Peregrine Pharmaceuticals Reports Financial Results for Second Quarter of Fiscal Year 2017 and Recent Developments

On December 12, 2016 Peregrine Pharmaceuticals, Inc. (NASDAQ:PPHM) (NASDAQ:PPHMP), a biopharmaceutical company committed to improving patient lives by manufacturing high quality products for biotechnology and pharmaceutical companies and advancing its proprietary R&D pipeline, reported financial results for the second quarter of fiscal year (FY) 2017 ended October 31, 2016, and provided an update on its contract manufacturing business, clinical pipeline and other corporate developments (Press release, Peregrine Pharmaceuticals, DEC 12, 2016, View Source [SID1234517052]).

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Highlights Since July 31, 2016
"The Avid business is on track to continue its revenue growth this fiscal year as we move toward overall profitability within the next 18 months. Our two facilities have the potential to generate in excess of $80 million in revenue, leaving additional capacity for revenue growth beyond fiscal year 2017 revenue guidance," stated Steven W. King, president and chief executive officer of Peregrine. "We are moving forward with our plans to construct a third manufacturing facility, with an eye toward efficiencies that will reduce the overall cost of construction and operation. While this may delay the new facility launch until later in calendar year 2017, we currently have adequate existing capacity to continue meeting the needs of our current clients while also bringing in new customers so we do not expect it to impact our near-term ability to grow top-line revenue as originally planned. Independently, Avid is a successful and growing CDMO business generating significant revenue and one of our key goals going forward is to help ensure that its value is appropriately represented in the market cap of our overall business."
Mr. King continued, "During, and subsequent to, the second quarter, we announced a series of important findings, all of which will contribute to our future development of bavituximab. Our ongoing analysis of the Phase III SUNRISE data has revealed a promising biomarker that may give us insight into key patient populations. We are actively evaluating additional potential biomarkers and we hope to identify a profile for patients who will receive therapeutic benefit from treatment with bavituximab. Concurrent with our internal clinical work, our collaborators at NCCN are in the process of initiating trials for three new bavituximab combination treatments, which we expect to begin enrolling patients in the coming months. What is exciting is that the NCCN studies will help build on developments we are seeing from our internal scientists, as well as our collaborators at Duke, Rutgers and Memorial Sloan Kettering Cancer Center. Together, we presented compelling data supporting our long-standing belief that bavituximab significantly impacts the tumor microenvironment, creating a more immune active environment in which other therapies, including checkpoint inhibitors, are able to have a greater anti-tumor effect. These findings are highly validating and we look forward to continuing our work with these world-class institutions to help guide clinical development."
Avid Bioservices Highlights
"Growing top-line revenue is a key focus and we are pleased to report a 53% improvement in contract manufacturing revenue for the current six-month period compared to the same period last fiscal year. In addition, our revenue guidance for the second quarter was targeted to exceed $20 million and we achieved $23.4 million in contract manufacturing revenue as we worked closely with the third-party testing laboratory to resolve the unexpected delays in testing we encountered during the first quarter. As a result, we reaffirm our manufacturing revenue guidance of between $50 and $55 million for the full fiscal year," stated Paul Lytle, chief financial officer of Peregrine. "We also continued to advance the validation of three separate manufacturing processes related to third-party customer products that could lead to future commercial manufacturing for these products. While these activities generally have a higher cost of manufacturing, which impacted our gross margin during the second quarter, we believe our investment in these products will provide us future revenue opportunities once these products are approved."
The company reaffirms its manufacturing revenue guidance for the full FY 2017 of $50 – $55 million.

Avid’s current manufacturing revenue backlog is $73 million, representing estimated future manufacturing revenue to be recognized under committed contracts. This backlog mostly covers revenue to be recognized during the remainder of fiscal year 2017 and fiscal year 2018.
Clinical Development Highlights
Through the ongoing analysis of the Phase III SUNRISE data, Peregrine scientists identified a correlation between overall survival and pre-treatment levels of the biomarker, beta-2 glycoprotein-1 (β2GP1), which we presented at ESMO (Free ESMO Whitepaper) in October.

Data demonstrated that patients with pre-treatment β2GP1 levels between 200 and 240 µg/mL – representing approximately 30% of randomized patients – achieved a statistically significant, 5.5-month improvement, from 7.7 months to 13.2 months, in median overall survival as compared to patients in the control group with the same range of β2GP1 levels.

Peregrine’s research collaboration with NCCN is advancing as planned, with grants awarded to three investigators to support research of bavituximab in combination with other therapeutics for the following studies:

Phase I Trial of Sorafenib and Bavituximab Plus Stereotactic Body Radiation Therapy (SBRT) for Unresectable Hepatitis C Associated Hepatocellular Carcinoma

Phase I/II Clinical Trial of Bavituximab with Radiation and Temozolomide for Patients with Newly Diagnosed Glioblastoma

Phase II Study of Pembrolizumab and Bavituximab for Progressive Recurrent/Metastatic Squamous Cell Carcinoma of the Head and Neck
The company expects these trials to begin over the coming months.

Research Highlights
Peregrine scientists and collaborators from Duke University Medical Center, Rutgers University College of Medicine, and Memorial Sloan Kettering Cancer Center each presented compelling data demonstrating that shifts in the tumor microenvironment from immune suppressed to immune active occurred when a bavituximab equivalent antibody was administered as part of a combination treatment regimen. Presentations addressed multiple phosphatidylserine (PS)-targeting combinations, including those with checkpoint inhibitors such as anti-PD-1, anti-PD-L1 and anti-LAG3, as well as with radiation or chemotherapy. These data suggest that the addition of PS-targeting reverses an immunosuppressive tumor environment, creating an immune active tumor microenvironment that can potentially convert patients that generally do not respond to immuno-oncology (I-O) therapies into responders. Key presentations were made at the Second International Cancer Immunotherapy Conference (CIMT) (Free CIMT Whitepaper) in September, the American Association for Cancer Research (AACR) (Free AACR Whitepaper)’s Tumor Immunology and Immunotherapy Conference in October, the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) in November, and the San Antonio Breast Cancer Symposium in December.
Financial Highlights and Results
Peregrine continues to execute its previously-announced strategy to reach sustained profitability by increasing contract manufacturing revenue while decreasing research and development expenses, with the goal of reaching profitability 18 months from now. During the first six months of FY 2017, the company made significant progress toward this goal with contract manufacturing revenues increasing 53% compared to the first six months of FY 2016 and research and development expenses decreasing by 45% compared to the first six months of FY 2016.

Contract manufacturing revenue from Avid’s clinical and commercial biomanufacturing services provided to its third-party customers increased to $23,370,000 for the second quarter of FY 2017 compared to $9,523,000 for the second quarter of FY 2016. In addition, as previously-announced, a backlog at a third-party testing lab, unrelated to product quality, required that the recognition of some revenue be shifted from the first quarter to the second quarter of fiscal year 2017.

Total costs and expenses for the second quarter of FY 2017 were $27,447,000, compared to $23,347,000 for the second quarter of FY 2016. For the second quarter of FY 2017, research and development expenses decreased 51% to $7,022,000, compared to $14,190,000 for the second quarter of FY 2016. Cost of contract manufacturing increased to $15,441,000 in the second quarter of FY 2017 compared to $4,741,000 for the second quarter of FY 2016, primarily due to an increase in the cost of contract manufacturing associated with higher reported revenue. Also contributing to this increase and impacting gross margins for the period is the higher cost of operating the new Myford facility as well as the higher cost associated with performing process validation runs during the quarter. For the second quarter of FY 2017, selling, general and administrative expenses increased to $4,984,000 compared to $4,416,000 for the second quarter of FY 2016 primarily due to the company’s growing manufacturing business.

Peregrine’s consolidated net loss attributable to common stockholders was $5,498,000 or $0.02 per share, for the second quarter of FY 2017, compared to a net loss attributable to common stockholders of $14,578,000, or $0.07 per share, for the same prior year quarter.

Peregrine reported $49,055,000 in cash and cash equivalents as of October 31, 2016, compared to $61,412,000 at fiscal year ended April 30, 2016.
More detailed financial information and analysis may be found in Peregrine’s Quarterly Report on Form 10-Q, which will be filed with the Securities and Exchange Commission today.

NantKwest Announces Enhanced High-Affinity Activated Natural Killer (haNK) Cell Therapy in Preclinical Studies of HER2 Positive Breast Cancer at Presentation at the San Antonio Breast Cancer Symposium

On December 12, 2016 NantKwest Inc. (Nasdaq:NK), a pioneering, next generation, clinical-stage immunotherapy company focused on harnessing the unique power of our immune system using natural killer (NK) cells to treat cancer, infectious diseases and inflammatory diseases, reported that the company presented results from a preclinical study on the company’s high affinity Natural Killer (haNK) cell therapy program at the San Antonio Breast Cancer Symposium (SABCS) in San Antonio, TX, which was held on December 6-10, 2016 (Press release, NantKwest, DEC 12, 2016, http://ir.nantkwest.com/phoenix.zhtml?c=254059&p=RssLanding&cat=news&id=2229036 [SID1234517050]).

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Previous studies have shown that patients with HER2 positive breast cancer who have the high-affinity CD16 receptor that have been treated with Herceptin (trastuzumab) had better clinical outcomes versus those without the high affinity receptor. In this study, in a mouse xenograft model of HER2 positive breast cancer, to enhance the activity of aNK (activated natural killer) cell therapy aNK cells were engineered to express the CD16 high affinity Fc receptor (haNK cells). Study results reported provide further supporting evidence that antibody-dependent cellular cytotoxicity (ADCC) mediated cancer cell killing can be further enhanced through the recognition of the Fc fragment of a therapeutic antibody, in this case Herceptin, and the haNK cell’s CD16 Fc receptor.

"In over 50 patients in a broad range of cancer types, NantKwest’s aNK cell therapy has demonstrated promising indications of efficacy and an excellent safety record," said Patrick Soon-Shiong, MD, Chairman and CEO of NantKwest. "In this study, haNK cell therapy in combination with Herceptin was highly synergistic, resulting in tumor regression and significantly better efficacy in comparison to either agent alone. This data, highlighting the potential benefit of combining haNK cell therapy with Herceptin in patients with HER2-positive breast cancer, provides further supportive evidence and a solid foundation to fast track this program into human clinical trials."

Collaborating on the study were research scientists from NantBiosciences, NantCell and NantKwest.

Presentation Summary

High-affinity Activated Natural Killer (haNK) Cells Augment Trastuzumab Efficacy in a Mouse Model of HER2-positive Human Metastatic Breast Cancer
Abstract #P2-04-1-466
Presenter: Shahrooz Rabizadeh, PhD, NantBiosciences Inc., Culver City, CA
Thursday, December 8, 2016, 7:30 AM, Room Hall 1
This poster reviews the potential synergistic use of haNK cell therapy in combination with Herceptin (trastuzumab) in patients with HER2-positive breast cancer.

Kite Pharma Announces Publication of T-Cell Therapy Targeting Mutant KRAS in Cancer by the National Cancer Institute (NCI) in New England Journal of Medicine

On December 12, 2016 Kite Pharma, Inc. (Nasdaq:KITE) reported that characterizations of T cell receptor candidates which it has licensed under the Cooperative Research and Development Agreement (CRADA) with the National Institutes of Health (NIH) have been published in the December 8, 2016 New England Journal of Medicine (NEJM) (Press release, Kite Pharma, DEC 12, 2016, View Source [SID1234517047]).

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The research, led by Steven A. Rosenberg, M.D., Ph.D., chief of the Surgery Branch at NCI’s Center for Cancer Research, and a scientific collaborator with Kite, describes a patient with KRAS mutant metastatic colorectal cancer who was successfully treated with T cells that are reactive to KRAS G12D mutation. This work follows previously reported treatment of a patient with advanced cholangiocarcinoma with T cells targeting a mutated erbb2 interacting protein.

"We are very excited to see the results of this landmark study conducted by Dr. Rosenberg and his team at the NCI. These findings represent proof of concept that T-cell technology directed against neoantigens can be utilized to treat solid tumors," said David Chang, M.D., Ph.D., Executive Vice President, Research and Development, and Chief Medical Officer of Kite.

As published in the NEJM publication, mutations in the KRAS gene are thought to drive 95 percent of all pancreatic cancers and 45 percent of all colorectal cancers. The G12D mutation is the most common KRAS mutation and is estimated to occur in more than 50,000 new cases of cancer in the United States each year.

In September 2016, Kite announced that it had entered into an exclusive, worldwide license with NIH for intellectual property related to multiple TCR-based product candidates for the treatment of tumors expressing mutated KRAS antigens. These TCR product candidates were developed in the laboratories of Steven A. Rosenberg, M.D., Ph.D., and James C. Yang, M.D., of the NCI.

Prosigna Breast Cancer Assay Outperforms All Other Commercial Assays Tested in Updated Analysis of TransATAC Study Presented at the 39th Annual CTRC-AACR San Antonio Breast Cancer Symposium

On December 12, 2016 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported study findings relating to the prognostic value of the PAM50-based Prosigna Breast Cancer Gene Signature Assay in treating breast cancer that were presented at the 2016 CTRC-AACR San Antonio Breast Cancer Symposium (SABCS) (Press release, NanoString Technologies, DEC 12, 2016, View Source [SID1234517041]). Investigators retrospectively evaluated and compared the performance of four multigene expression profiles to predict the risk of Distant Recurrence (DR) in the same large dataset of more than 800 patients from the TransATAC study. These signatures included Prosigna, Oncotype DX, EndoPredict and Breast Cancer IndexSM.

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For post-menopausal women with node-negative, hormone receptor-positive, HER2-negative early stage breast cancer, the study found that Prosigna provided the most accurate prognostic information of all four multigene expression profiles tested as measured by the statistical measure known as the likelihood ratio. The study further found that Prosigna also provided the most accurate differentiation between low and high risk patients as compared to the other genomic tests. Low-risk women as identified by Prosigna had a 3% risk of DR over 10 years, the lowest rates of DR for all genomic tests that were studied. In contrast, high-risk women as identified by Prosigna had on average a 33% chance of distant recurrence by 10 years.

These results support the conclusions of the 2016 evidence-based ASCO (Free ASCO Whitepaper) guidelines that multi-gene expression signatures provide clinical utility for selection of low risk patients who may be spared adjuvant chemotherapy based upon their outcomes when treated with hormone therapy alone. Those guidelines gave a strong recommendation for Prosigna, equivalent to the recommendation given for Oncotype Dx and stronger than other tests evaluated by the guideline committee.

Additional results from the study demonstrated the potential clinical utility of Prosigna for informing the duration of endocrine therapy by accurately assessing the risk of a patient’s cancer recurring between five and 10 years after diagnosis. In node-negative patients, Prosigna provided the most prognostic information between 5 and 10 years after diagnosis as measured by the likelihood ratio. Low-risk women as identified by Prosigna had a 1.4% risk between years 5 and 10, the lowest rates of DR for all genomic tests that were studied.

"This important data demonstrates the ability of Prosigna to identify a low risk group of women for whom adjuvant chemotherapy following surgery and extended endocrine therapy in years 5-10 following diagnosis may be of limited benefit," said Dr. Aleix Prat, MD, Ph.D., from Hospital Clinic in Barcelona, Spain, who was not an investigator on the study.

"These results further validate the clinical utility of Prosigna as a superior second generation breast cancer assay that provides oncologists and patients the critical information they need to make informed decisions about their treatment options," stated Brad Gray, president and chief executive officer of NanoString Technologies.

Results of the TransATAC analysis were presented on Friday December 9th by Ivana Sestak Ph.D. in SABCS abstract S6-05, titled Comprehensive comparison of prognostic signatures for breast cancer in TransATAC. Prosigna’s performance as part of the TransATAC study has been previously published in the Journal of Clinical Oncology (View Source) and the Journal of the National Cancer Institute (View Source).

About the Prosigna Breast Cancer Prognostic Gene Signature Assay and nCounter Dx Analysis System
The Prosigna Assay provides a risk category and numerical score for assessment of the risk of distant recurrence of disease at 10 years in postmenopausal women with node-negative (Stage I or II) or node-positive (Stage II), hormone receptor-positive (HR+) breast cancer. Based on the PAM50 gene signature initially discovered by Charles Perou, Ph.D. and colleagues, the Prosigna Assay is an in vitro diagnostic tool that utilizes gene expression data weighted together with clinical variables to generate a risk category and numerical score to assess a patient’s risk of distant recurrence of disease. The Prosigna Assay measures gene expression levels of RNA extracted from formalin-fixed paraffin embedded (FFPE) breast tumor tissue previously diagnosed as invasive breast carcinoma.

The Prosigna Assay requires minimal hands-on time and runs on NanoString’s proprietary nCounter Dx Analysis System, which offers a reproducible and cost-effective way to profile many genes simultaneously with high sensitivity and precision.

The nCounter Dx Analysis System is a highly automated and easy-to-use platform that utilizes a novel digital barcoding chemistry to deliver high precision multiplexed assays. The system is available in the multi-mode FLEX configuration, which is designed to meet the needs of high-complexity clinical laboratories seeking a single platform with the flexibility to run the Prosigna Breast Cancer Assay and, when operated in the "Life Sciences" mode, process translational research experiments and multiplexed assays developed by the laboratory.

In the United States, the Prosigna Assay is 510(k) cleared for use on the nCounter Dx Analysis System, and is available for diagnostic use when ordered by a physician. The Prosigna Assay has been CE-marked and is available for use by healthcare professionals in the European Union and other countries that recognize the CE Mark, as well as Canada, Israel, Australia, New Zealand, Argentina, Thailand, South Africa, Turkey and Hong Kong. In the U.S., the Prosigna Assay is indicated in female breast cancer patients who have undergone surgery in conjunction with locoregional treatment consistent with standard of care, either as:

(1) a prognostic indicator for distant recurrence-free survival at 10 years in postmenopausal women with Hormone Receptor-Positive (HR+), lymph node-negative, Stage I or II breast cancer to be treated with adjuvant endocrine therapy alone, when used in conjunction with other clinicopathological factors or (2) a prognostic indicator for distant recurrence-free survival at 10 years in postmenopausal women with Hormone Receptor-Positive (HR+), lymph node-positive (1-3 nodes), Stage II breast cancer to be treated with adjuvant endocrine therapy alone, when used in conjunction with other clinicopathological factors. The device is not intended for patients with four or more positive nodes.

Other uses of Prosigna or the PAM50 panel in studies as described in this press release are for Investigational Use Only, or Research Use Only.

Loxo Oncology to Present Updated LOXO-101 Adult Phase 1 Data at the European Society for Medical Oncology (ESMO) Asia Congress

On December 12, 2016 Loxo Oncology, Inc. (Nasdaq:LOXO), a biopharmaceutical company innovating the development of highly selective medicines for patients with genetically defined cancers, reported that the abstract titled "Clinical safety and activity from a phase 1 study of LOXO-101, a selective TRKA/B/C inhibitor, in solid-tumor patients with NTRK gene fusions" has been accepted for oral presentation at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Asia Congress, taking place December 16-19, 2016 in Singapore (Press release, Loxo Oncology, DEC 12, 2016, View Source [SID1234517040]). Data from this trial were last presented at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April 2016. The presentation will include an efficacy and durability update for enrolled patients with TRK fusions.

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The schedule for the presentation is as follows:

Presentation Session Date & Time: December 18, 2016, 4:30 p.m. to 6:00 p.m. SGT
Title: Clinical safety and activity from a phase 1 study of LOXO-101, a selective
TRKA/B/C inhibitor, in solid-tumor patients with NTRK gene fusions
Abstract Number: 150O
Session: Developmental Therapeutics, Proffered Paper Session (oral presentation)
Presenter: Todd Bauer, M.D., Associate Director, Drug Development; Principal Investigator, Sarah Cannon Research Institute