Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Oct. 31, 2015 | Dec. 09, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | PEREGRINE PHARMACEUTICALS INC | |
Entity Central Index Key | 704,562 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --04-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 229,701,808 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Oct. 31, 2015 | Apr. 30, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 72,005,000 | $ 68,001,000 |
Trade and other receivables, net | 2,904,000 | 3,813,000 |
Inventories | 12,554,000 | 7,354,000 |
Prepaid expenses and other current assets, net | 1,995,000 | 1,355,000 |
Total current assets | 89,458,000 | 80,523,000 |
Property and equipment, net | 21,764,000 | 15,124,000 |
Other assets | 1,435,000 | 1,817,000 |
TOTAL ASSETS | 112,657,000 | 97,464,000 |
CURRENT LIABILITIES: | ||
Accounts payable | 6,901,000 | 10,385,000 |
Accrued clinical trial and related fees | 6,138,000 | 3,910,000 |
Accrued payroll and related costs | 4,130,000 | 4,606,000 |
Deferred revenue | 9,688,000 | 6,630,000 |
Customer deposits | 14,935,000 | 11,363,000 |
Other current liabilities | 667,000 | 437,000 |
Total current liabilities | 42,459,000 | 37,331,000 |
Deferred rent, less current portion | $ 972,000 | $ 1,098,000 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock - $0.001 par value; authorized 5,000,000 shares; issued and outstanding - 1,577,440 and 1,574,764, respectively | $ 2,000 | $ 2,000 |
Common stock-$0.001 par value; authorized 500,000,000 shares; issued and outstanding - 225,824,551 and 193,346,627, respectively | 226,000 | 193,000 |
Additional paid-in-capital | 549,543,000 | 512,464,000 |
Accumulated deficit | (480,545,000) | (453,624,000) |
Total stockholders' equity | 69,226,000 | 59,035,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 112,657,000 | $ 97,464,000 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Oct. 31, 2015 | Apr. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 1,577,440 | 1,574,764 |
Preferred stock, shares outstanding | 1,577,440 | 1,574,764 |
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 325,000,000 |
Common stock, shares issued | 225,824,551 | 193,346,627 |
Common stock, shares outstanding | 225,824,551 | 193,346,627 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
REVENUES: | ||||
Contract manufacturing revenue | $ 9,523,000 | $ 6,263,000 | $ 18,902,000 | $ 11,759,000 |
License revenue | 0 | 37,000 | 292,000 | 37,000 |
Total revenues | 9,523,000 | 6,300,000 | 19,194,000 | 11,796,000 |
COSTS AND EXPENSES: | ||||
Cost of contract manufacturing | 4,741,000 | 4,139,000 | 9,349,000 | 7,722,000 |
Research and development | 14,190,000 | 10,003,000 | 28,108,000 | 20,204,000 |
Selling, general and administrative | 4,416,000 | 4,295,000 | 9,315,000 | 9,178,000 |
Total costs and expenses | 23,347,000 | 18,437,000 | 46,772,000 | 37,104,000 |
LOSS FROM OPERATIONS | (13,824,000) | (12,137,000) | (27,578,000) | (25,308,000) |
Interest and other income | 626,000 | 37,000 | 657,000 | 79,000 |
NET LOSS | (13,198,000) | (12,100,000) | (26,921,000) | (25,229,000) |
COMPREHENSIVE LOSS | (13,198,000) | (12,100,000) | (26,921,000) | (25,229,000) |
Series E preferred stock accumulated dividends | (1,380,000) | (1,031,000) | (2,413,000) | (1,802,000) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (14,578,000) | $ (13,131,000) | $ (29,334,000) | $ (27,031,000) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and Diluted | 203,942,411 | 179,962,275 | 200,629,892 | 179,540,265 |
BASIC AND DILUTED LOSS PER COMMON SHARE | $ (.07) | $ (.07) | $ (.15) | $ (.15) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (26,921,000) | $ (25,229,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 2,457,000 | 3,664,000 |
Depreciation and amortization | 457,000 | 542,000 |
Changes in operating assets and liabilities: | ||
Trade and other receivables, net | 909,000 | (2,029,000) |
Inventories | (5,200,000) | 151,000 |
Prepaid expenses and other current assets, net | (640,000) | 230,000 |
Other non-current assets | (177,000) | (15,000) |
Accounts payable | (5,947,000) | 484,000 |
Accrued clinical trial and related fees | 2,228,000 | (1,896,000) |
Accrued payroll and related expenses | (476,000) | (365,000) |
Deferred revenue | 3,058,000 | (1,921,000) |
Customer deposits | 3,572,000 | 1,789,000 |
Other accrued expenses and current liabilities | 230,000 | 79,000 |
Deferred rent | (126,000) | 361,000 |
Net cash used in operating activities | (26,576,000) | (24,155,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Property and equipment acquisitions | (4,534,000) | (2,571,000) |
Decrease in other assets | 459,000 | 1,041,000 |
Net cash used in investing activities | (4,075,000) | (1,530,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock, net of issuance costs of $444,000 and $113,000, respectively | 36,198,000 | 4,213,000 |
Proceeds from issuance of Series E preferred stock, net of issuance costs of $1,000 and $552,000, respectively | 59,000 | 9,518,000 |
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 334,000 | 307,000 |
Proceeds from exercise of stock options, net of issuance costs of nil and $3,000, respectively | 132,000 | 149,000 |
Dividends paid on preferred stock | (2,068,000) | (1,544,000) |
Principal payments on capital leases | 0 | (9,000) |
Net cash provided by financing activities | 34,655,000 | 12,634,000 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 4,004,000 | (13,051,000) |
CASH AND CASH EQUIVALENTS, beginning of period | 68,001,000 | 77,490,000 |
CASH AND CASH EQUIVALENTS, end of period | 72,005,000 | 64,439,000 |
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accounts payable and other liabilities for purchase of property and equipment | 2,463,000 | 922,000 |
Lease incentives | $ 0 | $ 370,000 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | 6 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Common Stock | ||
Stock Issuance costs | $ 444,000 | $ 113,000 |
Series E Preferred Stock [Member] | ||
Stock Issuance costs | 1,000 | 552,000 |
Stock Options | ||
Stock Issuance costs | $ 0 | $ 3,000 |
1. ORGANIZATION AND BUSINESS DE
1. ORGANIZATION AND BUSINESS DESCRIPTION | 6 Months Ended |
Oct. 31, 2015 | |
Organization And Business Description | |
1. ORGANIZATION AND BUSINESS DESCRIPTION | We are a biopharmaceutical company focused on developing novel investigational products that help utilize the bodys own immune system to fight cancer, also known as immunotherapy. Our lead immunotherapy candidate, bavituximab, is in Phase III development for the treatment of previously-treated non-small cell lung cancer (the Phase III SUNRISE trial) along with several planned Company-sponsored trials and ongoing investigator-sponsored trials evaluating other treatment combinations and additional oncology indications. In addition to our product development efforts, we operate a wholly-owned biomanufacturing subsidiary, Avid Bioservices, Inc. (Avid), a contract manufacturing organization that provides fully integrated current Good Manufacturing Practices (cGMP) services from cell line development to commercial cGMP biomanufacturing for its third-party customers while also supporting the clinical and potential commercial drug supply of bavituximab. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) and with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) related to quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended April 30, 2015. The condensed consolidated balance sheet at April 30, 2015, has been derived from audited financial statements at that date. The unaudited financial information for the interim periods presented herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operations for the periods presented, with such adjustments consisting only of normal recurring adjustments. Results of operations for interim periods covered by this quarterly report on Form 10-Q may not necessarily be indicative of results of operations for the full fiscal year or any other interim period. The unaudited condensed consolidated financial statements include the accounts of Peregrine and Avid. All intercompany accounts and transactions among the consolidated entities have been eliminated in the unaudited condensed consolidated financial statements. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts, as well as disclosures of commitments and contingencies in the financial statements and accompanying notes. Actual results could differ materially from those estimates. In addition, our accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should it be determined that we are unable to continue as a going concern. Liquidity and Financial Condition At October 31, 2015, we had $72,005,000 in cash and cash equivalents. We have expended substantial funds on the research and development of our product candidates, and funding the operations of Avid. As a result, we have historically experienced negative cash flows from operations since our inception and we expect negative cash flows from operations to continue in the foreseeable future. Therefore, unless and until we are able to generate sufficient revenue from Avids contract manufacturing services or from the sale or licensing of our product candidates under development, we expect such losses to continue in the foreseeable future. Our ability to continue to fund our clinical trials and development efforts is highly dependent on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to support our future operations through one or more methods, including but not limited to, (i) raising additional capital in the equity markets, (ii) licensing or partnering our product candidates in development, or (iii) generating additional revenue from Avid. Historically, we have funded a significant portion of our operations through the issuance of equity. During the six months ended October 31, 2015, we raised $36,642,000 in aggregate gross proceeds from the sale of shares of our common stock (Note 6). Subsequent to October 31, 2015 and through December 10, 2015, we raised an additional $4,632,000 in aggregate gross proceeds from the sale of shares of our common stock (Note 12). As of December 10, 2015, $119,213,000 remained available to us under our two effective shelf registration statements, which allows us from time to time to offer and sell shares of our common stock or preferred stock, in one or more offerings, either individually or in combination. Our ability to raise additional capital in the equity markets to fund our obligations in future periods is dependent on a number of factors, including, but not limited to, the market demand for our common stock or 10.5% Series E Convertible Preferred Stock (the Series E Preferred Stock). The market demand or liquidity of our common stock or Series E Preferred Stock is subject to a number of risks and uncertainties, including but not limited to, negative economic conditions, adverse market conditions, adverse clinical trial results and significant delays in one or more clinical trials. If we are unable to either (i) raise sufficient capital in the equity markets, (ii) license or partner our products in development, or (iii) generate additional revenue from Avid, or any combination thereof, we may need to delay, scale back, or eliminate some or all our research and development efforts, delay the commercial launch of bavituximab, if approved, or restructure our operations. In addition, even if we are able to raise additional capital, it may not be at a price or on terms that are favorable to us. Cash and Cash Equivalents We consider all highly liquid, short-term investments with an initial maturity of three months or less to be cash equivalents. Concentrations of Credit Risk and Customer Base Financial instruments that potentially subject us to a significant concentration of credit risk consist of cash and cash equivalents and trade receivables. We maintain our cash balances primarily with one major commercial bank and our deposits held with the bank exceed the amount of government insurance limits provided on our deposits. We are exposed to credit risk in the event of default by the major commercial bank holding our cash balances to the extent of the cash amount recorded on the accompanying unaudited condensed consolidated balance sheet. Our trade receivables from amounts billed for contract manufacturing services provided by Avid have historically been derived from a small customer base. Most contracts require up-front payments and installment payments during the service period. We perform periodic evaluations of the financial condition of our customers and generally do not require collateral, but we can terminate any contract if a material default occurs. Approximately 94% of our trade receivable balance as of October 31, 2015 (Note 3), represents amounts due from three customers. In addition, contract manufacturing revenue generated by Avid has historically been derived from a small customer base (Note 9). These customers typically do not enter into long-term contracts because their need for drug supply depends on a variety of factors, including the drugs stage of development, their financial resources, and, with respect to commercial drugs, demand for the drug in the market. Our future results of operations could be adversely affected if revenue from any one of our primary customers is significantly reduced or eliminated Revenue Recognition We currently derive revenue from two sources: (i) contract manufacturing services provided by Avid, and (ii) licensing revenue related to agreements associated with Peregrines technologies under development. We recognize revenue in accordance with the authoritative guidance for revenue recognition. We recognize revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery (or passage of title) has occurred or services have been rendered, (iii) the sellers price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. We also comply with the authoritative guidance for revenue recognition regarding arrangements with multiple deliverables. Contract Manufacturing Revenue Revenue associated with contract manufacturing services provided by Avid is recognized once the service has been rendered and/or upon shipment (or passage of title) of the product to the customer. On occasion, we recognize revenue on a bill-and-hold basis in accordance with the authoritative guidance. Under bill-and-hold arrangements, revenue is recognized once the product is complete and ready for shipment, title and risk of loss has passed to the customer, management receives a written request from the customer for bill-and-hold treatment, the product is segregated from other inventory, and no further performance obligations exist. In addition, we also follow the authoritative guidance when reporting revenue as gross when we act as a principal versus reporting revenue as net when we act as an agent. For transactions in which we act as a principal, have discretion to choose suppliers, bear credit and inventory risk and perform a substantive part of the services, revenue is recorded at the gross amount billed to a customer and costs associated with these reimbursements are reflected as a component of cost of sales for contract manufacturing services. Any amounts received prior to satisfying our revenue recognition criteria are recorded as deferred revenue in the accompanying unaudited condensed consolidated financial statements. We also record a provision for estimated contract losses, if any, in the period in which they are determined. License Revenue Revenue associated with licensing agreements primarily consists of non-refundable upfront license fees, non-refundable annual license fees and milestone payments. Non-refundable upfront license fees received under license agreements, whereby continued performance or future obligations are considered inconsequential to the relevant license technology, are recognized as revenue upon delivery of the technology. If a licensing agreement has multiple elements, we analyze each element of our licensing agreements and consider a variety of factors in determining the appropriate method of revenue recognition of each element. Multiple Element Arrangements. In addition, under certain circumstances, when there is objective and reliable evidence of the fair value of the undelivered items in an arrangement, but no such evidence for the delivered items, we utilize the residual method to allocate the consideration received under the arrangement. Under the residual method, the amount of consideration allocated to delivered items equals the total arrangement consideration less the aggregate fair value of the undelivered items, and revenue is recognized upon delivery of the undelivered items based on the relative fair value of the undelivered items. For licensing agreements or material modifications of existing licensing agreements entered into after May 1, 2011, we follow the provisions of ASU No. 2009-13. If a licensing agreement includes multiple elements, we identify which deliverables represent separate units of accounting, and then determine how the arrangement consideration should be allocated among the separate units of accounting, which may require the use of significant judgment. If a licensing agreement includes multiple elements, a delivered item is considered a separate unit of accounting if both of the following criteria are met: 1. The delivered item has value to the licensing partner on a standalone basis based on the consideration of the relevant facts and circumstances for each agreement; and 2. If the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in our control. Arrangement consideration is allocated at the inception of the agreement to all identified units of accounting based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence (VSOE) of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists, we use our best estimate of the selling price for the deliverable. The amount of allocable arrangement consideration is limited to amounts that are fixed or determinable. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. Changes in the allocation of the sales price between delivered and undelivered elements can impact revenue recognition but do not change the total revenue recognized under any agreement. Milestone Payments. 1. The consideration is commensurate with either the entitys performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entitys performance to achieve the milestone; 2. The consideration relates solely to past performance; and 3. The consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. A milestone is defined as an event (i) that can only be achieved based in whole or in part on either the entitys performance or on the occurrence of a specific outcome resulting from the entitys performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and (iii) that would result in additional payments being due to us. The provisions of ASU No. 2010-17 do not apply to contingent consideration for which payment is either contingent solely upon the passage of time or the result of a counterpartys performance. We will assess the nature of, and appropriate accounting for, these payments on a case-by-case basis in accordance with the applicable authoritative guidance for revenue recognition. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue in the accompanying unaudited condensed consolidated financial statements. Fair Value Measurements We determine fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures for all assets and liabilities within the scope of this guidance. This guidance, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance prioritizes the inputs used in measuring fair value into the following hierarchy: · Level 1 Observable inputs, such as quoted prices in active markets for identical assets or liabilities. · Level 2 Observable inputs other than quoted prices included in Level 1, such as assets or liabilities whose values are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. · Level 3 Unobservable inputs that are supported by little or no market activity and that are considered significant to the overall fair value measurement of the assets or liabilities; therefore, requiring the company to develop its own valuation techniques and assumptions. As of October 31, 2015 and April 30, 2015, we do not have any Level 2 or Level 3 financial assets or liabilities and our cash and cash equivalents, which are primarily invested in money market funds with one major commercial bank, are carried at fair value based on quoted market prices for identical securities (Level 1 input). Customer Deposits Customer deposits primarily represent advance billings and/or payments received from Avids third-party customers prior to the initiation of contract manufacturing services. Research and Development Expenses Research and development expenses primarily include (i) payroll and related costs, including share-based compensation associated with research and development personnel, (ii) costs related to clinical trials and preclinical testing of our technologies under development, (iii) costs to develop and manufacture the product candidates, including raw materials and supplies, product testing, depreciation, and facility related expenses, (iv) expenses for research services provided by universities and contract laboratories, including sponsored research funding, and (v) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to our research and development efforts and have no alternative future uses. Clinical trial costs are a significant component of our research and development expenses. We have a history of contracting with third parties that perform various clinical trial activities on our behalf in the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. Expenses related to clinical trials are accrued based on our estimates and/or representations from third parties (including clinical research organizations) regarding services performed. If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we modify our accruals accordingly on a prospective basis. Revisions in the scope of a contract are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. There were no material adjustments for a change in estimate to research and development expenses in the accompanying unaudited condensed consolidated financial statements for the three and six months ended October 31, 2015 and 2014. Under certain research and development agreements, we are obligated to make certain advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities and are deferred and capitalized as prepaid research and development expenses. These advance payments are recognized as an expense in the period the related goods are delivered or the related services are performed. We assess our prepaid research and development expenses for impairment when events or changes in circumstances indicate that the carrying amount of the prepaid expense may not be recoverable or provide future economic benefit. In addition, under certain in-licensing agreements associated with the research and development of our product candidates, we are obligated to pay certain milestone payments based on potential clinical development and regulatory milestones. These milestone payments have no alternative future uses (in other research and development projects or otherwise) and therefore have no separate economic values and are expensed as research and development costs at the time the costs are incurred. We have no in-licensed product candidates that have alternative future uses in research and development projects or otherwise. Share-based Compensation We account for stock options and other share-based awards granted under our equity compensation plans in accordance with the authoritative guidance for share-based compensation. The estimated fair value of share-based payments to employees in exchange for services is measured at the grant date, using a fair value based method, such as a Black-Scholes option valuation model, and is recognized as expense on a straight-line basis over the requisite service periods. The fair value of modifications to share-based awards, if any, is generally estimated using a Black-Scholes option valuation model, unless a lattice model is required. Share-based compensation expense recognized during the period is based on the value of the portion of the share-based payment that is ultimately expected to vest during the period. In addition, as of October 31, 2015, there were no outstanding share-based awards with market or performance conditions. Periodically, we grant stock options and other share-based awards to non-employee consultants, which we account for in accordance with the authoritative guidance for share-based compensation. The cost of non-employee services received in exchange for share-based awards are measured based on either the fair value of the consideration received or the fair value of the share-based award issued, whichever is more reliably measurable. In addition, guidance requires share-based compensation related to unvested options and awards issued to non-employees to be remeasured at the end of each reporting period based upon the fair market value on that date until the share-based award has vested, and any cumulative catch-up adjustment to share-based compensation resulting from the re-measurement is recognized in the current period (Note 7). Basic and Dilutive Net Loss Per Common Share Basic net loss per common share is computed by dividing our net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period excluding the dilutive effects of stock options, shares of common stock expected to be issued under our 2010 Employee Stock Purchase Plan (the ESPP), warrants, and Series E Preferred Stock outstanding during the period. Diluted net loss per common share is computed by dividing our net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding during the period plus the potential dilutive effects of stock options, shares of common stock expected to be issued under our ESPP, warrants, and Series E Preferred Stock outstanding during the period. Net loss attributable to common stockholders represents our net loss plus Series E Preferred Stock accumulated dividends. Series E Preferred Stock accumulated dividends include dividends declared for the period (regardless of whether or not the dividends have been paid) and dividends accumulated for the period (regardless of whether or not the dividends have been declared). The potential dilutive effect of stock options, shares of common stock expected to be issued under our ESPP, and warrants outstanding during the period was calculated in accordance with the treasury stock method, but are excluded if their effect is anti-dilutive. The potential dilutive effect of Series E Preferred Stock outstanding during the period was calculated using the if-converted method assuming the conversion of Series E Preferred Stock as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive. However, because the impact of stock options, shares of common stock expected to be issued under our ESPP, warrants, and Series E Preferred Stock are anti-dilutive during periods of net loss, there was no difference between basic and diluted loss per common share amounts for the three and six months ended October 31, 2015 and 2014. The calculation of weighted average diluted shares outstanding for the three and six-month periods ended October 31, 2014 and 2015 excludes the dilutive effect of the following weighted average outstanding stock options and shares of common stock expected to be issued under our employee stock purchase plan as their impact are anti-dilutive during periods of net loss: Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Stock Options 1,958,583 3,792,774 2,340,300 4,449,657 ESPP 40,581 16,916 40,519 18,701 Total 1,999,164 3,809,690 2,380,819 4,468,358 The calculation of weighted average diluted shares outstanding for the three and six-month periods ended October 31, 2014 and 2015 also excludes the following weighted average outstanding stock options, warrants, and Series E Preferred Stock (assuming the if-converted method), as their exercise prices or conversion price were greater than the average market price of our common stock during the respective periods, resulting in an anti-dilutive effect: Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Stock Options 19,235,713 8,649,222 15,775,106 8,478,765 Warrants 273,280 273,280 273,280 273,280 Series E Preferred Stock 13,248,858 9,892,705 13,243,359 9,026,125 Total 32,757,851 18,815,207 29,291,745 17,778,170 Subsequent to October 31, 2015 and through December 10, 2015, we issued an aggregate of 3,865,257 shares of our common stock (Note 12), which are not included in the calculation of basic and diluted net loss per common share for the three and six months ended October 31, 2015. Pending Adoption of Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers Revenue Recognition Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity In June 2015, the FASB issued ASU No. 2015-10, Technical Corrections and Updates In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes |
3. TRADE AND OTHER RECEIVABLES
3. TRADE AND OTHER RECEIVABLES | 6 Months Ended |
Oct. 31, 2015 | |
Receivables [Abstract] | |
3. TRADE AND OTHER RECEIVABLES | Trade and other receivables, net, consists of the following: October 31, 2015 April 30, 2015 Trade receivables (1) $ 2,517,000 $ 3,423,000 Other receivables, net 387,000 390,000 Trade and other receivables, net $ 2,904,000 $ 3,813,000 ______________ (1) Represents amounts billed for contract manufacturing services provided by Avid. We continually monitor our allowance for doubtful accounts for all receivables. We apply judgment in assessing the ultimate realization of our receivables and we estimate an allowance for doubtful accounts based on various factors, such as, the aging of accounts receivable balances, historical experience, and the financial condition of our customers. Based on our analysis of our receivables as of October 31, 2015 and April 30, 2015, we determined an allowance for doubtful accounts of nil and $5,000, respectively, was necessary with respect to our other receivables, and no allowance was necessary with respect to our trade receivables. |
4. PROPERTY AND EQUIPMENT
4. PROPERTY AND EQUIPMENT | 6 Months Ended |
Oct. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
4. PROPERTY AND EQUIPMENT | Property and equipment is recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related asset, generally ranging from three to ten years. Amortization of leasehold improvements is calculated using the straight-line method over the shorter of the estimated useful life of the asset or the remaining lease term. Construction-in-progress, which represents direct costs related to the construction of a manufacturing facility, is not depreciated until the asset is completed and placed into service. No interest was incurred or capitalized as construction-in-progress as of October 31, 2015. Property and equipment, net, consists of the following: October 31, 2015 April 30, 2015 Leasehold improvements $ 1,657,000 $ 1,538,000 Laboratory equipment 6,171,000 5,965,000 Furniture, fixtures, office equipment and software 4,023,000 3,991,000 Construction-in-progress 18,559,000 11,819,000 30,410,000 23,313,000 Less accumulated depreciation and amortization (8,646,000 ) (8,189,000 ) Property and equipment, net $ 21,764,000 $ 15,124,000 Depreciation and amortization expense for the three and six months ended October 31, 2015 was $223,000 and $457,000, respectively. Depreciation and amortization expense for the three and six months ended October 31, 2014 was $265,000 and $542,000, respectively. |
5. INVENTORIES
5. INVENTORIES | 6 Months Ended |
Oct. 31, 2015 | |
Inventory Disclosure [Abstract] | |
5. INVENTORIES | Inventories are stated at the lower of cost or market and primarily include raw materials, direct labor and overhead costs (work-in-process) associated with our wholly-owned subsidiary, Avid. Cost is determined by the first-in, first-out method. Inventories consist of the following: October 31, 2015 April 30, 2015 Raw materials $ 6,923,000 $ 3,821,000 Work-in-process 5,631,000 3,533,000 Total inventories $ 12,554,000 $ 7,354,000 |
6. STOCKHOLDERS' EQUITY
6. STOCKHOLDERS' EQUITY | 6 Months Ended |
Oct. 31, 2015 | |
Equity [Abstract] | |
6. STOCKHOLDERS' EQUITY | Common Stock Our ability to continue our clinical trials and development efforts is highly dependent on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to support our future operations through one or more methods, including but not limited to, issuing additional equity. During the six months ended October 31, 2015, we issued common stock under the following agreements: June 2014 AMI Sales Agreement August 2015 AMI Sales Agreement Common Stock Purchase Agreement In addition, on August 7, 2015, we entered into an Equity Distribution Agreement, with Noble International Investments, Inc., doing business as Noble Life Science Partners, a division of Noble Financial Capital Markets (Noble), pursuant to which we may sell shares of our common stock through Noble, as agent, for aggregate gross proceeds of up to $20,000,000. The shares of our common stock issuable under the Equity Distribution Agreement are registered for sale to the public pursuant to a prospectus supplement filed on August 7, 2015 with the SEC in connection with a takedown from our January 2015 Shelf. We will pay Noble a commission equal to 2.5% of the gross proceeds from the sale of our common stock pursuant to the Equity Distribution Agreement. As of October 31, 2015, we had not sold any shares of common stock under the Equity Distribution Agreement. Series E Preferred Stock June 2014 Series E AMI Sales Agreement On June 13, 2014, we entered into an At Market Issuance Sales Agreement (Series E AMI Sales Agreement) with MLV, pursuant to which we may issue and sell shares of our Series E Preferred Stock through MLV, as agent, for aggregate gross proceeds of up to $30,000,000, in registered transactions from our shelf registration statement on Form S-3 (File No. 333-193113), which was declared effective by the SEC on January 16, 2014. During the six months ended October 31, 2015, we sold 2,676 shares of our Series E Preferred Stock at market prices under the Series E AMI Sales Agreement for aggregate gross proceeds of $60,000 before deducting commissions and other issuance costs of $1,000. As of October 31, 2015, aggregate gross proceeds of up to $10,735,000 remained available to us under the Series E AMI Sales Agreement. Rights and Preferences On February 12, 2014, we filed with the Secretary of State of the State of Delaware a Certificate of Designations of Rights and Preferences (the Certificate of Designations) to designate the Series E Preferred Stock. The Certificate of Designations designated 2,000,000 shares of Series E Preferred Stock out of our 5,000,000 shares of authorized but unissued shares of preferred stock. Certain terms of the Series E Preferred Stock include: (i) The holders are entitled to receive a 10.50% per annum cumulative quarterly dividend, payable in cash, on or about the 1 st (ii) The dividend may increase to a penalty rate of 12.50% if: (a) we fail to pay dividends for any four consecutive or nonconsecutive quarterly dividend periods, or (b) once the Series E Preferred Stock becomes initially eligible for listing on a national securities exchange, we fail, for 180 or more consecutive days, to maintain such listing; (iii) Following a change of control (as defined in the Certificate of Designations)of our company by a person or entity, we (or the acquiring entity) may, at our option, redeem the Series E Preferred Stock, in whole but not in part, within 120 days after the date on which the change of control has occurred for cash, at the redemption price; (iv) We may not redeem the Series E Preferred Stock prior to February 11, 2017 (except following a change of control) and, on and after February 11, 2017, we may redeem the Series E Preferred Stock for cash at our option, from time to time, in whole or in part, at the redemption price; (v) The redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether or not earned or declared) to, but excluding, the redemption date; (vi) The liquidation preference is $25.00 per share, plus any accrued and unpaid dividends (whether or not earned or declared); (vii) The Series E Preferred Stock has no stated maturity date or mandatory redemption and is senior to all of our other securities; (viii) There is a general conversion right with respect to the Series E Preferred Stock with an initial conversion price of $3.00, a special conversion right upon a change of control, and a market trigger conversion at our option in the event of Market Trigger (as defined in the Certificate of Designations); and (ix) The holders of the Series E Preferred Stock have no voting rights, except as defined in the Certificate of Designations. Series E Preferred Stock Dividends The following table summarizes the Series E Preferred Stock dividend activity for the six months ended October 31, 2015: Declaration Date Dividend Per Share Annualized Percentage Rate Liquidation Preference Accrual Period Record Date Payment Date 6/5/2015 $0.65625 10.50% $25.00 4/1/2015 6/30/2015 6/19/2015 7/1/2015 9/8/2015 $0.65625 10.50% $25.00 7/1/2015 9/30/2015 9/18/2015 10/1/2015 Shares of Common Stock Authorized and Reserved for Future Issuance We are authorized to issue up to 500,000,000 shares of our common stock. As of October 31, 2015, 225,824,551 shares of our common stock were issued and outstanding. In addition, our common stock outstanding as of October 31, 2015 excluded the following shares of common stock reserved for future issuance: · 39,622,557 shares of common stock reserved for issuance under outstanding option grants and available for issuance under our stock incentive plans; · 2,090,892 shares of common stock reserved for and available for issuance under our ESPP; · 273,280 shares of common stock issuable upon exercise of outstanding warrants; and · 45,745,760 shares of common stock issuable upon conversion of our outstanding Series E Preferred Stock (1) _____________ (1) The Series E Preferred Stock is convertible into a number of shares of common stock determined by dividing the liquidation preference of $25.00 per share by the conversion price, currently $3.00 per share. If all outstanding Series E Preferred Stock were converted at the $3.00 per share conversion price, the holders of Series E Preferred Stock would receive an aggregate of 13,145,333 shares of our common stock. However, we have reserved the maximum number of shares of our common stock that could be issued upon a change of control event assuming our shares of common stock are acquired for consideration of $0.855 per share or less. In this scenario, each outstanding share of Series E Preferred Stock could be converted into 29 shares of common stock, representing the Share Cap. |
7. EQUITY COMPENSATION PLANS
7. EQUITY COMPENSATION PLANS | 6 Months Ended |
Oct. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
7. EQUITY COMPENSATION PLANS | Stock Incentive Plans As of October 31, 2015, we had an aggregate of 39,622,557 shares of common stock reserved for issuance under our stock incentive plans, of which, 23,623,601 shares were subject to outstanding options and 15,998,956 shares were available for future grants of share-based awards. The following summarizes our stock option transaction activity for the six months ended October 31, 2015: Stock Options Shares Weighted Average Exercisable Price Outstanding, May 1, 2015 20,708,672 $ 1.54 Granted 3,731,035 $ 1.30 Exercised (165,266 ) $ 0.80 Canceled or expired (650,840 ) $ 1.76 Outstanding, October 31, 2015 23,623,601 $ 1.50 Employee Stock Purchase Plan We have reserved a total of 5,000,000 shares of common stock to be purchased under our ESPP, of which 2,090,892 shares remained available to purchase at October 31, 2015. The ESPP allows eligible employees on a voluntary basis to purchase shares of our common stock directly from us. Under the ESPP, we sell shares to participants at a price equal to the lesser of 85% of the fair market value of our common stock at the (i) beginning of a six-month offering period, or (ii) end of the six-month offering period. The ESPP provides for two six-month offering periods each year; the first offering period begins on the first trading day on or after each November 1; the second offering period begins on the first trading day on or after each May 1. During the six months ended October 31, 2015, 352,164 shares of our common stock were purchased under the ESPP at a purchase price of $0.95 per share. Share-Based Compensation Total share-based compensation expense is included in the accompanying unaudited condensed consolidated statements of operations as follows: Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Cost of contract manufacturing $ 9,000 $ 8,000 $ 22,000 $ 32,000 Research and development 569,000 860,000 1,040,000 1,603,000 Selling, general and administrative 696,000 1,020,000 1,395,000 2,029,000 Total $ 1,274,000 $ 1,888,000 $ 2,457,000 $ 3,664,000 Share-based compensation from: Stock options $ 1,223,000 $ 1,828,000 $ 2,347,000 $ 3,525,000 ESPP 51,000 60,000 110,000 139,000 $ 1,274,000 $ 1,888,000 $ 2,457,000 $ 3,664,000 As of October 31, 2015, the total estimated unrecognized compensation cost related to non-vested employee stock options was $4,901,000. This cost is expected to be recognized over a weighted average vesting period of 1.54 years based on current assumptions. In addition, as of October 31, 2015, the total estimated unrecognized compensation cost related to non-vested stock options granted to non-employees was $85,000 based on a October 31, 2015 measurement date. This cost is expected to be recognized over a weighted average vesting period of 0.75 years. |
8. WARRANTS
8. WARRANTS | 6 Months Ended |
Oct. 31, 2015 | |
Warrants and Rights Note Disclosure [Abstract] | |
8. WARRANTS | No warrants were issued or exercised during the three and six months ended October 31, 2015. As of October 31, 2015, warrants to purchase 273,280 shares of our common stock at an exercise price of $2.47 were outstanding and are exercisable through August 30, 2018. |
9. SEGMENT REPORTING
9. SEGMENT REPORTING | 6 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
9. SEGMENT REPORTING | Our business is organized into two reportable operating segments and both operate in the U.S. Peregrine is engaged in the research and development of monoclonal antibodies focused on the treatment of cancer. Avid is engaged in providing contract manufacturing services for third-party customers on a fee-for-service basis while also supporting our clinical and potential commercial drug supply of bavituximab. The accounting policies of the operating segments are the same as those described in Note 2. We evaluate the performance of our contract manufacturing services segment based on gross profit or loss from third-party customers. However, our products in the research and development segment are not evaluated based on gross profit or loss, but rather based on scientific progress of the technologies. As such, gross profit or loss is only provided for our contract manufacturing services segment in the below table. All revenues shown below are derived from transactions with third-party customers. Segment information is summarized as follows: Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Contract manufacturing services revenue $ 9,523,000 $ 6,263,000 $ 18,902,000 $ 11,759,000 Cost of contract manufacturing services 4,741,000 4,139,000 9,349,000 7,722,000 Gross profit 4,782,000 2,124,000 9,553,000 4,037,000 Revenue from products in research and development 37,000 292,000 37,000 Research and development expense (14,190,000 ) (10,003,000 ) (28,108,000 ) (20,204,000 ) Selling, general and administrative expense (4,416,000 ) (4,295,000 ) (9,315,000 ) (9,178,000 ) Interest and other income 626,000 37,000 657,000 79,000 Net loss $ (13,198,000 ) $ (12,100,000 ) $ (26,921,000 ) $ (25,229,000 ) Revenue generated from our contract manufacturing services segment was derived from a limited number of customers. The percentages below represent revenue derived from each customer (and geographical location) as a percentage of total contract manufacturing services revenue: Geographic Three Months Ended October 31, Six Months Ended October 31, Customer Location 2015 2014 2015 2014 Halozyme Therapeutics, Inc. U.S. 56% 74% 70% 86% Customer A U.S. 41 28 Customer B U.S. 25 13 Other customers U.S./non-U.S. 3 1 2 1 Total 100% 100% 100% 100% Revenue generated from our products in our research and development segment during the six months ended October 31, 2015 was directly related to license revenue recognized under certain agreements with an unrelated entity (Note 11). Our long-lived assets are located in the U.S. and consist of leasehold improvements, laboratory equipment, furniture and fixtures, office equipment and software, construction-in-progress and are net of accumulated depreciation. Long-lived assets by segment consist of the following: October 31, 2015 April 30, 2015 Long-lived Assets, net: Contract manufacturing services $ 19,595,000 $ 12,800,000 Products in research and development 2,169,000 2,324,000 Total $ 21,764,000 $ 15,124,000 |
10. COMMITMENTS AND CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Oct. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
10. COMMITMENTS AND CONTINGENCIES | In the ordinary course of business, we are at times subject to various legal proceedings and disputes. We make provisions for liabilities when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such provisions are reviewed at least quarterly and adjusted to reflect the impact of any settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable. Unless otherwise disclosed, we are unable to estimate the possible loss or range of loss for the legal proceedings described below. While it is not possible to accurately predict or determine the eventual outcome of these items, an adverse determination in one or more of these items currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows. Securities Related Class Action Lawsuit On September 28, 2012, three complaints were filed in the U.S. District Court for the Central District of California against us and certain of our executive officers and one consultant (collectively, the Defendants) on behalf of certain purchasers of our common stock. The complaints have been brought as purported stockholder class actions, and, in general, include allegations that Defendants violated (i) Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder and (ii) Section 20(a) of the Exchange Act, by making materially false and misleading statements regarding the interim results of our bavituximab Phase II second-line NSCLC trial, thereby artificially inflating the price of our common stock. The plaintiffs are seeking unspecified monetary damages and other relief. On February 5, 2013, the court consolidated the related actions with the low-numbered case (captioned Anderson v. Peregrine Pharmaceuticals, Inc., et al. Derivative Litigation On May 9, 2013, an alleged shareholder filed, purportedly on behalf of us, a derivative lawsuit, captioned Roy v. Steven W. King et al On October 10, 2013, a derivative/class action complaint, captioned Michaeli v. Steven W. King, et al. Other Legal Matters On September 24, 2012, we filed a lawsuit, captioned Peregrine Pharmaceuticals, Inc. v. Clinical Supplies Management, Inc., per se |
11. LICENSING AGREEMENTS
11. LICENSING AGREEMENTS | 6 Months Ended |
Oct. 31, 2015 | |
Notes to Financial Statements | |
11. LICENSING AGREEMENTS | During May 2010, we entered into an assignment agreement and a license agreement (collectively, the Agreements) with an unrelated entity to develop our Tumor Necrosis Therapy technologies in certain Asia-Pacific Economic Cooperation countries. We determined, pursuant to the authoritative guidance for revenue recognition for multiple element arrangements applied as of the transaction date, to utilize the residual method to allocate the consideration received under the arrangement. Under the residual method, the amount of consideration allocated to all other elements in the arrangement (delivered and undelivered) equals the total arrangement consideration less the aggregate fair value of the undelivered elements with stand-alone fair value (i.e., manufacturing commitment services). During May 2015, all obligations and commitments associated with the undelivered elements (i.e., manufacturing commitment services) expired in accordance with the terms of the Agreements and therefore, we recognized revenue of $292,000, which amount is included in license revenue in the accompanying unaudited condensed consolidated financial statements for the six months ended October 31, 2015. |
12. SUBSEQUENT EVENTS
12. SUBSEQUENT EVENTS | 6 Months Ended |
Oct. 31, 2015 | |
Subsequent Events [Abstract] | |
12. SUBSEQUENT EVENTS | Sale of Common Stock August 2015 AMI Sales Agreement Equity Distribution Agreement Series E Preferred Stock Dividend On December 7, 2015, our Board of Directors declared a quarterly cash dividend of $0.65625 per share on our Series E Preferred Stock. The dividend payment is equivalent to an annualized 10.50% per share, based on the $25.00 per share stated liquidation preference, accruing from October 1, 2015 through December 31, 2015. The cash dividend is payable on January 4, 2016 to holders of the Series E Preferred Stock of record on December 18, 2015. |
2. SUMMARY OF SIGNIFICANT ACC19
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Oct. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) and with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) related to quarterly reports on Form 10-Q. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended April 30, 2015. The condensed consolidated balance sheet at April 30, 2015, has been derived from audited financial statements at that date. The unaudited financial information for the interim periods presented herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operations for the periods presented, with such adjustments consisting only of normal recurring adjustments. Results of operations for interim periods covered by this quarterly report on Form 10-Q may not necessarily be indicative of results of operations for the full fiscal year or any other interim period. The unaudited condensed consolidated financial statements include the accounts of Peregrine and Avid. All intercompany accounts and transactions among the consolidated entities have been eliminated in the unaudited condensed consolidated financial statements. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts, as well as disclosures of commitments and contingencies in the financial statements and accompanying notes. Actual results could differ materially from those estimates. In addition, our accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should it be determined that we are unable to continue as a going concern. |
Liquidity and Financial Condition | Liquidity and Financial Condition At October 31, 2015, we had $72,005,000 in cash and cash equivalents. We have expended substantial funds on the research and development of our product candidates, and funding the operations of Avid. As a result, we have historically experienced negative cash flows from operations since our inception and we expect negative cash flows from operations to continue in the foreseeable future. Therefore, unless and until we are able to generate sufficient revenue from Avids contract manufacturing services or from the sale or licensing of our product candidates under development, we expect such losses to continue in the foreseeable future. Our ability to continue to fund our clinical trials and development efforts is highly dependent on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to support our future operations through one or more methods, including but not limited to, (i) raising additional capital in the equity markets, (ii) licensing or partnering our product candidates in development, or (iii) generating additional revenue from Avid. Historically, we have funded a significant portion of our operations through the issuance of equity. During the six months ended October 31, 2015, we raised $36,642,000 in aggregate gross proceeds from the sale of shares of our common stock (Note 6). Subsequent to October 31, 2015 and through December 10, 2015, we raised an additional $4,632,000 in aggregate gross proceeds from the sale of shares of our common stock (Note 12). As of December 10, 2015, $119,213,000 remained available to us under our two effective shelf registration statements, which allows us from time to time to offer and sell shares of our common stock or preferred stock, in one or more offerings, either individually or in combination. Our ability to raise additional capital in the equity markets to fund our obligations in future periods is dependent on a number of factors, including, but not limited to, the market demand for our common stock or 10.5% Series E Convertible Preferred Stock (the Series E Preferred Stock). The market demand or liquidity of our common stock or Series E Preferred Stock is subject to a number of risks and uncertainties, including but not limited to, negative economic conditions, adverse market conditions, adverse clinical trial results and significant delays in one or more clinical trials. If we are unable to either (i) raise sufficient capital in the equity markets, (ii) license or partner our products in development, or (iii) generate additional revenue from Avid, or any combination thereof, we may need to delay, scale back, or eliminate some or all our research and development efforts, delay the commercial launch of bavituximab, if approved, or restructure our operations. In addition, even if we are able to raise additional capital, it may not be at a price or on terms that are favorable to us. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid, short-term investments with an initial maturity of three months or less to be cash equivalents. |
Concentrations of Credit Risk and Customer Base | Concentrations of Credit Risk and Customer Base Financial instruments that potentially subject us to a significant concentration of credit risk consist of cash and cash equivalents and trade receivables. We maintain our cash balances primarily with one major commercial bank and our deposits held with the bank exceed the amount of government insurance limits provided on our deposits. We are exposed to credit risk in the event of default by the major commercial bank holding our cash balances to the extent of the cash amount recorded on the accompanying unaudited condensed consolidated balance sheet. Our trade receivables from amounts billed for contract manufacturing services provided by Avid have historically been derived from a small customer base. Most contracts require up-front payments and installment payments during the service period. We perform periodic evaluations of the financial condition of our customers and generally do not require collateral, but we can terminate any contract if a material default occurs. Approximately 94% of our trade receivable balance as of October 31, 2015 (Note 3), represents amounts due from three customers. In addition, contract manufacturing revenue generated by Avid has historically been derived from a small customer base (Note 9). These customers typically do not enter into long-term contracts because their need for drug supply depends on a variety of factors, including the drugs stage of development, their financial resources, and, with respect to commercial drugs, demand for the drug in the market. Our future results of operations could be adversely affected if revenue from any one of our primary customers is significantly reduced or eliminated |
Revenue Recognition | Revenue Recognition We currently derive revenue from two sources: (i) contract manufacturing services provided by Avid, and (ii) licensing revenue related to agreements associated with Peregrines technologies under development. We recognize revenue in accordance with the authoritative guidance for revenue recognition. We recognize revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery (or passage of title) has occurred or services have been rendered, (iii) the sellers price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. We also comply with the authoritative guidance for revenue recognition regarding arrangements with multiple deliverables. Contract Manufacturing Revenue Revenue associated with contract manufacturing services provided by Avid is recognized once the service has been rendered and/or upon shipment (or passage of title) of the product to the customer. On occasion, we recognize revenue on a bill-and-hold basis in accordance with the authoritative guidance. Under bill-and-hold arrangements, revenue is recognized once the product is complete and ready for shipment, title and risk of loss has passed to the customer, management receives a written request from the customer for bill-and-hold treatment, the product is segregated from other inventory, and no further performance obligations exist. In addition, we also follow the authoritative guidance when reporting revenue as gross when we act as a principal versus reporting revenue as net when we act as an agent. For transactions in which we act as a principal, have discretion to choose suppliers, bear credit and inventory risk and perform a substantive part of the services, revenue is recorded at the gross amount billed to a customer and costs associated with these reimbursements are reflected as a component of cost of sales for contract manufacturing services. Any amounts received prior to satisfying our revenue recognition criteria are recorded as deferred revenue in the accompanying unaudited condensed consolidated financial statements. We also record a provision for estimated contract losses, if any, in the period in which they are determined. License Revenue Revenue associated with licensing agreements primarily consists of non-refundable upfront license fees, non-refundable annual license fees and milestone payments. Non-refundable upfront license fees received under license agreements, whereby continued performance or future obligations are considered inconsequential to the relevant license technology, are recognized as revenue upon delivery of the technology. If a licensing agreement has multiple elements, we analyze each element of our licensing agreements and consider a variety of factors in determining the appropriate method of revenue recognition of each element. Multiple Element Arrangements. In addition, under certain circumstances, when there is objective and reliable evidence of the fair value of the undelivered items in an arrangement, but no such evidence for the delivered items, we utilize the residual method to allocate the consideration received under the arrangement. Under the residual method, the amount of consideration allocated to delivered items equals the total arrangement consideration less the aggregate fair value of the undelivered items, and revenue is recognized upon delivery of the undelivered items based on the relative fair value of the undelivered items. For licensing agreements or material modifications of existing licensing agreements entered into after May 1, 2011, we follow the provisions of ASU No. 2009-13. If a licensing agreement includes multiple elements, we identify which deliverables represent separate units of accounting, and then determine how the arrangement consideration should be allocated among the separate units of accounting, which may require the use of significant judgment. If a licensing agreement includes multiple elements, a delivered item is considered a separate unit of accounting if both of the following criteria are met: 1. The delivered item has value to the licensing partner on a standalone basis based on the consideration of the relevant facts and circumstances for each agreement; and 2. If the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in our control. Arrangement consideration is allocated at the inception of the agreement to all identified units of accounting based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence (VSOE) of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists, we use our best estimate of the selling price for the deliverable. The amount of allocable arrangement consideration is limited to amounts that are fixed or determinable. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. Changes in the allocation of the sales price between delivered and undelivered elements can impact revenue recognition but do not change the total revenue recognized under any agreement. Milestone Payments. 1. The consideration is commensurate with either the entitys performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entitys performance to achieve the milestone; 2. The consideration relates solely to past performance; and 3. The consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. A milestone is defined as an event (i) that can only be achieved based in whole or in part on either the entitys performance or on the occurrence of a specific outcome resulting from the entitys performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and (iii) that would result in additional payments being due to us. The provisions of ASU No. 2010-17 do not apply to contingent consideration for which payment is either contingent solely upon the passage of time or the result of a counterpartys performance. We will assess the nature of, and appropriate accounting for, these payments on a case-by-case basis in accordance with the applicable authoritative guidance for revenue recognition. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue in the accompanying unaudited condensed consolidated financial statements. |
Fair Value Measurements | Fair Value Measurements We determine fair value measurements in accordance with the authoritative guidance for fair value measurements and disclosures for all assets and liabilities within the scope of this guidance. This guidance, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance prioritizes the inputs used in measuring fair value into the following hierarchy: · Level 1 Observable inputs, such as quoted prices in active markets for identical assets or liabilities. · Level 2 Observable inputs other than quoted prices included in Level 1, such as assets or liabilities whose values are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets. · Level 3 Unobservable inputs that are supported by little or no market activity and that are considered significant to the overall fair value measurement of the assets or liabilities; therefore, requiring the company to develop its own valuation techniques and assumptions. As of October 31, 2015 and April 30, 2015, we do not have any Level 2 or Level 3 financial assets or liabilities and our cash and cash equivalents, which are primarily invested in money market funds with one major commercial bank, are carried at fair value based on quoted market prices for identical securities (Level 1 input). |
Customer Deposits | Customer Deposits Customer deposits primarily represent advance billings and/or payments received from Avids third-party customers prior to the initiation of contract manufacturing services. |
Research and Development Expenses | Research and Development Expenses Research and development expenses primarily include (i) payroll and related costs, including share-based compensation associated with research and development personnel, (ii) costs related to clinical trials and preclinical testing of our technologies under development, (iii) costs to develop and manufacture the product candidates, including raw materials and supplies, product testing, depreciation, and facility related expenses, (iv) expenses for research services provided by universities and contract laboratories, including sponsored research funding, and (v) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to our research and development efforts and have no alternative future uses. Clinical trial costs are a significant component of our research and development expenses. We have a history of contracting with third parties that perform various clinical trial activities on our behalf in the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. Expenses related to clinical trials are accrued based on our estimates and/or representations from third parties (including clinical research organizations) regarding services performed. If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we modify our accruals accordingly on a prospective basis. Revisions in the scope of a contract are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. There were no material adjustments for a change in estimate to research and development expenses in the accompanying unaudited condensed consolidated financial statements for the three and six months ended October 31, 2015 and 2014. Under certain research and development agreements, we are obligated to make certain advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities and are deferred and capitalized as prepaid research and development expenses. These advance payments are recognized as an expense in the period the related goods are delivered or the related services are performed. We assess our prepaid research and development expenses for impairment when events or changes in circumstances indicate that the carrying amount of the prepaid expense may not be recoverable or provide future economic benefit. In addition, under certain in-licensing agreements associated with the research and development of our product candidates, we are obligated to pay certain milestone payments based on potential clinical development and regulatory milestones. These milestone payments have no alternative future uses (in other research and development projects or otherwise) and therefore have no separate economic values and are expensed as research and development costs at the time the costs are incurred. We have no in-licensed product candidates that have alternative future uses in research and development projects or otherwise. |
Share-based Compensation | Share-based Compensation We account for stock options and other share-based awards granted under our equity compensation plans in accordance with the authoritative guidance for share-based compensation. The estimated fair value of share-based payments to employees in exchange for services is measured at the grant date, using a fair value based method, such as a Black-Scholes option valuation model, and is recognized as expense on a straight-line basis over the requisite service periods. The fair value of modifications to share-based awards, if any, is generally estimated using a Black-Scholes option valuation model, unless a lattice model is required. Share-based compensation expense recognized during the period is based on the value of the portion of the share-based payment that is ultimately expected to vest during the period. In addition, as of October 31, 2015, there were no outstanding share-based awards with market or performance conditions. Periodically, we grant stock options and other share-based awards to non-employee consultants, which we account for in accordance with the authoritative guidance for share-based compensation. The cost of non-employee services received in exchange for share-based awards are measured based on either the fair value of the consideration received or the fair value of the share-based award issued, whichever is more reliably measurable. In addition, guidance requires share-based compensation related to unvested options and awards issued to non-employees to be remeasured at the end of each reporting period based upon the fair market value on that date until the share-based award has vested, and any cumulative catch-up adjustment to share-based compensation resulting from the re-measurement is recognized in the current period (Note 7). |
Basic and Dilutive Net Loss Per Common Share | Basic and Dilutive Net Loss Per Common Share Basic net loss per common share is computed by dividing our net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period excluding the dilutive effects of stock options, shares of common stock expected to be issued under our 2010 Employee Stock Purchase Plan (the ESPP), warrants, and Series E Preferred Stock outstanding during the period. Diluted net loss per common share is computed by dividing our net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding during the period plus the potential dilutive effects of stock options, shares of common stock expected to be issued under our ESPP, warrants, and Series E Preferred Stock outstanding during the period. Net loss attributable to common stockholders represents our net loss plus Series E Preferred Stock accumulated dividends. Series E Preferred Stock accumulated dividends include dividends declared for the period (regardless of whether or not the dividends have been paid) and dividends accumulated for the period (regardless of whether or not the dividends have been declared). The potential dilutive effect of stock options, shares of common stock expected to be issued under our ESPP, and warrants outstanding during the period was calculated in accordance with the treasury stock method, but are excluded if their effect is anti-dilutive. The potential dilutive effect of Series E Preferred Stock outstanding during the period was calculated using the if-converted method assuming the conversion of Series E Preferred Stock as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive. However, because the impact of stock options, shares of common stock expected to be issued under our ESPP, warrants, and Series E Preferred Stock are anti-dilutive during periods of net loss, there was no difference between basic and diluted loss per common share amounts for the three and six months ended October 31, 2015 and 2014. The calculation of weighted average diluted shares outstanding for the three and six-month periods ended October 31, 2014 and 2015 excludes the dilutive effect of the following weighted average outstanding stock options and shares of common stock expected to be issued under our employee stock purchase plan as their impact are anti-dilutive during periods of net loss: Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Stock Options 1,958,583 3,792,774 2,340,300 4,449,657 ESPP 40,581 16,916 40,519 18,701 Total 1,999,164 3,809,690 2,380,819 4,468,358 The calculation of weighted average diluted shares outstanding for the three and six-month periods ended October 31, 2014 and 2015 also excludes the following weighted average outstanding stock options, warrants, and Series E Preferred Stock (assuming the if-converted method), as their exercise prices or conversion price were greater than the average market price of our common stock during the respective periods, resulting in an anti-dilutive effect: Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Stock Options 19,235,713 8,649,222 15,775,106 8,478,765 Warrants 273,280 273,280 273,280 273,280 Series E Preferred Stock 13,248,858 9,892,705 13,243,359 9,026,125 Total 32,757,851 18,815,207 29,291,745 17,778,170 Subsequent to October 31, 2015 and through December 10, 2015, we issued an aggregate of 3,865,257 shares of our common stock (Note 12), which are not included in the calculation of basic and diluted net loss per common share for the three and six months ended October 31, 2015. |
Pending Adoption of Recent Accounting Pronouncements | Pending Adoption of Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers Revenue Recognition Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity In June 2015, the FASB issued ASU No. 2015-10, Technical Corrections and Updates In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes |
2. SUMMARY OF SIGNIFICANT ACC20
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICY (Tables) | 6 Months Ended |
Oct. 31, 2015 | |
Summary Of Significant Accounting Policy Tables | |
Schedule of antidilutive shares | The calculation of weighted average diluted shares outstanding for the three and six-month periods ended October 31, 2014 and 2015 excludes the dilutive effect of the following weighted average outstanding stock options and shares of common stock expected to be issued under our employee stock purchase plan as their impact are anti-dilutive during periods of net loss: Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Stock Options 1,958,583 3,792,774 2,340,300 4,449,657 ESPP 40,581 16,916 40,519 18,701 Total 1,999,164 3,809,690 2,380,819 4,468,358 The calculation of weighted average diluted shares outstanding for the three and six-month periods ended October 31, 2014 and 2015 also excludes the following weighted average outstanding stock options, warrants, and Series E Preferred Stock (assuming the if-converted method), as their exercise prices or conversion price were greater than the average market price of our common stock during the respective periods, resulting in an anti-dilutive effect: Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Stock Options 19,235,713 8,649,222 15,775,106 8,478,765 Warrants 273,280 273,280 273,280 273,280 Series E Preferred Stock 13,248,858 9,892,705 13,243,359 9,026,125 Total 32,757,851 18,815,207 29,291,745 17,778,170 |
3. TRADE AND OTHER RECEIVABLES
3. TRADE AND OTHER RECEIVABLES (Tables) | 6 Months Ended |
Oct. 31, 2015 | |
Receivables [Abstract] | |
Trade and other receivables | October 31, 2015 April 30, 2015 Trade receivables (1) $ 2,517,000 $ 3,423,000 Other receivables, net 387,000 390,000 Trade and other receivables, net $ 2,904,000 $ 3,813,000 ______________ (1) Represents amounts billed for contract manufacturing services provided by Avid. |
4. PROPERTY AND EQUIPMENT (Tabl
4. PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Oct. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | October 31, 2015 April 30, 2015 Leasehold improvements $ 1,657,000 $ 1,538,000 Laboratory equipment 6,171,000 5,965,000 Furniture, fixtures, office equipment and software 4,023,000 3,991,000 Construction-in-progress 18,559,000 11,819,000 30,410,000 23,313,000 Less accumulated depreciation and amortization (8,646,000 ) (8,189,000 ) Property and equipment, net $ 21,764,000 $ 15,124,000 |
5. INVENTORIES (Tables)
5. INVENTORIES (Tables) | 6 Months Ended |
Oct. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | October 31, 2015 April 30, 2015 Raw materials $ 6,923,000 $ 3,821,000 Work-in-process 5,631,000 3,533,000 Total inventories $ 12,554,000 $ 7,354,000 |
6. STOCKHOLDERS' EQUITY (Tables
6. STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Oct. 31, 2015 | |
Stockholders Equity Tables | |
Schedule of dividends declared | Declaration Date Dividend Per Share Annualized Percentage Rate Liquidation Preference Accrual Period Record Date Payment Date 6/5/2015 $0.65625 10.50% $25.00 4/1/2015 6/30/2015 6/19/2015 7/1/2015 9/8/2015 $0.65625 10.50% $25.00 7/1/2015 9/30/2015 9/18/2015 10/1/2015 |
7. EQUITY COMPENSATION PLANS (T
7. EQUITY COMPENSATION PLANS (Tables) | 6 Months Ended |
Oct. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option transaction activity | Stock Options Shares Weighted Average Exercisable Price Outstanding, May 1, 2015 20,708,672 $ 1.54 Granted 3,731,035 $ 1.30 Exercised (165,266 ) $ 0.80 Canceled or expired (650,840 ) $ 1.76 Outstanding, October 31, 2015 23,623,601 $ 1.50 |
Share-based compensation expense | Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Cost of contract manufacturing $ 9,000 $ 8,000 $ 22,000 $ 32,000 Research and development 569,000 860,000 1,040,000 1,603,000 Selling, general and administrative 696,000 1,020,000 1,395,000 2,029,000 Total $ 1,274,000 $ 1,888,000 $ 2,457,000 $ 3,664,000 Share-based compensation from: Stock options $ 1,223,000 $ 1,828,000 $ 2,347,000 $ 3,525,000 ESPP 51,000 60,000 110,000 139,000 $ 1,274,000 $ 1,888,000 $ 2,457,000 $ 3,664,000 |
9. SEGMENT REPORTING (Tables)
9. SEGMENT REPORTING (Tables) | 6 Months Ended |
Oct. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment information | Three Months Ended October 31, Six Months Ended October 31, 2015 2014 2015 2014 Contract manufacturing services revenue $ 9,523,000 $ 6,263,000 $ 18,902,000 $ 11,759,000 Cost of contract manufacturing services 4,741,000 4,139,000 9,349,000 7,722,000 Gross profit 4,782,000 2,124,000 9,553,000 4,037,000 Revenue from products in research and development 37,000 292,000 37,000 Research and development expense (14,190,000 ) (10,003,000 ) (28,108,000 ) (20,204,000 ) Selling, general and administrative expense (4,416,000 ) (4,295,000 ) (9,315,000 ) (9,178,000 ) Interest and other income 626,000 37,000 657,000 79,000 Net loss $ (13,198,000 ) $ (12,100,000 ) $ (26,921,000 ) $ (25,229,000 ) |
Customer Revenue | Geographic Three Months Ended October 31, Six Months Ended October 31, Customer Location 2015 2014 2015 2014 Halozyme Therapeutics, Inc. U.S. 56% 74% 70% 86% Customer A U.S. 41 28 Customer B U.S. 25 13 Other customers U.S./non-U.S. 3 1 2 1 Total 100% 100% 100% 100% |
Long-lived assets | October 31, 2015 April 30, 2015 Long-lived Assets, net: Contract manufacturing services $ 19,595,000 $ 12,800,000 Products in research and development 2,169,000 2,324,000 Total $ 21,764,000 $ 15,124,000 |
2. SUMMARY OF SIGNIFICANT ACC27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares) - shares | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Stock Options | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 1,958,583 | 3,792,774 | 2,340,300 | 4,449,657 |
Stock Options | If-Converted Method | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 19,235,713 | 8,649,222 | 15,775,106 | 8,478,765 |
ESPP | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 40,581 | 16,916 | 40,519 | 18,701 |
Options and ESPP Warrants | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 1,999,164 | 3,809,690 | 2,380,819 | 4,468,358 |
Warrants | If-Converted Method | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 273,280 | 273,280 | 273,280 | 273,280 |
Series E Preferred Stock [Member] | If-Converted Method | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 13,248,858 | 9,892,705 | 13,243,359 | 9,026,125 |
Options, Warrants and Series E Preferred Stock | If-Converted Method | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 32,757,851 | 18,815,207 | 29,291,745 | 17,778,170 |
2. SUMMARY OF SIGNIFICANT ACC28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Dec. 10, 2015 | Oct. 31, 2015 | Apr. 30, 2015 | Oct. 31, 2014 | Apr. 30, 2014 | |
Cash and cash equivalents | $ 72,005,000 | $ 68,001,000 | $ 64,439,000 | $ 77,490,000 | |
Common Stock | |||||
Gross proceeds from issuance of equity | $ 4,632,000 | $ 36,642,000 | |||
Amounts Remaining Under Shelf Agreements | $ 119,213,000 | ||||
Stock issued subsequent to date, not included in loss per share | 3,865,257 |
3. TRADE AND OTHER RECEIVABLE29
3. TRADE AND OTHER RECEIVABLES (Details) - USD ($) | Oct. 31, 2015 | Apr. 30, 2015 |
Receivables [Abstract] | ||
Trade receivables | $ 2,517,000 | $ 3,423,000 |
Other receivables, net | 387,000 | 390,000 |
Trade and other receivables, net | $ 2,904,000 | $ 3,813,000 |
3. TRADE AND OTHER RECEIVABLE30
3. TRADE AND OTHER RECEIVABLES (Details Narrative) - USD ($) | Oct. 31, 2015 | Apr. 30, 2015 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 5,000 |
4. PROPERTY AND EQUIPMENT (Deta
4. PROPERTY AND EQUIPMENT (Details) - USD ($) | Oct. 31, 2015 | Apr. 30, 2015 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 1,657,000 | $ 1,538,000 |
Laboratory equipment | 6,171,000 | 5,965,000 |
Furniture, fixtures, office equipment and software | 4,023,000 | 3,991,000 |
Construction-in-progress | 18,559,000 | 11,819,000 |
Property, gross | 30,410,000 | 23,313,000 |
Less accumulated depreciation and amortization | (8,646,000) | (8,189,000) |
Property and equipment, net | $ 21,764,000 | $ 15,124,000 |
4. PROPERTY AND EQUIPMENT (De32
4. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization | $ 223,000 | $ 265,000 | $ 457,000 | $ 542,000 |
5. INVENTORIES (Details)
5. INVENTORIES (Details) - USD ($) | Oct. 31, 2015 | Apr. 30, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,923,000 | $ 3,821,000 |
Work-in-process | 5,631,000 | 3,533,000 |
Total inventories | $ 12,554,000 | $ 7,354,000 |
6. STOCKHOLDERS' EQUITY (Detail
6. STOCKHOLDERS' EQUITY (Details - Dividends declared) | 6 Months Ended |
Oct. 31, 2015$ / shares | |
Declared 06-05-2015 | |
Declaration date | Jun. 5, 2015 |
Dividend per share | $ .65625 |
Annualized Percentage Rate | 10.50% |
Liquidation preference | $ 25 |
Accrual period | 4/1/2015 - 6/30/2015 |
Record date | Jun. 19, 2015 |
Payment date | Jul. 1, 2015 |
Declared 09-08-2015 | |
Declaration date | Sep. 8, 2015 |
Dividend per share | $ .65625 |
Annualized Percentage Rate | 10.50% |
Liquidation preference | $ 25 |
Accrual period | 7/1/2015-9/30/2015 |
Record date | Sep. 18, 2015 |
Payment date | Oct. 1, 2015 |
6. STOCKHOLDERS' EQUITY (Deta35
6. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 6 Months Ended | |
Oct. 31, 2015 | Oct. 31, 2014 | |
Proceeds from issuance of stock | $ 36,198,000 | $ 4,213,000 |
Proceeds from issuance of Series E Preferred Stock | $ 59,000 | $ 9,518,000 |
Series E Preferred Stock [Member] | ||
Shares reserved for future issuance | 45,745,760 | |
If converted, Series E Preferred stock holders would receive shares of common stock. Common shares to be issued | 13,145,333 | |
Each outstanding share that could be converted into common shares | 29 | |
Series E Preferred Stock [Member] | June 2014 AMI Sales Agreement | ||
Aggregate gross proceeds available under agreement | $ 10,735,000 | |
Proceeds from issuance of Series E Preferred Stock | $ 60,000 | |
Shares issued, new | 2,676 | |
Commissions and other issuance costs | $ 1,000 | |
Common Stock | June 2014 AMI Sales Agreement | ||
Aggregate gross proceeds available under agreement | 0 | |
Proceeds from issuance of stock | $ 11,456,000 | |
Shares issued, new | 8,629,738 | |
Commissions and other issuance costs | $ 311,000 | |
Common Stock | August 2015 AMI Sales Agreement | ||
Aggregate gross proceeds available under agreement | 24,814,000 | |
Proceeds from issuance of stock | $ 5,186,000 | |
Shares issued, new | 4,812,238 | |
Commissions and other issuance costs | $ 132,000 | |
Common Stock | Common Stock Purchase Agreement | ||
Proceeds from issuance of stock | $ 20,000,000 | |
Shares issued, new | 18,518,518 | |
Commissions and other issuance costs | $ 1,000 | |
Stock Incentive Plans | ||
Shares reserved for future issuance | 39,622,557 | |
ESPP | ||
Shares reserved for future issuance | 2,090,892 | |
Warrants | ||
Shares reserved for future issuance | 273,280 |
7. EQUITY COMPENSATION PLANS (D
7. EQUITY COMPENSATION PLANS (Details - Option activity) | 6 Months Ended |
Oct. 31, 2015$ / sharesshares | |
Number of Options | |
Number of Options Outstanding, Beginning | shares | 20,708,672 |
Number of Options Granted | shares | 3,731,035 |
Number of Options Exercised | shares | (165,266) |
Number of Options Cancelled or Expired | shares | (650,840) |
Number of Options Outstanding, Ending | shares | 23,623,601 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 1.54 |
Weighted Average Exercise Price Granted | $ / shares | 1.30 |
Weighted Average Exercise Price Exercised | $ / shares | 0.80 |
Weighted Average Exercise Price Canceled | $ / shares | 1.76 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 1.50 |
7. EQUITY COMPENSATION PLANS 37
7. EQUITY COMPENSATION PLANS (Details - Share based compensation) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Share based compensation | $ 1,274,000 | $ 1,888,000 | $ 2,457,000 | $ 3,664,000 |
Cost of contract manufacturing | ||||
Share based compensation | 9,000 | 8,000 | 22,000 | 32,000 |
Research and development | ||||
Share based compensation | 569,000 | 860,000 | 1,040,000 | 1,603,000 |
Selling, general and administrative | ||||
Share based compensation | 696,000 | 1,020,000 | 1,395,000 | 2,029,000 |
Stock Options | ||||
Share based compensation | 1,223,000 | 1,828,000 | 2,347,000 | 3,525,000 |
ESPP | ||||
Share based compensation | $ 51,000 | $ 60,000 | $ 110,000 | $ 139,000 |
7. EQUITY COMPENSATION PLANS 38
7. EQUITY COMPENSATION PLANS (Details Narrative) | 6 Months Ended |
Oct. 31, 2015USD ($)shares | |
Employees | |
Unrecognized compensation cost | $ | $ 4,901,000 |
Unrecognized cost amortization period | 1 year 6 months 14 days |
Non-Employees | |
Unrecognized compensation cost, nonemployees | $ | $ 85,000 |
Unrecognized cost amortization period for nonemployees | 9 months |
2010 ESPP | |
Shares authorized under plan | 5,000,000 |
Shares available to purchase | 2,090,892 |
Stock Incentive Plans | |
Shares reserved for future issuance | 39,622,557 |
Stock Options | |
Shares reserved for future issuance | 23,623,601 |
Share-based awards | |
Shares reserved for future issuance | 15,998,956 |
8. WARRANTS (Details Narrative)
8. WARRANTS (Details Narrative) | 6 Months Ended |
Oct. 31, 2015$ / sharesshares | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants issued | 0 |
Warrants exercised | 0 |
Warrants outstanding | 273,280 |
Warrant exercise price | $ / shares | $ 2.47 |
Warrants exercisable expiration date | Aug. 30, 2018 |
9. SEGMENT REPORTING (Details)
9. SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Segment Reporting [Abstract] | ||||
Contract manufacturing services revenue | $ 9,523,000 | $ 6,263,000 | $ 18,902,000 | $ 11,759,000 |
Cost of contract manufacturing services | 4,741,000 | 4,139,000 | 9,349,000 | 7,722,000 |
Gross profit | 4,782,000 | 2,124,000 | 9,553,000 | 4,037,000 |
Revenue from products in research and development | 0 | 37,000 | 292,000 | 37,000 |
Research and development expense | (14,190,000) | (10,003,000) | (28,108,000) | (20,204,000) |
Selling, general and administrative expense | (4,416,000) | (4,295,000) | (9,315,000) | (9,178,000) |
Interest and other income | 626,000 | 37,000 | 657,000 | 79,000 |
Net loss | $ (13,198,000) | $ (12,100,000) | $ (26,921,000) | $ (25,229,000) |
9. SEGMENT REPORTING (Details -
9. SEGMENT REPORTING (Details - Percentage breakdown) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Customer revenue as a percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Sales Revenue, Net [Member] | Halozyme Therapeutics | ||||
Customer revenue as a percentage of revenue | 56.00% | 74.00% | 70.00% | 86.00% |
Sales Revenue, Net [Member] | Customer A | ||||
Customer revenue as a percentage of revenue | 41.00% | 0.00% | 28.00% | 0.00% |
Sales Revenue, Net [Member] | Customer B | ||||
Customer revenue as a percentage of revenue | 0.00% | 25.00% | 0.00% | 13.00% |
Sales Revenue, Net [Member] | Other Customers | ||||
Customer revenue as a percentage of revenue | 3.00% | 1.00% | 2.00% | 1.00% |
9. SEGMENT REPORTING (Details42
9. SEGMENT REPORTING (Details - Long lived assets) - USD ($) | Oct. 31, 2015 | Apr. 30, 2015 |
Long-lived assets | $ 21,764,000 | $ 15,124,000 |
Contract Manufacturing Services | ||
Long-lived assets | 19,595,000 | 12,800,000 |
Products in research and development | ||
Long-lived assets | $ 2,169,000 | $ 2,324,000 |
11. LICENSING AGREEMENTS (Detai
11. LICENSING AGREEMENTS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 | Oct. 31, 2014 | |
Licensing Agreements Details Narrative | ||||
License revenue recognized | $ 0 | $ 37,000 | $ 292,000 | $ 37,000 |