Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jan. 31, 2017 | Mar. 10, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | PEREGRINE PHARMACEUTICALS INC | |
Entity Central Index Key | 704,562 | |
Document Type | 10-Q | |
Document Period End Date | Jan. 31, 2017 | |
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 | 297,709,478 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jan. 31, 2017 | Apr. 30, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 41,528,000 | $ 61,412,000 |
Trade and other receivables | 5,883,000 | 2,859,000 |
Inventories | 33,829,000 | 16,186,000 |
Prepaid expenses and other current assets | 1,747,000 | 1,351,000 |
Total current assets | 82,987,000 | 81,808,000 |
Property and equipment, net | 24,143,000 | 24,302,000 |
Restricted cash | 600,000 | 600,000 |
Other assets | 3,587,000 | 2,333,000 |
TOTAL ASSETS | 111,317,000 | 109,043,000 |
CURRENT LIABILITIES: | ||
Accounts payable | 7,696,000 | 8,429,000 |
Accrued clinical trial and related fees | 3,127,000 | 7,594,000 |
Accrued payroll and related costs | 5,637,000 | 5,821,000 |
Deferred revenue | 26,367,000 | 10,030,000 |
Customer deposits | 26,210,000 | 24,212,000 |
Other current liabilities | 941,000 | 1,488,000 |
Total current liabilities | 69,978,000 | 57,574,000 |
Deferred rent, less current portion | 1,325,000 | 1,395,000 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock - $0.001 par value; authorized 5,000,000 shares; 1,647,760 and 1,577,440 issued and outstanding at January 31, 2017 and April 30, 2016, respectively | 2,000 | 2,000 |
Common stock - $0.001 par value; authorized 500,000,000 shares; 271,068,464 and 236,930,485 issued and outstanding at January 31, 2017 and April 30, 2016, respectively | 271,000 | 237,000 |
Additional paid-in-capital | 571,904,000 | 559,111,000 |
Accumulated deficit | (532,163,000) | (509,276,000) |
Total stockholders' equity | 40,014,000 | 50,074,000 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 111,317,000 | $ 109,043,000 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jan. 31, 2017 | Apr. 30, 2016 |
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 | 1,647,760 | 1,577,440 |
Preferred stock, shares outstanding | 1,647,760 | 1,577,440 |
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 271,068,464 | 236,930,485 |
Common stock, shares outstanding | 271,068,464 | 236,930,485 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
REVENUES: | ||||
Contract manufacturing revenue | $ 10,747,000 | $ 6,672,000 | $ 39,726,000 | $ 25,574,000 |
License revenue | 0 | 37,000 | 0 | 329,000 |
Total revenues | 10,747,000 | 6,709,000 | 39,726,000 | 25,903,000 |
COSTS AND EXPENSES: | ||||
Cost of contract manufacturing | 7,974,000 | 3,896,000 | 26,477,000 | 13,245,000 |
Research and development | 5,989,000 | 15,156,000 | 21,580,000 | 43,264,000 |
Selling, general and administrative | 4,581,000 | 4,524,000 | 14,625,000 | 13,839,000 |
Total costs and expenses | 18,544,000 | 23,576,000 | 62,682,000 | 70,348,000 |
LOSS FROM OPERATIONS | (7,797,000) | (16,867,000) | (22,956,000) | (44,445,000) |
OTHER INCOME (EXPENSE): | ||||
Interest and other income | 25,000 | 34,000 | 71,000 | 691,000 |
Interest and other expense | (2,000) | (14,000) | (2,000) | (14,000) |
Total other income, net | 23,000 | 20,000 | 69,000 | 677,000 |
NET LOSS | (7,774,000) | (16,847,000) | (22,887,000) | (43,768,000) |
COMPREHENSIVE LOSS | (7,774,000) | (16,847,000) | (22,887,000) | (43,768,000) |
Series E preferred stock accumulated dividends | (1,442,000) | (1,380,000) | (3,558,000) | (3,448,000) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (9,216,000) | $ (18,227,000) | $ (26,445,000) | $ (47,216,000) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and Diluted | 260,811,553 | 227,389,225 | 248,407,470 | 209,549,670 |
BASIC AND DILUTED LOSS PER COMMON SHARE | $ (.04) | $ (.08) | $ (.11) | $ (.23) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (22,887,000) | $ (43,768,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 2,591,000 | 3,740,000 |
Depreciation and amortization | 1,850,000 | 921,000 |
Loss on disposal of property and equipment | 0 | 14,000 |
Changes in operating assets and liabilities: | ||
Trade and other receivables | (3,024,000) | (4,786,000) |
Inventories | (17,643,000) | (7,835,000) |
Prepaid expenses and other current assets | (396,000) | (991,000) |
Other non-current assets | 233,000 | (211,000) |
Accounts payable | (1,153,000) | (4,289,000) |
Accrued clinical trial and related fees | (4,467,000) | 3,065,000 |
Accrued payroll and related expenses | (184,000) | (109,000) |
Deferred revenue | 16,337,000 | 8,788,000 |
Customer deposits | 1,998,000 | 11,070,000 |
Other accrued expenses and current liabilities | (801,000) | 610,000 |
Deferred rent, less current portion | (70,000) | (193,000) |
Net cash used in operating activities | (27,616,000) | (33,974,000) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Property and equipment acquisitions | (1,280,000) | (7,909,000) |
(Increase) decrease in other assets | (1,159,000) | 426,000 |
Net cash used in investing activities | (2,439,000) | (7,483,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock, net of issuance costs of $340,000 and $633,000, respectively | 11,604,000 | 43,498,000 |
Proceeds from issuance of Series E preferred stock, net of issuance costs of $58,000 and $1,000, respectively | 1,576,000 | 59,000 |
Proceeds from issuance of common stock under Employee Stock Purchase Plan | 254,000 | 334,000 |
Proceeds from exercise of stock options | 0 | 138,000 |
Dividends paid on Series E preferred stock | (3,198,000) | (3,103,000) |
Principal payments on capital lease | (65,000) | 0 |
Net cash provided by financing activities | 10,171,000 | 40,926,000 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (19,884,000) | (531,000) |
CASH AND CASH EQUIVALENTS, beginning of period | 61,412,000 | 68,001,000 |
CASH AND CASH EQUIVALENTS, end of period | 41,528,000 | 67,470,000 |
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accounts payable and other liabilities for purchase of property and equipment and other assets | 420,000 | 1,748,000 |
Property and equipment acquired under capital lease | $ 319,000 | $ 0 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | 9 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Common Stock [Member] | ||
Stock Issuance costs | $ 340,000 | $ 633,000 |
Series E Preferred Stock [Member] | ||
Stock Issuance costs | $ 58,000 | $ 1,000 |
1. ORGANIZATION AND BUSINESS
1. ORGANIZATION AND BUSINESS | 9 Months Ended |
Jan. 31, 2017 | |
Organization And Business | |
ORGANIZATION AND BUSINESS | We are a biopharmaceutical company committed to improving the lives of patients by manufacturing pharmaceutical products through our wholly-owned subsidiary Avid Bioservices, Inc. (“Avid”), a contract development and manufacturing organization (“CDMO”) and through advancing and licensing our novel, development-stage immunotherapy products. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jan. 31, 2017 | |
Accounting Policies [Abstract] | |
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, 2016. The condensed consolidated balance sheet at April 30, 2016 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 and assumptions. Liquidity and Financial Condition At January 31, 2017, we had $41,528,000 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 until at least the fiscal year ending April 30, 2018 before we believe we can generate sufficient revenue from Avid’s contract manufacturing services to achieve profitability. Therefore, unless and until we are able to generate sufficient revenue from Avid’s contract manufacturing services or from the sale or licensing of our product candidates under development, we expect such losses to continue through at least the fiscal year ending April 30, 2018. Our ability to continue to fund our operations 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) generating additional revenue from Avid, or (iii) licensing or partnering our product candidates in development. Historically, we have funded a significant portion of our operations through the issuance of equity. During the nine months ended January 31, 2017, we raised $11,944,000 in aggregate gross proceeds from the sale of shares of our common stock and raised an additional $1,634,000 in aggregate gross proceeds from the sale of shares of our 10.5% Series E Convertible Preferred Stock (the “Series E Preferred Stock”) (Note 6). Subsequent to January 31, 2017 and through March 13, 2017, we raised an additional $13,341,000 in aggregate gross proceeds from the sale of shares of our common stock (Note 11). As of March 13, 2017, $77,970,000 remained available to us under our effective shelf registration statement, which allows us from time to time to offer and sell shares of our common 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. The market demand or liquidity of our common stock is subject to a number of risks and uncertainties, including but not limited to, negative economic conditions, adverse market conditions, adverse financial results, and negative research and development results. Furthermore, our ability to raise additional capital in the equity markets has been significantly impacted by the decline in the market price of our common stock following our announcement in February 2016 that we were discontinuing the Phase III SUNRISE trial. As a result, we have experienced a substantial decline in the amount of additional capital that we have been able to raise from the sale of shares of our common stock as compared to recent fiscal years. If the market price of our common stock does not improve significantly, we may not be able to rely on the sale of shares of our common stock to fund our operations to the extent we have in prior years. If we are unable to either (i) raise sufficient capital in the equity markets, (ii) generate additional revenue from Avid, or (iii) license or partner our products in development, or any combination thereof, we may need to delay, scale back, or eliminate some or all our research and development efforts, or restructure our operations, which may include delaying the planned expansion of our contract manufacturing business. 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 short-term investments readily convertible to cash with an initial maturity of three months or less to be cash equivalents. Restricted Cash Under the terms of two separate operating leases related to our facilities, we are required to maintain, as collateral, letters of credit during the terms of such leases. At January 31, 2017 and April 30, 2016, we had restricted cash of $600,000, in aggregate, under these letters of credit. 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, restricted cash and trade receivables. We maintain our cash and restricted 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 and restricted cash balances to the extent of the cash and restricted cash amounts recorded on the accompanying interim 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. At January 31, 2017 and April 30, 2016, approximately 98% of our trade receivables were due from four 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 drug’s 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 our contract manufacturing services provided by Avid. We recognize revenue in accordance with the authoritative guidance for revenue recognition 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 seller’s 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 elements. Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer or licensing partner. When deliverables are separable, consideration received is allocated among the separate units based on their respective fair values, and the applicable revenue recognition criteria are applied to each of the separate units, which may require the use of significant judgement. Deliverables are considered separate units of accounting if (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) 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. Contract Manufacturing Revenue Revenue associated with contract manufacturing services provided by Avid is recognized when all four of the aforementioned revenue recognition criteria have been met. For arrangements that include multiple elements, we follow the authoritative guidance for revenue recognition regarding arrangements with multiple deliverables, as described above. On occasion, we receive requests from customers to hold product manufactured by Avid on a “bill-and-hold” basis. Revenue is recognized for such “bill-and-hold” arrangements in accordance with the authoritative guidance, which requires, among other things, the existence of a valid business purpose for the arrangement; the “bill-and-hold” arrangement is at the request of the customer; title and risk of ownership must pass to the customer; the product is complete and ready for shipment; a fixed delivery date that is reasonable and consistent with the customer’s business practices; the product has been separated from our inventory; and no further performance obligations by us 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 or customer deposits 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. Impairment Long-lived assets are reviewed for impairment in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable. Long-lived assets are reported at the lower of carrying amount or fair value less cost to sell. For the nine months ended January 31, 2017 and 2016, there was no impairment of the value of our long-lived assets. Fair Value Measurements 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 unadjusted 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 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 January 31, 2017 and April 30, 2016, we do not have any Level 2 or Level 3 financial assets or liabilities and our 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 Avid’s 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 nine months ended January 31, 2017 and 2016. 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. As of January 31, 2017, 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 recalculated 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 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 are 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 nine months ended January 31, 2017 and 2016. The calculation of weighted average diluted shares outstanding for the three and nine-month periods ended January 31, 2017 and 2016 excludes the dilutive effect of the following weighted average outstanding stock options and shares of common stock expected to be issued under our ESPP as their impact are anti-dilutive during periods of net loss: Three Months Ended January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Stock Options – 2,012,239 – 2,189,915 ESPP 36,384 16,932 193,627 61,817 Total 36,384 2,029,171 193,627 2,251,732 The calculation of weighted average diluted shares outstanding for the three and nine-month periods ended January 31, 2017 and 2016 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 January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Stock Options 29,617,509 19,129,031 29,095,476 15,800,281 Warrants 273,280 273,280 273,280 273,280 Series E Preferred Stock 13,851,483 13,260,355 13,636,759 13,249,024 Total 43,742,272 32,662,666 43,005,515 29,322,585 Subsequent to January 31, 2017 and through March 13, 2017, we sold an aggregate of 26,581,596 shares of our common stock (Note 11), which are not included in the calculation of basic and dilutive net loss per common share for the three and nine months ended January 31, 2017. 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 March, April, May and December 2016, the FASB issued ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12 and ASU No. 2016-20, respectively, which provide further revenue recognition guidance related to principal versus agent considerations, performance obligations and licensing, and narrow-scope improvements and practical expedients. ASU No. 2016-10, ASU No. 2016-12 and ASU No. 2016-20 In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern 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 In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718). ASU No. 2016-09 changes certain aspects of accounting for share-based payments to employees and involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Specifically, ASU No. 2016-09 requires that all income tax effects of share-based awards be recognized as income tax expense or benefit in the reporting period in which they occur. Additionally, ASU No. 2016-09 amends existing guidance to allow forfeitures of share-based awards to be recognized as they occur. Previous guidance required that share-based compensation expense include an estimate of forfeitures. ASU No. 2016-09 is effective for annual and interim periods beginning after December 15, 2016, which will be our fiscal year 2018 beginning May 1, 2017. Early adoption is permitted. We are currently evaluating the impact the adoption of ASU No. 2016-09 will have on our consolidated financial statements and related disclosures. In November 2016, FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash |
3. TRADE AND OTHER RECEIVABLES
3. TRADE AND OTHER RECEIVABLES | 9 Months Ended |
Jan. 31, 2017 | |
Receivables [Abstract] | |
TRADE AND OTHER RECEIVABLES | Trade receivables are recorded at the invoiced amount net of an allowance for doubtful accounts, if necessary. Other receivables are reported at amounts expected to be collected net of an allowance for doubtful accounts, if necessary. Trade and other receivables consist of the following: January 31, 2017 April 30, 2016 Trade receivables (1) $ 5,645,000 $ 2,494,000 Other receivables 238,000 365,000 Total trade and other receivables $ 5,883,000 $ 2,859,000 ______________ (1) 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 January 31, 2017 and April 30, 2016, we determined that no allowance for doubtful accounts was necessary with respect to our trade and other receivables. |
4. PROPERTY AND EQUIPMENT
4. PROPERTY AND EQUIPMENT | 9 Months Ended |
Jan. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
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. Property and equipment, net, consists of the following: January 31, 2017 April 30, 2016 Leasehold improvements $ 20,048,000 $ 19,610,000 Laboratory equipment 10,740,000 10,257,000 Furniture, fixtures, office equipment and software 4,684,000 4,045,000 Total property and equipment 35,472,000 33,912,000 Less accumulated depreciation and amortization (11,329,000 ) (9,610,000 ) Total property and equipment, net $ 24,143,000 $ 24,302,000 Depreciation and amortization expense for the three and nine months ended January 31, 2017 was $631,000 and $1,850,000, respectively. Depreciation and amortization expense for the three and nine months ended January 31, 2016 was $464,000 and $921,000, respectively. |
5. INVENTORIES
5. INVENTORIES | 9 Months Ended |
Jan. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | Inventories are recorded at the lower of cost or market (net realizable value) 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: January 31, 2017 April 30, 2016 Raw materials $ 13,263,000 $ 10,911,000 Work-in-process 20,566,000 5,275,000 Total inventories $ 33,829,000 $ 16,186,000 |
6. STOCKHOLDERS' EQUITY
6. STOCKHOLDERS' EQUITY | 9 Months Ended |
Jan. 31, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | Sales of Common Stock and Preferred Stock Our ability to continue to fund our operations 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. Sale of Common Stock During the nine months ended January 31, 2017, we issued shares of our common stock under the following agreements: AMI Sales Agreement Equity Distribution Agreement Sale of Series E Preferred Stock Series E AMI Sales Agreement Series E Preferred Stock Dividends The following table summarizes the Series E Preferred Stock dividend payments for the nine months ended January 31, 2017: Declaration Date Dividend Per Share Annualized Percentage Rate Liquidation Preference Total Dividends Paid Accrual Period Record Date Payment Date 6/2/2016 $ 0.65625 10.50% $ 25.00 $ 1,036,000 4/1/2016 – 6/30/2016 6/17/2016 7/1/2016 9/6/2016 $ 0.65625 10.50% $ 25.00 $ 1,081,000 7/1/2016 – 9/30/2016 9/16/2016 10/3/2016 12/6/2016 $ 0.65625 10.50% $ 25.00 $ 1,081,000 10/1/2016 – 12/31/2016 12/16/2016 1/3/2017 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 January 31, 2017, 271,068,464 shares of our common stock were issued and outstanding. In addition, our common stock outstanding as of January 31, 2017 excluded the following shares of our common stock reserved for future issuance: · 39,500,077 shares of common stock reserved for issuance under outstanding option grants and available for issuance under our stock incentive plans; · 10,520,626 shares of common stock reserved for and available for issuance under our Employee Stock Purchase Plan; · 273,280 shares of common stock issuable upon exercise of outstanding warrants; and · 47,785,040 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 our 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 13,731,333 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 our common stock, representing the Share Cap. |
7. EQUITY COMPENSATION PLANS
7. EQUITY COMPENSATION PLANS | 9 Months Ended |
Jan. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY COMPENSATION PLANS | Stock Incentive Plans As of January 31, 2017, we had an aggregate of 39,500,077 shares of our common stock reserved for issuance under our stock incentive plans, of which, 29,467,870 shares were subject to outstanding options and 10,032,207 shares were available for future grants of share-based awards. The following summarizes our stock option transaction activity for the nine months ended January 31, 2017: Stock Options Shares Weighted Average Exercisable Price Outstanding, May 1, 2016 23,751,261 $ 1.48 Granted 7,050,631 $ 0.49 Exercised – – Canceled or expired (1,334,022 ) $ 1.18 Outstanding, January 31, 2017 29,467,870 $ 1.26 Employee Stock Purchase Plan We have reserved a total of 15,000,000 shares of our common stock to be purchased under our ESPP, of which 10,520,626 shares remained available to purchase at January 31, 2017. 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 nine months ended January 31, 2017, 888,033 shares of our common stock were purchased under the ESPP at a purchase price of $0.29 per share. Share-Based Compensation Total share-based compensation expense related to share-based awards issued under our equity compensation plans is included in the accompanying unaudited condensed consolidated statements of operations as follows: Three Months Ended January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Cost of contract manufacturing $ 23,000 $ 20,000 $ 89,000 $ 42,000 Research and development 436,000 580,000 1,252,000 1,620,000 Selling, general and administrative 410,000 683,000 1,250,000 2,078,000 Total $ 869,000 $ 1,283,000 $ 2,591,000 $ 3,740,000 Share-based compensation from: Stock options $ 815,000 $ 1,208,000 $ 2,369,000 $ 3,555,000 ESPP 54,000 75,000 222,000 185,000 $ 869,000 $ 1,283,000 $ 2,591,000 $ 3,740,000 As of January 31, 2017, the total estimated unrecognized compensation cost related to non-vested employee stock options was $3,032,000. This cost is expected to be recognized over a weighted average vesting period of 1.56 years based on current assumptions. |
8. WARRANTS
8. WARRANTS | 9 Months Ended |
Jan. 31, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS | No warrants were issued or exercised during the three and nine months ended January 31, 2017. As of January 31, 2017, 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 | 9 Months Ended |
Jan. 31, 2017 | |
Segment Reporting [Abstract] | |
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 for 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 internal drug development efforts. 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 January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Contract manufacturing services revenue $ 10,747,000 $ 6,672,000 $ 39,726,000 $ 25,574,000 Cost of contract manufacturing services 7,974,000 3,896,000 26,477,000 13,245,000 Gross profit 2,773,000 2,776,000 13,249,000 12,329,000 Revenue from products in research and development – 37,000 – 329,000 Research and development expense (5,989,000 ) (15,156,000 ) (21,580,000 ) (43,264,000 ) Selling, general and administrative expense (4,581,000 ) (4,524,000 ) (14,625,000 ) (13,839,000 ) Other income (expense), net 23,000 20,000 69,000 677,000 Net loss $ (7,774,000 ) $ (16,847,000 ) $ (22,887,000 ) $ (43,768,000 ) 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 as a percentage of total contract manufacturing services revenue: Three Months Ended January 31, Nine Months Ended January 31, Customer 2017 2016 2017 2016 Halozyme Therapeutics, Inc. 29% 64% 62% 68% Customer A 56 27 25 28 Customer B 12 – 11 – Other customers 3 9 2 4 Total 100% 100% 100% 100% In addition, during the three and nine months ended January 31, 2017 and 2016, contract manufacturing services revenue was derived solely from U.S. based customers. Revenue generated from our products in our research and development segment during the nine months ended January 31, 2016 was primarily related to license revenue recognized under certain agreements with an unrelated entity. Our long-lived assets are located in the U.S. and consist of leasehold improvements, laboratory equipment, furniture and fixtures, office equipment and software and are net of accumulated depreciation. Long-lived assets by segment consist of the following: January 31, 2017 April 30, 2016 Long-lived Assets, net: Contract manufacturing services $ 22,763,000 $ 22,783,000 Products in research and development 1,380,000 1,519,000 Total $ 24,143,000 $ 24,302,000 |
10. COMMITMENTS AND CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jan. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Operating Leases Lease # Lease Execution Date Approximate Square Footage Leased # of Buildings Occupied Initial Lease Term Expiration Date # of Options to Extend Lease Extended (1) 1 December 1998 48,000 2 12/31/27 2 12/31/37 2 May 2010 13,000 1 12/31/17 1 12/31/22 3 July 2014 42,000 1 7/31/21 2 7/31/31 4 April 2016 26,000 1 8/31/23 2 8/31/35 5 April 2016 25,000 1 8/31/23 2 8/31/35 ______________ (1) Extended lease term expiration date assumes we execute all available option(s) to extend lease in accordance with the terms of the lease agreement. During November 2016, we entered into a lease amendment to Lease #1 (per the above table) that extends the lease term through December 31, 2027 while also maintaining our two 5-year renewal options that could extend the lease term to December 31, 2037. There were no other changes to the terms of the lease agreements included in the above table as disclosed in Note 3 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended April 30, 2016. The following schedule represents our future minimum lease payments under all non-cancelable operating leases as of January 31, 2017: Fiscal Year Ending April 30,: Minimum Lease Payments 2017 (remaining three months) $ 575,000 2018 2,243,000 2019 2,086,000 2020 2,083,000 2021 2,138,000 Thereafter 7,936,000 $ 17,061,000 Legal Proceedings On October 10, 2013, a derivative and class action complaint, captioned Michaeli v. Steven W. King, et al. |
11. SUBSEQUENT EVENTS
11. SUBSEQUENT EVENTS | 9 Months Ended |
Jan. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Sale of Common Stock AMI Sales Agreement Equity Distribution Agreement Series E Preferred Stock Dividend On March 9, 2017, 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 January 1, 2017 through March 31, 2017. The cash dividend is payable on April 3, 2017 to holders of the Series E Preferred Stock of record on March 20, 2017. Operating Lease Amendment In February 2017, we entered into a lease amendment to our Lease #3 (Note 10) (the “Lease Amendment”), pursuant to which we secured approximately 42,000 square feet of additional vacant warehouse space (the “Expansion Space”) within the same building as our existing Myford biomanufacturing facility. The purpose of the Expansion Space is to expand our biomanufacturing capacity, which we believe will further support the growth of our contract manufacturing business. Under the Lease Amendment, our Myford biomanufacturing facility now encompasses approximately 84,000 square feet. The Lease Amendment also extends the initial lease term to January 31, 2027 and maintains our two 5-year renewal options that could extend the lease term to January 31, 2037. Our monthly base rent for the Expansion Space is approximately $74,000 and increases 3% annually. In addition, with respect to the Expansion Space, the Lease Amendment provides for eight (8) months of free rent and a tenant improvement allowance of $1,269,000, as defined in the Lease Amendment. |
2. SUMMARY OF SIGNIFICANT ACC18
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jan. 31, 2017 | |
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, 2016. The condensed consolidated balance sheet at April 30, 2016 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 and assumptions. |
Liquidity and Financial Condition | Liquidity and Financial Condition At January 31, 2017, we had $41,528,000 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 until at least the fiscal year ending April 30, 2018 before we believe we can generate sufficient revenue from Avid’s contract manufacturing services to achieve profitability. Therefore, unless and until we are able to generate sufficient revenue from Avid’s contract manufacturing services or from the sale or licensing of our product candidates under development, we expect such losses to continue through at least the fiscal year ending April 30, 2018. Our ability to continue to fund our operations 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) generating additional revenue from Avid, or (iii) licensing or partnering our product candidates in development. Historically, we have funded a significant portion of our operations through the issuance of equity. During the nine months ended January 31, 2017, we raised $11,944,000 in aggregate gross proceeds from the sale of shares of our common stock and raised an additional $1,634,000 in aggregate gross proceeds from the sale of shares of our 10.5% Series E Convertible Preferred Stock (the “Series E Preferred Stock”) (Note 6). Subsequent to January 31, 2017 and through March 13, 2017, we raised an additional $13,341,000 in aggregate gross proceeds from the sale of shares of our common stock (Note 11). As of March 13, 2017, $77,970,000 remained available to us under our effective shelf registration statement, which allows us from time to time to offer and sell shares of our common 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. The market demand or liquidity of our common stock is subject to a number of risks and uncertainties, including but not limited to, negative economic conditions, adverse market conditions, adverse financial results, and negative research and development results. Furthermore, our ability to raise additional capital in the equity markets has been significantly impacted by the decline in the market price of our common stock following our announcement in February 2016 that we were discontinuing the Phase III SUNRISE trial. As a result, we have experienced a substantial decline in the amount of additional capital that we have been able to raise from the sale of shares of our common stock as compared to recent fiscal years. If the market price of our common stock does not improve significantly, we may not be able to rely on the sale of shares of our common stock to fund our operations to the extent we have in prior years. If we are unable to either (i) raise sufficient capital in the equity markets, (ii) generate additional revenue from Avid, or (iii) license or partner our products in development, or any combination thereof, we may need to delay, scale back, or eliminate some or all our research and development efforts, or restructure our operations, which may include delaying the planned expansion of our contract manufacturing business. 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 short-term investments readily convertible to cash with an initial maturity of three months or less to be cash equivalents. |
Restricted Cash | Restricted Cash Under the terms of two separate operating leases related to our facilities, we are required to maintain, as collateral, letters of credit during the terms of such leases. At January 31, 2017 and April 30, 2016, we had restricted cash of $600,000, in aggregate, under these letters of credit. |
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, restricted cash and trade receivables. We maintain our cash and restricted 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 and restricted cash balances to the extent of the cash and restricted cash amounts recorded on the accompanying interim 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. At January 31, 2017 and April 30, 2016, approximately 98% of our trade receivables were due from four 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 drug’s 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 our contract manufacturing services provided by Avid. We recognize revenue in accordance with the authoritative guidance for revenue recognition 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 seller’s 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 elements. Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer or licensing partner. When deliverables are separable, consideration received is allocated among the separate units based on their respective fair values, and the applicable revenue recognition criteria are applied to each of the separate units, which may require the use of significant judgement. Deliverables are considered separate units of accounting if (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) 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. Contract Manufacturing Revenue Revenue associated with contract manufacturing services provided by Avid is recognized when all four of the aforementioned revenue recognition criteria have been met. For arrangements that include multiple elements, we follow the authoritative guidance for revenue recognition regarding arrangements with multiple deliverables, as described above. On occasion, we receive requests from customers to hold product manufactured by Avid on a “bill-and-hold” basis. Revenue is recognized for such “bill-and-hold” arrangements in accordance with the authoritative guidance, which requires, among other things, the existence of a valid business purpose for the arrangement; the “bill-and-hold” arrangement is at the request of the customer; title and risk of ownership must pass to the customer; the product is complete and ready for shipment; a fixed delivery date that is reasonable and consistent with the customer’s business practices; the product has been separated from our inventory; and no further performance obligations by us 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 or customer deposits 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. |
Impairment | Impairment Long-lived assets are reviewed for impairment in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable. Long-lived assets are reported at the lower of carrying amount or fair value less cost to sell. For the nine months ended January 31, 2017 and 2016, there was no impairment of the value of our long-lived assets. |
Fair Value Measurements | Fair Value Measurements 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 unadjusted 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 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 January 31, 2017 and April 30, 2016, we do not have any Level 2 or Level 3 financial assets or liabilities and our 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 Avid’s 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 nine months ended January 31, 2017 and 2016. 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. As of January 31, 2017, 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 recalculated 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 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 are 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 nine months ended January 31, 2017 and 2016. The calculation of weighted average diluted shares outstanding for the three and nine-month periods ended January 31, 2017 and 2016 excludes the dilutive effect of the following weighted average outstanding stock options and shares of common stock expected to be issued under our ESPP as their impact are anti-dilutive during periods of net loss: Three Months Ended January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Stock Options – 2,012,239 – 2,189,915 ESPP 36,384 16,932 193,627 61,817 Total 36,384 2,029,171 193,627 2,251,732 The calculation of weighted average diluted shares outstanding for the three and nine-month periods ended January 31, 2017 and 2016 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 January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Stock Options 29,617,509 19,129,031 29,095,476 15,800,281 Warrants 273,280 273,280 273,280 273,280 Series E Preferred Stock 13,851,483 13,260,355 13,636,759 13,249,024 Total 43,742,272 32,662,666 43,005,515 29,322,585 Subsequent to January 31, 2017 and through March 13, 2017, we sold an aggregate of 26,581,596 shares of our common stock (Note 11), which are not included in the calculation of basic and dilutive net loss per common share for the three and nine months ended January 31, 2017. |
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 March, April, May and December 2016, the FASB issued ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12 and ASU No. 2016-20, respectively, which provide further revenue recognition guidance related to principal versus agent considerations, performance obligations and licensing, and narrow-scope improvements and practical expedients. ASU No. 2016-10, ASU No. 2016-12 and ASU No. 2016-20 In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern 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 In February 2016, the FASB issued ASU No. 2016-02, Leases In March 2016, FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718). ASU No. 2016-09 changes certain aspects of accounting for share-based payments to employees and involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Specifically, ASU No. 2016-09 requires that all income tax effects of share-based awards be recognized as income tax expense or benefit in the reporting period in which they occur. Additionally, ASU No. 2016-09 amends existing guidance to allow forfeitures of share-based awards to be recognized as they occur. Previous guidance required that share-based compensation expense include an estimate of forfeitures. ASU No. 2016-09 is effective for annual and interim periods beginning after December 15, 2016, which will be our fiscal year 2018 beginning May 1, 2017. Early adoption is permitted. We are currently evaluating the impact the adoption of ASU No. 2016-09 will have on our consolidated financial statements and related disclosures. In November 2016, FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash |
2. SUMMARY OF SIGNIFICANT ACC19
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICY (Tables) | 9 Months Ended |
Jan. 31, 2017 | |
ESPP [Member] | |
Schedule of antidilutive shares | Three Months Ended January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Stock Options – 2,012,239 – 2,189,915 ESPP 36,384 16,932 193,627 61,817 Total 36,384 2,029,171 193,627 2,251,732 |
Stock Options, Warrants, and Series E Preferred Stock (assuming the if-converted method) [Member] | |
Schedule of antidilutive shares | Three Months Ended January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Stock Options 29,617,509 19,129,031 29,095,476 15,800,281 Warrants 273,280 273,280 273,280 273,280 Series E Preferred Stock 13,851,483 13,260,355 13,636,759 13,249,024 Total 43,742,272 32,662,666 43,005,515 29,322,585 |
3. TRADE AND OTHER RECEIVABLES
3. TRADE AND OTHER RECEIVABLES (Tables) | 9 Months Ended |
Jan. 31, 2017 | |
Receivables [Abstract] | |
Trade and other receivables | January 31, 2017 April 30, 2016 Trade receivables (1) $ 5,645,000 $ 2,494,000 Other receivables 238,000 365,000 Total trade and other receivables $ 5,883,000 $ 2,859,000 ______________ (1) |
4. PROPERTY AND EQUIPMENT (Tabl
4. PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Jan. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | January 31, 2017 April 30, 2016 Leasehold improvements $ 20,048,000 $ 19,610,000 Laboratory equipment 10,740,000 10,257,000 Furniture, fixtures, office equipment and software 4,684,000 4,045,000 Total property and equipment 35,472,000 33,912,000 Less accumulated depreciation and amortization (11,329,000 ) (9,610,000 ) Total property and equipment, net $ 24,143,000 $ 24,302,000 |
5. INVENTORIES (Tables)
5. INVENTORIES (Tables) | 9 Months Ended |
Jan. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | January 31, 2017 April 30, 2016 Raw materials $ 13,263,000 $ 10,911,000 Work-in-process 20,566,000 5,275,000 Total inventories $ 33,829,000 $ 16,186,000 |
6. STOCKHOLDERS' EQUITY (Tables
6. STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Jan. 31, 2017 | |
Equity [Abstract] | |
Schedule of dividends declared and paid | Declaration Date Dividend Per Share Annualized Percentage Rate Liquidation Preference Total Dividends Paid Accrual Period Record Date Payment Date 6/2/2016 $ 0.65625 10.50% $ 25.00 $ 1,036,000 4/1/2016 – 6/30/2016 6/17/2016 7/1/2016 9/6/2016 $ 0.65625 10.50% $ 25.00 $ 1,081,000 7/1/2016 – 9/30/2016 9/16/2016 10/3/2016 12/6/2016 $ 0.65625 10.50% $ 25.00 $ 1,081,000 10/1/2016 – 12/31/2016 12/16/2016 1/3/2017 |
7. EQUITY COMPENSATION PLANS (T
7. EQUITY COMPENSATION PLANS (Tables) | 9 Months Ended |
Jan. 31, 2017 | |
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, 2016 23,751,261 $ 1.48 Granted 7,050,631 $ 0.49 Exercised – – Canceled or expired (1,334,022 ) $ 1.18 Outstanding, January 31, 2017 29,467,870 $ 1.26 |
Share-based compensation expense | Three Months Ended January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Cost of contract manufacturing $ 23,000 $ 20,000 $ 89,000 $ 42,000 Research and development 436,000 580,000 1,252,000 1,620,000 Selling, general and administrative 410,000 683,000 1,250,000 2,078,000 Total $ 869,000 $ 1,283,000 $ 2,591,000 $ 3,740,000 Share-based compensation from: Stock options $ 815,000 $ 1,208,000 $ 2,369,000 $ 3,555,000 ESPP 54,000 75,000 222,000 185,000 $ 869,000 $ 1,283,000 $ 2,591,000 $ 3,740,000 |
9. SEGMENT REPORTING (Tables)
9. SEGMENT REPORTING (Tables) | 9 Months Ended |
Jan. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment information | Three Months Ended January 31, Nine Months Ended January 31, 2017 2016 2017 2016 Contract manufacturing services revenue $ 10,747,000 $ 6,672,000 $ 39,726,000 $ 25,574,000 Cost of contract manufacturing services 7,974,000 3,896,000 26,477,000 13,245,000 Gross profit 2,773,000 2,776,000 13,249,000 12,329,000 Revenue from products in research and development – 37,000 – 329,000 Research and development expense (5,989,000 ) (15,156,000 ) (21,580,000 ) (43,264,000 ) Selling, general and administrative expense (4,581,000 ) (4,524,000 ) (14,625,000 ) (13,839,000 ) Other income (expense), net 23,000 20,000 69,000 677,000 Net loss $ (7,774,000 ) $ (16,847,000 ) $ (22,887,000 ) $ (43,768,000 ) |
Customer Revenue | Three Months Ended January 31, Nine Months Ended January 31, Customer 2017 2016 2017 2016 Halozyme Therapeutics, Inc. 29% 64% 62% 68% Customer A 56 27 25 28 Customer B 12 – 11 – Other customers 3 9 2 4 Total 100% 100% 100% 100% |
Long-lived assets by segment | January 31, 2017 April 30, 2016 Long-lived Assets, net: Contract manufacturing services $ 22,763,000 $ 22,783,000 Products in research and development 1,380,000 1,519,000 Total $ 24,143,000 $ 24,302,000 |
10. COMMITMENTS AND CONTINGEN26
10. COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Jan. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating leases | Lease # Lease Execution Date Approximate Square Footage Leased # of Buildings Occupied Initial Lease Term Expiration Date # of Options to Extend Lease Extended (1) 1 December 1998 48,000 2 12/31/27 2 12/31/37 2 May 2010 13,000 1 12/31/17 1 12/31/22 3 July 2014 42,000 1 7/31/21 2 7/31/31 4 April 2016 26,000 1 8/31/23 2 8/31/35 5 April 2016 25,000 1 8/31/23 2 8/31/35 ______________ (1) Extended lease term expiration date assumes we execute all available option(s) to extend lease in accordance with the terms of the lease agreement. |
Schedule of future minimum lease payments | Fiscal Year Ending April 30,: Minimum Lease Payments 2017 (remaining three months) $ 575,000 2018 2,243,000 2019 2,086,000 2020 2,083,000 2021 2,138,000 Thereafter 7,936,000 $ 17,061,000 |
2. SUMMARY OF SIGNIFICANT ACC27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares) - shares | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 43,742,272 | 32,662,666 | 43,005,515 | 29,322,585 |
Stock Options [Member] | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 29,617,509 | 19,129,031 | 29,095,476 | 15,800,281 |
Due to loss position [Member] | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 36,384 | 2,029,171 | 193,627 | 2,251,732 |
Due to loss position [Member] | Stock Options [Member] | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 0 | 2,012,239 | 0 | 2,189,915 |
Due to loss position [Member] | ESPP [Member] | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 36,384 | 16,932 | 193,627 | 61,817 |
2. SUMMARY OF SIGNIFICANT ACC28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive If-Converted) - shares | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 43,742,272 | 32,662,666 | 43,005,515 | 29,322,585 |
Stock Options [Member] | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 29,617,509 | 19,129,031 | 29,095,476 | 15,800,281 |
Warrants [Member] | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 273,280 | 273,280 | 273,280 | 273,280 |
Series E Preferred Stock [Member] | ||||
Antidilutive shares excluded from calculation of weighted average diluted shares outstanding | 13,851,483 | 13,260,355 | 13,636,759 | 13,249,024 |
2. SUMMARY OF SIGNIFICANT ACC29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 13, 2017 | Sep. 08, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | Apr. 30, 2016 | Mar. 17, 2017 | Apr. 30, 2015 | |
Cash and cash equivalents | $ 41,528,000 | $ 67,470,000 | $ 61,412,000 | $ 68,001,000 | |||
Restricted cash pledged as collateral for letters of credit | 600,000 | $ 600,000 | |||||
Asset impairment charges | $ 0 | $ 0 | |||||
Subsequent Event [Member] | |||||||
Amount remaining under shelf registration statement | $ 77,970,000 | ||||||
Accounts Receivable [Member] | Four Customers [Member] | |||||||
Concentration percentage | 98.00% | 98.00% | |||||
Common Stock [Member] | |||||||
Gross proceeds from issuance of equity | $ 11,944,000 | ||||||
Common Stock [Member] | Subsequent Event [Member] | |||||||
Gross proceeds from issuance of equity | $ 13,341,000 | ||||||
Stock issued new, shares | 26,581,596 | ||||||
Series E Preferred Stock [Member] | |||||||
Gross proceeds from issuance of equity | $ 1,634,000 |
3. TRADE AND OTHER RECEIVABLE30
3. TRADE AND OTHER RECEIVABLES (Details) - USD ($) | Jan. 31, 2017 | Apr. 30, 2016 | |
Receivables [Abstract] | |||
Trade receivables | [1] | $ 5,645,000 | $ 2,494,000 |
Other receivables, net | 238,000 | 365,000 | |
Total trade and other receivables, net | $ 5,883,000 | $ 2,859,000 | |
[1] | Represents amounts billed for contract manufacturing services provided by Avid. |
3. TRADE AND OTHER RECEIVABLE31
3. TRADE AND OTHER RECEIVABLES (Details Narrative) - USD ($) | Jan. 31, 2017 | Apr. 30, 2016 |
Receivables [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
4. PROPERTY AND EQUIPMENT (Deta
4. PROPERTY AND EQUIPMENT (Details) - USD ($) | Jan. 31, 2017 | Apr. 30, 2016 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 20,048,000 | $ 19,610,000 |
Laboratory equipment | 10,740,000 | 10,257,000 |
Furniture, fixtures, office equipment and software | 4,684,000 | 4,045,000 |
Total property and equipment | 35,472,000 | 33,912,000 |
Less accumulated depreciation and amortization | (11,329,000) | (9,610,000) |
Total property and equipment, net | $ 24,143,000 | $ 24,302,000 |
4. PROPERTY AND EQUIPMENT (De33
4. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization | $ 631,000 | $ 464,000 | $ 1,850,000 | $ 921,000 |
5. INVENTORIES (Details)
5. INVENTORIES (Details) - USD ($) | Jan. 31, 2017 | Apr. 30, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 13,263,000 | $ 10,911,000 |
Work-in-process | 20,566,000 | 5,275,000 |
Total inventories | $ 33,829,000 | $ 16,186,000 |
6. STOCKHOLDERS' EQUITY (Detail
6. STOCKHOLDERS' EQUITY (Details - Dividends) - Series E Preferred Stock [Member] | 9 Months Ended |
Jan. 31, 2017USD ($)$ / shares | |
June 2, 2016 [Member] | |
Declaration date | Jun. 2, 2016 |
Dividend per share | $ / shares | $ 0.65625 |
Annualized percentage rate | 10.50% |
Liquidation preference | $ 25 |
Total dividends paid | $ 1,036,000 |
Accrual period | 4/1/2016-6/30/2016 |
Record date | Jun. 17, 2016 |
Payment date | Jul. 1, 2016 |
September 6, 2016 [Member] | |
Declaration date | Sep. 6, 2016 |
Dividend per share | $ / shares | $ 0.65625 |
Annualized percentage rate | 10.50% |
Liquidation preference | $ 25 |
Total dividends paid | $ 1,081,000 |
Accrual period | 7/1/2016-9/30/2016 |
Record date | Sep. 16, 2016 |
Payment date | Oct. 3, 2016 |
December 6, 2016 [Member] | |
Declaration date | Dec. 6, 2016 |
Dividend per share | $ / shares | $ 0.65625 |
Annualized percentage rate | 10.50% |
Liquidation preference | $ 25 |
Total dividends paid | $ 1,081,000 |
Accrual period | 10/1/2016-12/31/2016 |
Record date | Dec. 16, 2016 |
Payment date | Jan. 3, 2017 |
6. STOCKHOLDERS' EQUITY (Deta36
6. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |
Sep. 08, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
Stock Incentive Plans [Member] | |||
Shares reserved for future issuance | 39,500,077 | ||
ESPP [Member] | |||
Shares reserved for future issuance | 10,520,626 | ||
Warrants [Member] | |||
Shares reserved for future issuance | 273,280 | ||
Common Stock [Member] | |||
Proceeds from issuance of stock | $ 11,944,000 | ||
Commissions and other issuance costs | $ 340,000 | $ 633,000 | |
Common Stock [Member] | August 2015 AMI Sales Agreement [Member] | |||
Shares issued, new | 23,167,349 | ||
Proceeds from issuance of stock | $ 8,028,000 | ||
Commissions and other issuance costs | 228,000 | ||
Remaining Aggregate Gross Proceeds Available Under Agreement | $ 14,525,000 | ||
Common Stock [Member] | Equity Distribution Agreement [Member] | |||
Shares issued, new | 10,082,597 | ||
Proceeds from issuance of stock | $ 3,916,000 | ||
Commissions and other issuance costs | 112,000 | ||
Remaining Aggregate Gross Proceeds Available Under Agreement | $ 9,115,000 | ||
Series E Preferred Stock [Member] | |||
Shares reserved for future issuance | 47,785,040 | ||
If converted, Series E Preferred stock holders would receive shares of common stock. Common shares to be issued | 13,731,333 | ||
Each outstanding share that could be converted into common shares | 29 | ||
Proceeds from issuance of stock | $ 1,634,000 | ||
Commissions and other issuance costs | $ 58,000 | $ 1,000 | |
Series E Preferred Stock [Member] | June 2014 Series E AMI Sales Agreement [Member] | |||
Shares issued, new | 70,320 | ||
Gross proceeds from issuance of preferred stock | $ 1,634,000 | ||
Commissions and other issuance costs | $ 58,000 |
7. EQUITY COMPENSATION PLANS (D
7. EQUITY COMPENSATION PLANS (Details - Option activity) | 9 Months Ended |
Jan. 31, 2017$ / sharesshares | |
Number of Options | |
Number of Options Outstanding, Beginning | shares | 23,751,261 |
Number of Options Granted | shares | 7,050,631 |
Number of Options Exercised | shares | 0 |
Number of Options Cancelled or Expired | shares | (1,334,022) |
Number of Options Outstanding, Ending | shares | 29,467,870 |
Weighted Average Exercise Price | |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | $ 1.48 |
Weighted Average Exercise Price Granted | $ / shares | 0.49 |
Weighted Average Exercise Price Exercised | $ / shares | |
Weighted Average Exercise Price Canceled | $ / shares | 1.18 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 1.26 |
7. EQUITY COMPENSATION PLANS 38
7. EQUITY COMPENSATION PLANS (Details - Share based compensation) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
Share based compensation | $ 869,000 | $ 1,283,000 | $ 2,591,000 | $ 3,740,000 |
Stock Options [Member] | ||||
Share based compensation | 815,000 | 1,208,000 | 2,369,000 | 3,555,000 |
ESPP [Member] | ||||
Share based compensation | 54,000 | 75,000 | 222,000 | 185,000 |
Cost of contract manufacturing [Member] | ||||
Share based compensation | 23,000 | 20,000 | 89,000 | 42,000 |
Research and development [Member] | ||||
Share based compensation | 436,000 | 580,000 | 1,252,000 | 1,620,000 |
Selling, general and administrative [Member] | ||||
Share based compensation | $ 410,000 | $ 683,000 | $ 1,250,000 | $ 2,078,000 |
7. EQUITY COMPENSATION PLANS 39
7. EQUITY COMPENSATION PLANS (Details Narrative) | 9 Months Ended |
Jan. 31, 2017USD ($)$ / sharesshares | |
Employees [Member] | |
Unrecognized compensation cost | $ | $ 3,032,000 |
Unrecognized cost amortization period | 1 year 6 months 22 days |
ESPP [Member] | |
Shares authorized under plan | 15,000,000 |
Shares available to purchase | 10,520,626 |
Shares purchased during period | 888,033 |
Shares purchased during period, purchase price per share | $ / shares | $ 0.29 |
Stock Incentive Plans [Member] | |
Shares reserved for future issuance | 39,500,077 |
Stock Options [Member] | |
Shares reserved for future issuance | 29,467,870 |
Share-based awards [Member] | |
Shares reserved for future issuance | 10,032,207 |
8. WARRANTS (Details Narrative)
8. WARRANTS (Details Narrative) | 9 Months Ended |
Jan. 31, 2017$ / 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 | 9 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
Segment Reporting [Abstract] | ||||
Contract manufacturing services revenue | $ 10,747,000 | $ 6,672,000 | $ 39,726,000 | $ 25,574,000 |
Cost of contract manufacturing services | 7,974,000 | 3,896,000 | 26,477,000 | 13,245,000 |
Gross profit | 2,773,000 | 2,776,000 | 13,249,000 | 12,329,000 |
Revenue from products in research and development | 0 | 37,000 | 0 | 329,000 |
Research and development expense | (5,989,000) | (15,156,000) | (21,580,000) | (43,264,000) |
Selling, general and administrative expense | (4,581,000) | (4,524,000) | (14,625,000) | (13,839,000) |
Other income (expense), net | 23,000 | 20,000 | 69,000 | 677,000 |
Net loss | $ (7,774,000) | $ (16,847,000) | $ (22,887,000) | $ (43,768,000) |
9. SEGMENT REPORTING (Details -
9. SEGMENT REPORTING (Details - Percentage breakdown) - Sales Revenue, Net [Member] | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
Customer revenue as a percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Halozyme Therapeutics [Member] | ||||
Customer revenue as a percentage of revenue | 29.00% | 64.00% | 62.00% | 68.00% |
Customer A [Member] | ||||
Customer revenue as a percentage of revenue | 56.00% | 27.00% | 25.00% | 28.00% |
Customer B [Member] | ||||
Customer revenue as a percentage of revenue | 12.00% | 11.00% | ||
Other Customers [Member] | ||||
Customer revenue as a percentage of revenue | 3.00% | 9.00% | 2.00% | 4.00% |
9. SEGMENT REPORTING (Details43
9. SEGMENT REPORTING (Details - Long lived assets) - USD ($) | Jan. 31, 2017 | Apr. 30, 2016 |
Long-lived assets | $ 24,143,000 | $ 24,302,000 |
Contract Manufacturing Services [Member] | ||
Long-lived assets | 22,763,000 | 22,783,000 |
Products in research and development [Member] | ||
Long-lived assets | $ 1,380,000 | $ 1,519,000 |
10. COMMITMENTS AND CONTINGEN44
10. COMMITMENTS AND CONTINGENCIES (Details - Operating leases) | 9 Months Ended |
Jan. 31, 2017ft²Integer | |
Lease #1 [Member] | |
Lease execution date | Dec. 1, 1998 |
Approximate square footage leased | ft² | 48,000 |
Number of buildings occupied | 2 |
Initial lease term expiration date | Dec. 31, 2027 |
Number of options to extend lease | 2 |
Extended lease term expiration date | Dec. 31, 2037 |
Lease #2 [Member] | |
Lease execution date | May 1, 2010 |
Approximate square footage leased | ft² | 13,000 |
Number of buildings occupied | 1 |
Initial lease term expiration date | Dec. 31, 2017 |
Number of options to extend lease | 1 |
Extended lease term expiration date | Dec. 31, 2022 |
Lease #3 [Member] | |
Lease execution date | Jul. 1, 2014 |
Approximate square footage leased | ft² | 42,000 |
Number of buildings occupied | 1 |
Initial lease term expiration date | Jul. 31, 2021 |
Number of options to extend lease | 2 |
Extended lease term expiration date | Jul. 31, 2031 |
Lease #4 [Member] | |
Lease execution date | Apr. 1, 2016 |
Approximate square footage leased | ft² | 26,000 |
Number of buildings occupied | 1 |
Initial lease term expiration date | Aug. 31, 2023 |
Number of options to extend lease | 2 |
Extended lease term expiration date | Aug. 31, 2035 |
Lease #5 [Member] | |
Lease execution date | Apr. 1, 2016 |
Approximate square footage leased | ft² | 25,000 |
Number of buildings occupied | 1 |
Initial lease term expiration date | Aug. 31, 2023 |
Number of options to extend lease | 2 |
Extended lease term expiration date | Aug. 31, 2035 |
10. COMMITMENTS AND CONTINGEN45
10. COMMITMENTS AND CONTINGENCIES (Details - Minimum lease payments) | Jan. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments, remainder of fiscal year | $ 575,000 |
Future minimum lease payments, 2018 | 2,243,000 |
Future minimum lease payments, 2019 | 2,086,000 |
Future minimum lease payments, 2020 | 2,083,000 |
Future minimum lease payments, 2021 | 2,138,000 |
Future minimum lease payments, thereafter | 7,936,000 |
Future minimum lease payments | $ 17,061,000 |
11. SUBSEQUENT EVENTS (Details
11. SUBSEQUENT EVENTS (Details Narrative) | 1 Months Ended | 2 Months Ended | 9 Months Ended | ||||
Mar. 13, 2017USD ($)shares | Mar. 09, 2017$ / shares | Feb. 28, 2017USD ($)ft² | Sep. 08, 2016USD ($) | Mar. 31, 2017USD ($)shares | Jan. 31, 2017USD ($)ft² | Jan. 31, 2016USD ($) | |
Lease #3 [Member] | |||||||
Approximate square footage leased | ft² | 42,000 | ||||||
Initial lease term expiration date | Jul. 31, 2021 | ||||||
Extended lease term expiration date | Jul. 31, 2031 | ||||||
Common Stock [Member] | |||||||
Proceeds from issuance of stock | $ 11,944,000 | ||||||
Commissions and other issuance costs | 340,000 | $ 633,000 | |||||
Series E Preferred Stock [Member] | |||||||
Proceeds from issuance of stock | $ 1,634,000 | ||||||
Commissions and other issuance costs | 58,000 | $ 1,000 | |||||
Equity Distribution Agreement [Member] | Common Stock [Member] | |||||||
Proceeds from issuance of stock | 3,916,000 | ||||||
Commissions and other issuance costs | 112,000 | ||||||
Remaining Aggregate Gross Proceeds Available Under Agreement | $ 9,115,000 | ||||||
Subsequent Event [Member] | Lease #3 [Member] | |||||||
Approximate square footage leased | ft² | 84,000 | ||||||
Initial lease term expiration date | Jan. 31, 2027 | ||||||
Extended lease term expiration date | Jan. 31, 2037 | ||||||
Tenant improvement allowance | $ 1,269,000 | ||||||
Subsequent Event [Member] | Common Stock [Member] | |||||||
Proceeds from issuance of stock | $ 13,341,000 | ||||||
Stock issued new, shares | shares | 26,581,596 | ||||||
Subsequent Event [Member] | AMI Sales Agreement [Member] | Common Stock [Member] | |||||||
Proceeds from issuance of stock | $ 7,133,000 | ||||||
Stock issued new, shares | shares | 15,308,300 | ||||||
Remaining Aggregate Gross Proceeds Available Under Agreement | $ 7,190,000 | ||||||
Subsequent Event [Member] | Equity Distribution Agreement [Member] | Common Stock [Member] | |||||||
Proceeds from issuance of stock | $ 6,006,000 | ||||||
Stock issued new, shares | shares | 11,273,296 | ||||||
Remaining Aggregate Gross Proceeds Available Under Agreement | $ 3,109,000 | ||||||
Subsequent Event [Member] | Dividends Declared [Member] | Series E Preferred Stock [Member] | |||||||
Declaration Date | Mar. 9, 2017 | ||||||
Dividend per share | $ / shares | $ 0.65625 | ||||||
Annualized percentage rate | 10.50% | ||||||
Liquidation preference | $ / shares | $ 25 | ||||||
Dividends payable accrual period | 1/1/2017 - 3/31/2017 | ||||||
Record date | Mar. 20, 2017 | ||||||
Payment date | Apr. 3, 2017 |