Peregrine Pharmaceuticals, Inc. ( PPHM ) reported a net loss (excluding one time-items) of 5 cents per share in the second quarter of fiscal 2014 (ended Oct 31, 2013), in line with the Zacks Consensus Estimate. The second quarter loss was narrower than the year-ago loss of 6 cents. The narrower year-over-year loss was primarily due to higher revenues.
Second quarter fiscal 2014 revenues at Peregrine Pharma increased 19.8% to $7.4 million, above the Zacks Consensus Estimate of $5 million. The top-line growth was mainly due to the rise in contract manufacturing revenue.
Avid Bioservices, a Peregrine Pharma subsidiary, posted contract manufacturing revenues of $7 million during the quarter, up 21.3%. For fiscal 2014, Peregrine Pharma continues to expect contract manufacturing revenues in the range of $18−$22 million.
Peregrine Pharma's total costs and expenses increased 14.9% during the second quarter of fiscal 2014 to $15.2 million due to higher contract manufacturing, research and development (R&D) expenses and selling, general and administrative (SG&A) expenses. R&D expenses increased 14.9% to $7.0 million due to higher investment in pipeline and share-based compensation expense. SG&A expenses were up 16.7% to $4.0 million reflecting higher share-based compensation expense.
Peregrine Pharma's lead pipeline candidate, bavituximab, is being developed for multiple oncology indications including the treatment of second-line non-small cell lung cancer (NSCLC). Peregrine Pharma is on-track to initiate a phase III study, SUNRISE, on the candidate for this indication and expects to start enrolling patients by the end of calendar year 2013.
The randomized, double-blind, placebo-controlled, phase III trial (n=600) will be conducted across the world among stage IIIB/IV non-squamous NSCLC patients, whose disease progressed after standard front-line treatment, with the primary endpoint being overall survival. The study will compare bavituximab in combination with Sanofi 's ( SNY ) Taxotere (docetaxel) to Taxotere and placebo.
Apart from this, bavituximab is also being evaluated for HER2-negative metastatic breast cancer (phase I - final data expected in 2014), advanced hepatocellular carcinoma (phase I/II - interim data to be presented in the first quarter of 2014), treatment naïve stage IV NSCLC (phase Ib) and stage II/III rectal adenocarcinoma (phase I). Peregrine Pharma also plans to initiate a phase Ib study evaluating bavituximab for advanced melanoma in early 2014.
Better-than-expected revenues reported by Peregrine Pharma in the second quarter of fiscal 2014 coupled with pipeline advancement are encouraging. We expect investor focus to remain on updates pertaining to bavituximab. The successful development and commercialization of bavituximab would be a major positive for Peeregrine Pharma, which currently has no approved drug.
Peregrine Pharma, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biopharma space include Actelion Ltd. ( ALIOF ) and Jazz Pharmaceuticals ( JAZZ ). Both the stocks carry a Zacks Rank #1 (Strong Buy).