximab Phase I cancer program. The addition of a new clinical site this quarter helped increased patients screening for the study. We are also able to highlight results form several Bavituximab clinical studies at the test annual international symposium on anti-angiogenic agent.

A presentation by one of our clinical investigators Dr. Alson Stopek highlighted the positive experience today with Bavituximab in clinical trials and helped raise additional awareness for the program. In addition to our progress during the quarter in advancing the clinical program, we also confirmed a critical element of Bavituximab specificity in a pre-clinical study published by Dr. Philip Thorpe and his colleagues in the Pere review journal Clinical Cancer Research. This study in a prostate cancer model confirmed that Bavituximab’s ability to target tumor blood vessels with excellent specificity. A high degree of selective targeting seen in the study provides additional evidence of Bavituximab’s therapeutic potential to achieve superior safety and efficacy in treating solid cancers.

Now, moving on to the Bavituximab Anti-Viral program. During the third quarter, the company continued to advance its Bavituximab HCV program. In November, we presented positive data from our Phase I repeat dose clinical study at the Liver Meeting in Boston. Also during the quarter, we added two additional sites to the ongoing HCV/HIV co-infection study, The Johns Hopkins Hospital and a private clinic in Orange County, California. We’re still very excited about this program and are motivated to move the trial forward. As soon as the Phase II cancer studies are all underway, we will be in a position to turn our attention again back to this trial to expedite the study.

In addition to the HCV clinical study, we have also continued supporting HIV influenza and biodefence research programs at Duke University, UT Southwestern, and other supporting institutions. These research collaborations have expanded and are extremely active. We look forward to presenting data through peer-reviewed journal article in the near future, that highlights the potential of our Anti-PS technology in this difficult to treat diseases. A real positive for this preclinical program is that they have significant support from outside grant. This has allowed us to remain very active in continuing the collaborations while focusing our internal resources on our clinical programs.

Now turning to the Cotara glioblastoma program. We had committed to providing an update on the status of Cotara clinical program this and we hope you saw the press release this morning. This update provides data from the first Cotara patient's in the ongoing dosimetry trial, as well as experienced today in an ongoing Phase II safety and efficacy trial. Highlights included that Cotara appears to be safe and well tolerated with no dose-limiting adverse events. The Phase II trial has reached 20% completion with regard to patient enrollment. As this typical and clinical trial, ramping up the studies and getting multiple sites actively involved is an important hurdle. We now have several sites that have enrolled patient's in the study, and we have completed expansion of the number of clinical sites participating in the study to eight. This is already less during the significant uptick in patient's screening, and we anticipate it will enhance enrollment rate as you move toward completion of the study later this year.

In addition, in view of the short expected survival time of approximately six months in the GBM patient population, we are encouraged by the fact that we have patients in this trial who have now survived past the six months timeframe. With one patient now out 15 months post treatment from the dosimetry study and the earliest treated patient in the phase II study now out 8 month. It is helpful to note that the primary criterion for success in these studies is survival. And, while these are early results from the studies, they provide us a with a good initial look in data from the trials that we can build upon in future updates as the trial and patient follow up continue.

Another positive development highlighted in the update is that data from the first Cotara patient and dosimetry trial has been accepted for presentation at 2008 ASCO annual meeting. This will provide us with an excellent opportunity to raise awareness for the program among the medical community at a very high profile conference. On the corporate side, during the quarter Peregrine continue to wrap up our proactive partnering activities. Our business development team has been very active in meeting with the wide variety of perspective partners. This includes potential partners for both our clinical program as well as our pre-clinical program. We anticipate that our continued progress in advancing our preclinical program and the expected upcoming appearance of peer-reviewed scientific publications will contribute heavily to continued progress in our partnering discussions. We remained active during the quarter and reaching out to the investment community, presenting at a major investor conference and meeting with institutional investors. We were also pleased that our analyst appears to be proactive in calling attention to our advancements. We anticipate continued active outreached investment community in the upcoming months.

With that, I would now like to open the floor to questions.

Question-and-Answer Session

Operator

(Operator instructions). And our first question comes from the Rodman & Renshaw Location. Please state your name followed by your question or comment.

Navdeep Jaikaria

Yeah, hi good morning. This is Navdeep Jaikaria.

Paul Lytle

Good morning Navdeep.

Navdeep Jaikaria

Hey Paul. A quick question, there are several but I guess, we will start with one and get in the queue. Regarding the Cotara studies, let’s start with the dosimetry trial. So you mentioned there were 3 patients that are currently enrolled one of them is out to 15 months, what about the other two patients?

Paul Lytle

Yes, obviously the patients from that first cohort really tended just to be an update on the first cohort because that’s the data that we’ll be presenting at ASCO.

Navdeep Jaikaria

Okay.

Paul Lytle

So the patients -- the last patient in that cohort is now out about 4 months after treatment.

Navdeep Jaikaria

Okay.

Paul Lytle

And then the longest patient is out, as you said about 15 months. And of course, we will be following those patient as we go out through the -- as followup continues over time here. And I will just say in the Phase II study that we are currently running in India, the first patient was treated approximately eight months ago. So that patient of course is the farthest out in that trial as far as follow-up. We do have patients that are obviously still out on follow-up in the trial and so, this is really for that trial primarily an enrollment update and also kind of set benchmark that we’ll now be able to update against those patients as they go forward for instance around time of ASCO.

Navdeep Jaikaria

That’s great and regarding, you know, you also mentioned in the press release that Cotara was concentrated in the brain tumor. It was there, how did you measure leakage? Was there any leakage from the brain tumor cavity into the blood or anything of the three patients that we saw -- in the three patients in the dosimetry study and how did you monitor the leakage et cetera?

Paul Lytle

Yeah. Actually on the call this morning we have our Executive Director of Clinical and Regulatory Affairs, Joe Shan. I will actually let him answer that question.

Joseph Shan

Hi Navdeep, how are you?

Navdeep Jaikaria

Hey Jose. Thanks.

Joseph Shan

So basically we measure that following some standards guidelines, there is a committee called MERD that publishes these guidelines, and it is a combination of liquid imaging as well as blood and urine radioactivity measurement over a period, almost 2 weeks. And so, it is a composite of all of those sort of measurement. And to answer your question directly now, we didn’t see any leakage outside of the brain, but of course, we can’t go into too much detail because we are under embargo for ASCO and the full details of each organ exposure all those rates will be presented at ASCO.

Navdeep Jaikaria

Great thank you I will get back in the queue.

Operator

Our next question comes from Richard Feracusa from Merrill Lynch. Please go ahead with your question.

Richard Feracusa

Steven and Paul congratulations on the overall progress. Regarding the breast cancer trail in Georgia, I just like a little clarification on that, little more color on how it’s going. And then you mentioned that, you’re well into treating the first group, and then you followed that later by saying we would have data on that trail in the middle of the year. Is that data on the whole trail, the complete trail, first group, second group, when we get to the second group, that’s basically essence of my question?

Paul Lytle

Well, the trial design is to treat the first 15 patients in the trial, evaluate tumor responses in the trail. And, also obviously safety parameters and other aspects of tumor response, then to – that’s really kind of almost become the go, no go for moving into these second set of patients which is 31 in that trail. So – and obviously our primary goal is to as quickly as possible get through the initial 15 patients, so we can make that evaluation. The trail design is such that the patient will receive tumor scans on about eight week time period. So we will evaluate patients really for the first time after treatment starting at about week eight.

Richard Feracusa

Okay. Then, when would make the decision to go the next group?

Steven King

That basically have some internal threshold to identify it, and so, really, essentially as soon as we reset threshold we could make the decision to go ahead and move into the additional 31 patients. So that won’t necessarily have to be a kind of the hard break period between the first 15 and then the second 31 patients, it could just flow into one continuous enrollment of patients. And again, that’s partly driven by how quickly you enroll the patients and then how quickly you reach that threshold.

Richard Feracusa

Well, do you have 15 enrolled?

Steven King

No, we don’t have 15 enrolls and obviously, I think probably we would provide an update, when we enroll the 15 patients at least we’ve met that milestone. So then people can better guide themselves on when at least at some point, we’ll know the data.

Richard Feracusa

So, and then you would update us I guess, when you start the second 31?

Steven King

Right. And certainly, as we feel like again we’ve met our threshold and we want to push another second set of patients.

Richard Feracusa

So, when you said the data in the middle of the year, you were talking about the complete trial?

Steven King

Well, I think the data coming through by that timeframe would be certainly to hopefully reach the go, no go point and than hopefully be of course on the go side.

Richard Feracusa

For the second group?

Steven King

For the first group. Now keep in mind you treat a patients in a day, week before you get this hand.

Richard Feracusa

Okay.

Steven King

So, yes we build on that eight week time period. So I think by the middle of the year, we should have enrolled that patient hopefully to be at that decision point.

Richard Feracusa

Okay. Thank you.

Steven King

And I am not trying to be ways on the answers here, but it does really rely on the types of tumor responses we’re seeing, as well as again, how quickly and how grouped the patients are and you are able to evaluate them.

Richard Feracusa

Okay. So, have evaluated any in their eighth week?

Steven King

The patients are again in various stages of follow-up so.

Richard Feracusa

Okay. Alright thank you.

Operator

Our next question comes from Michael Jordan from the Securities Counseling and Management. Please go ahead with your question.

Michael Jordan

Hello gentlemen. Steven, it’s nice to hear you talk about partnering in licensing and all the stuff, but the company over the years has announced licensing agreements. There was one with Merck AG; I think there was something with Schering, why don’t we ever hear about the deals you have signed?

Steven King

Those licensing agreements that are in place are really technology out licensing, not any of our major products that we’re not involved in the actual development of compounds that are included in those kind of technology licenses. So, although, we do receive periodic updates that effort is going into those programs. We don’t really receive any specifics on the stage of development. So we weren’t reliant on our partners to put out information. And I think we did have an update from the Merck Group on the TNT based compound that we licensed to them. But again, that has to come internally from the licensing partners it’s not something that we can initiate. And certainly our goal in the product licensing which is really our primary focus right now would be to remain much more actively involved in the program and of course be able to give much more detailed update on development post licensing.

Michael Jordan

And as a quick follow-up how much money does the company going to need to raise this year in order to avoid the growing concern statement by the auditors on your 10-K?

Steven King

Well, I think as Paul mentioned really our focus at this point is to reduce our reliance on the equity markets. There is a number of ways in which that can happen obviously, really being careful with the money we’re are spending, so trying to only spend it on the absolute value driving programs at this point. Secondly, to obviously continue to explore potential revenue raising around our Avid Bioservices contract manufacturing subsidiary. And the third would be through licensing partnerships and other types of collaborations that would bring direct cash into the company.

Michael Jordan

Okay. How much money is the company going to need to rise? That was a direct question; I haven’t heard a direct answer?

Paul Lytle

Yeah, I think Michael, we haven’t put out any numbers out there in terms of our projections or how much capital we are going to raise. It’s really going to hinge upon how successful we are with the efforts that Steven King just discussed in terms of really monetizing this Avid assets, bringing that two for wish and looking at partnering arrangements.

Michael Jordan

Okay. What is monetizing the Avid asset, I mean are you going to sell it?

Paul Lytle

I think that’s one of the opportunities that we are pursuing absolutely. And I think we are looking at, if we are successful in that and maybe takes us out of the equity markets entirely this year into next year. So, that’s a high priority for the company and we are heavily pursuing that, we have number of peoples dedicated to that task and we are moving forward with that.

Steven King

Yeah, and just to kind of restate, I mean our goal is to not to have to go back with the equity market especially during these tough market conditions and if we do, lets go back to the equity markets to really reduce the size of whatever money who would need to raise as well as possible.

Michael Jordan

Thank you.

Operator

And our next question comes from Navdeep Jaikaria from Rodman & Renshaw.

Navdeep Jaikaria

Hi, guys. Couple of questions, first is going back to again the 11 patients that are enrolled in Cotara the Phase I, Phase II studies. So just wanted to know, they are all alive and responding well to the treatment, is that a fair assumption?

Steven King

So far in the clinical studies, probably, we’re currently at -- 9 of those 11 patients that are still alive and follow up. So, again this is a very tough indication in which patients can progress very rapidly at any given time. And, one of the patient that did pass away was again passed expectedly in survival time in this patient population out about 10 months. So we are of course following up on monitoring each one of the patients. And again based on of those things, we’ll be able to give better update as time passes by here, because then you will get more and more patients out to the six month and hopefully beyond the six month time period, and we’ll have a better idea of how the drug is working.

Navdeep Jaikaria

Great. And the second question Paul for you, you talked about curtailing the burn from these current six million or so a quarter and Steven you talked about focusing on core program. So which development programs are you going to put on hold?

Paul Lytle

I think if you look at our preclinical programs Navdeep, we have our anti- angiogenesis program, which is basically at a partner able state right now. Our goal is to put that on hold internally, but actually to do some very proactive partnering discussion around that technology. We also have our base of permeation enhancement agents technology, which is also in preclinical development. We’re going to be spending fewer resources on that technology. And then we have our vascular targeting agent technology which also is in preclinical development. So we’re really curtailing those efforts, putting together partnering packages. So these programs are not just hitting on the shelf, but we’re going to be actively pursuing preclinical partnering arrangements for these types of programs.

Steven King

And I think just follow-up on that on the clinical side, though we are focuses on making sure that we are able to as rapidly as possible complete the Phase II studies for both Cotara and for Bavituximab. From the clinical side, we will put most of our resources in various and then push the other ongoing clinical studies as we have the resources available.

Michael Jordon

Great, Thank you.

Operator

Our next question comes from Roger Adams. Please go ahead with your question or comment.

Roger Adams

Thank you gentlemen for the good report this morning. My question concerns the CTL lawsuit it was good to see that judge Perk has granted the company’s motion for document production. Could you give us some indication of based on having that motion granted when you expect to receive Phase III clinical data from the lung patients treated in China that led to approval of TNT over there/

Steven King

It will be difficulty predict the exact timing of receiving any document. So far every set of the way I think, every efforts have been made to keep us from getting documents that we have requested. And really it’s an ongoing process; obviously, we feel that we’re in the right year that we should have access to that data as well as potential revenue stream from the commercialization technology in China. So, we’re continuing to pursue that rigorously, again I am unfortunate, it’s hard to make exact predictions on this court cases, because there is so many motions that take place on a daily basis.

Paul Lytle

And we are still on the discovery stage of the litigation that are still early in the process, even though we have had some successes in the trial there. It is still considered very early in the process.

Roger Adams

If you are successful in getting that produce, do you anticipate releasing it in the press release?

Steven King

I guess that’s an adequate question, I will have to get back to you after talking to our attorneys about it.

Roger Adams

Thank you.

Operator

Our next question comes from (Michael Shiztwek). Please go ahead with your question or comment.

Michael Shiztwek

Hi Paul, you stated that in your last presentation that the duke papers would be out by the end of this quarter and that would be within the next I believe 20 days, so are you still sticking to that time schedule?

Paul Lytle

Yeah I think at the BIO CEO presentation we talked about a number of preclinical publications that we are in the works, we meet one of those goals where still (Inaudible) presented data or post publish data in the clinical cancer research external I also talk about a antiviral publication coming from the Duke University Group and also from UT Southwestern. So, we have number of those publications that we believe are upcoming, and they are moving to the process and we are optimistic that they will be issued. In terms of the timing, I believe some of those publications will hopefully hit by end of this quarter. But its hard to determine the exact timing and when those will be accepted, and how long it takes to get those journals and publications reviewed still. We are still optimistic, but those publications will issue, it’s just the timing, it is a little uncertain right now, but if they are forthcoming.

Michael Shiztwek

Thank you.

Our next question comes from Richard Feracusa from Merrill Lynch.

Richard Feracusa

Yeah. Earlier you had mentioned that you’ve been in contact with 40 pharmaceutical companies over the complete range of size. How many of those, I don’t know if you can answer the question, but how many of those 40 would you say are serious rather than casual observers?

Steven King

Well, I mean, I think it is hard to predict, well I think you just had this sort of face-to-face interaction with the representative of the company, and we’re quite sure what’s happening on the internal side of things. What I can say is we have significant followup from really most of the companies we met with, where there is clearly a serious interest in the program. Some people want to be kind of in the loop and updated and it’s like looking something little bit different. Even publication such as the imaging papers that recently came out are very helpful for some of the potential partners who have questions about specificity for instance. Other (Inaudible) want to see a little more clinical data like some of the phase II data coming through. So, I mean, everyone we met with has at least some significant interest in the program or they wouldn’t agree to meet to begin with. Because at these conferences they have the options either need with you or need with you. And in particular, I know when we went to the Bio Asia conference, we had probably 7 or 8 meetings outside of the conference, we are actually able to visit the companies and spent really little more time with them discussing the programs in more detail.

Richard Feracusa

Okay, thank you.

Steven King

So, I mean, there is definitely lot of interest in it’s growing and, I think again as the data from the Phase II studies starts to come through and that’s we’re going to even pick the interest more.

Richard Feracusa

Thank you.

Operator

(Operator Instructions). Our next question comes from (Alan Finbad). Please go ahead with your question and comment.

Unidentified Analyst

Yes. Gentleman thank you very much for this most enlightening conference call. I have been a stockholder for over 10 years now. I would like to also congratulate you on focusing your areas of research that will bring us to provision in a shortest time frame here. I have two questions. Would you anticipate our burn rate to be per month over the next six months, and would you ever consider a reverse split to maintain a NASDAQ listing?

Paul Lytle

I will go ahead and answer the reverse stock split and – let me just say that our time and energy here that the company has not really been focused on a reverse stock split, because we don’t believe that’s a value adding idea. But what we have been focused on really the fundamentals of the company, meeting milestones, achieving clinical trial goals, because we believe this focus will add value and although, we cannot control the price of our stock. What we are focused on here are these events that could influence the stock price and ultimately bring us back into NASDAQ compliance. So that is really our goal from the reverse stock splits standpoint. I would like to also add a point here that if we do have to do a reverse stock split, it’s important to note that any of these changes in our capital structure would have to be pre-approved by shareholders. So everyone will have a decision and both in the decision of that reverse stock split if it ever happened. So, that’s just little added highlight on that question. In terms of the amount of capital that we will need or the amount of what our burn rate will be, we have now publicly stated what our anticipated burn rate will be. But historically it has been in the 5.1 for the first two quarters. This quarter now with nine-months ended it’s in the little higher than that about $5.4 million. So as we take moneys away from these plus three clinical programs. Our goal is to really put those effort and those money into generating data from theses Phase II studies. So we haven’t adjusted our burn rate going forward from that standpoint.

Unidentified Analyst

Okay, I appreciate your answers. Thank you

Operator

And our next question comes from Joe Griffith. Please go ahead with your question or comment.

Joe Griffith

Hi, guys. The last caller answered my question on reverse split. But to follow-up with that if were the partner or so Avid. What would you think that would reduce our burn rate to per quarter? Would we see a significant difference?

Paul Lytle

We haven’t publically stated that the standalone business unit of Avid is. But what we can say is that the value that Peregrine received from Avid is tremendous in the amount of manufacturing services received from Avid, it is tremendous. But we have not publically stated what the standalone burn rate of that entity is, so.

Steven King

I mean, I think to just follow up on that little bit. Again, I think through these efforts to really again focus our research dollars on the clinical program only on sort of curtail efforts and other pre-clinical type programs combined with the potential of the Avid business growing or in the case where we actually decide to monetize it, we're brining that cash. I mean, I think the overall net benefit we’re trying to get to is to again reduce our overall burn rate and allow us to hopefully not have to go back to the equity market at all at this point. And that’s our primary goal. So, I think there is lot of moving part there, but certainly our goal is to not have go back to equity markets. And again if we do have to, then it really makes it a small of a raise we possibly could do.

Joe Griffith

It would seem right now, if you want go back to the equity market, it would pretty much destroy the stock price, since we are sitting at $0.53 right now, just an observation.

Steven King

Right, I think that’s a good point and we are obviously…

Paul Lytle

And we're definitely in tune with that.

Steven King

In tune with that.

Joe Griffith

Okay. Thank you.

Operator

(Operator Instructions). And our next question comes from Roger Adams. Please go ahead with your question.

Roger Adams

Could you comment please on the NASDAQ extension appeal process after July 21? Am I correct that there is availability for an appeal that could stretch the time period out for a month or two during which you could achieve the $1 compliance number?

Paul Lytle

Yeah, its our understanding that after July 21st time point if you have not achieved that $1 minimum bid price for 10 consecutive trading days that you can appeal to the NASDAQ and that appeal generally takes about 30 days before you actually get a hearing date. And then, once you have the hearing dates you will propose your plan how to get back in compliance with the listing requirements. And then in general take another 30 days or so to get their final decision. So there is that appeal process, it does take approximately couple of months.

Roger Adams

And if you were to achieve the 10 days of compliance during that two months appeal process, would that bring you back into a good standing?

Paul Lytle

Hope you can comment yet on the appeal process because we have not gone down that path in the past. But I'm certain if we do get into compliance with our NASDAQ listing requirements that that would basically satisfy their needs.

Roger Adams

Well, one way to think so. Thank you very much.

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