- FY 2009 Total Revenues Increased Nearly 200% to $18.1 Million and Avid's Revenues More than Doubled to Nearly $13 Million -

- Net Loss Decreased by 41% for the Fourth Quarter and 29% for the Full Fiscal Year -

- Advances in Bavituximab and Cotara(R) Clinical Programs Highlighted by Positive Recent Data from Ongoing Phase II Studies -

TUSTIN, Calif., July 14 /PRNewswire-FirstCall/ -- Peregrine Pharmaceuticals, Inc. (Nasdaq: PPHM), today announced financial results for the fourth quarter and fiscal year (FY) 2009 ended April 30, 2009. Total revenues for the fourth quarter of FY 2009 increased to $7,867,000, compared to $901,000 for the comparable quarter in FY 2008. Total revenues for the 2009 fiscal year increased approximately 200% from $6,093,000 in FY 2008 to $18,151,000 in FY 2009, primarily from increased contract manufacturing revenues generated by Avid Bioservices, the company's wholly owned subsidiary, and increased revenues derived from the company's R&D contract with the federal government.

Avid generated manufacturing revenues of $5,009,000 for the fourth quarter of FY 2009, compared to $751,000 for the comparable prior year quarter, while full year FY 2009 manufacturing revenues more than doubled to $12,963,000, up from $5,897,000 in FY 2008. The increase in Avid revenues reflects increased manufacturing services provided to third-party customers during the quarter and the full fiscal year. In addition to manufacturing revenues, during FY 2009 Peregrine generated revenues from services provided under its government contract with the U.S. Defense Threat Reduction Agency (DTRA) to evaluate bavituximab as a potential broad spectrum treatment for viral hemorrhagic fever infections. Government contract revenues were $2,683,000 for the fourth quarter of FY 2009 and $5,013,000 for the 2009 fiscal year. Peregrine's work under the DTRA contract began during FY 2009, so there are no comparable figures for FY 2008.

Total costs and expenses in the fourth quarter of FY 2009 were $11,239,000, compared to $7,198,000 in the fourth quarter of FY 2008. Increased costs of contract manufacturing were directly driven by the increase in Avid revenues, while the increased research and development (R&D) costs were associated with increased costs incurred under the government contract. The fourth quarter increase in selling, general, and administrative (SG&A) expenses was primarily due to a one-time charge associated with a legal settlement.

Total costs and expenses for the 2009 fiscal year were $34,467,000, compared to $30,233,000 in FY 2008, an increase of 14%. Increased contract manufacturing costs directly related to the increase in Avid revenues accounted for most of the increase in total expenses. R&D expenses for FY 2009 were essentially flat compared to FY 2008, despite the fact that clinical and other development activities related to the bavituximab clinical program significantly increased. The company was able to offset costs associated with these increased R&D activities by re-focusing effort from earlier stage preclinical programs to its clinical development efforts. SG&A expenses slightly decreased two percent in FY 2009 compared to FY 2008.

Peregrine reported a consolidated net loss of $3,609,000, or $0.02 per basic and diluted share, in the fourth quarter of FY 2009, compared to a consolidated net loss of $6,159,000, or $0.03 per basic and diluted share, for the comparable period in FY 2008, a decrease of 41%. The company reported a consolidated net loss of $16,524,000, or $0.07 per basic and diluted share for FY 2009, compared to a consolidated net loss of $23,176,000, or $0.10 per basic and diluted share for FY 2008, a decrease of 29%.

"This has been a significant year of accomplishment at Peregrine as we delivered on our commitment to significantly expand and advance our bavituximab Phase II clinical program, which is already yielding encouraging data, while nearly tripling revenues and reducing our net loss by nearly 30%," said Steven W. King, president and CEO of Peregrine. "These accomplishments have allowed us to build significant value in our oncology clinical pipeline, to grow the value of our contract manufacturing business and to realize immediate value from our bavituximab anti-viral technology platform through our DTRA government contract. These achievements have created considerable momentum that we expect to maintain throughout the coming year."

Mr. King added, "We more than doubled our Avid contract manufacturing revenues and recorded more than $5 million in first-year revenues from a multi-year government contract to evaluate our bavituximab anti-viral platform for its broad spectrum potential to treat or prevent serious virus infections. At the same time, we advanced our bavituximab and Cotara clinical trials in FY 2009 while keeping R&D costs flat. These trials have already yielded very promising early results, and we are optimistic they will continue to yield positive results during the current fiscal year."

Mr. King continued, "This year we also made important progress in raising the profile of all three of our clinical programs among investors, potential partners and the medical community, and as a result, the pace of our partnering efforts has accelerated. Among the most significant developments driving this increased interest was the release of our first clinical data indicating that bavituximab may be a valuable new option for treating cancer. In three separate Phase II trials in combination with chemotherapy, bavituximab demonstrated encouraging signs of efficacy in patients with advanced breast cancer and advanced lung cancer. All three trials surpassed the requisite efficacy criteria for expansion of patient enrollment, which is now well underway. These trials, along with our Phase I bavituximab cancer study that recently completed patient enrollment, are helping to set the stage for advancing bavituximab toward later-stage clinical trials. Planning for this exciting next phase for our bavituximab oncology program has already begun."

Mr. King added, "This past year we also made significant advancements in our bavituximab and broader anti-PS anti-viral program, receiving high-profile international validation through the publication of data in the highly respected scientific journal Nature Medicine, which confirmed the anti-viral potential of bavituximab and our other anti-PS antibodies. We were also successful in completing contract negotiations with the DTRA, allowing us to expand the evaluation of our anti-PS antibodies as potential broad spectrum agents for the treatment or prevention of viral hemorrhagic fever virus infections. This contract directly or indirectly supports our bavituximab and other anti-PS technology programs and represents another significant validation for the anti-PS technology platform."

Mr. King continued, "Our Cotara clinical program continues to advance with patient enrollment nearing completion in our dose confirmation and dosimetry study in patients with recurrent glioblastoma (GBM), and enrollment exceeds the halfway mark in our Phase II trial in relapsed GBM patients. We recently presented dosimetry study data at the Society of Nuclear Medicine 2009 Annual Meeting, further confirming that Cotara specifically localizes to brain tumors at high concentrations with minimal radiation exposure to other organs, reinforcing its potential as a possible new treatment for GBM."

At April 30, 2009, Peregrine had $10 million in cash and cash equivalents, compared to $15.1 million in cash and cash equivalents at April 30, 2008. After the close of the 2009 fiscal year, Peregrine raised approximately $6.9 million in gross proceeds from the sale of common stock from its existing shelf registration. The stock was sold in an "At the Market" offering as defined in Rule 415 of the Securities Act. This stock sale involved no discounts or warrants and required only a modest commission be paid to the underwriter.

Paul Lytle, chief financial officer of Peregrine, noted, "Our 'At the Market' sales agreement has proven to be a very successful financing vehicle, allowing us to sell shares of common stock at market prices and to raise the full target amount of $7.5 million in new equity for the company at favorable terms. With the successful closing of this equity sale, Peregrine had met all the conditions to draw down the second $5 million tranche under our current loan agreement. However, we have opted not to draw down the additional debt at this time. Instead, we plan to rely on our other potential sources of capital and the projected revenues from Avid and our DTRA government contract, thereby avoiding the additional costs and future repayment of principal and interest associated with taking on additional debt. The original loan we closed last December has served its purpose by allowing us to continue our R&D programs during very tough economic conditions."

The company's FY 2009 Annual Report on Form 10-K to be filed today will include an audit opinion with a "going concern" qualification. The qualification is a statement in the audit opinion of Ernst & Young LLP, the company's independent registered public accounting firm, expressing substantial doubt, based upon Peregrine's current financial resources, as to whether the company can continue to meet its financial obligations beyond fiscal year 2010 without access to additional cash and cash equivalents. Nasdaq Marketplace Rule 4350(b) (1) (B) requires Nasdaq-listed companies to announce publicly through the news media the receipt of an audit opinion containing a "going concern" qualification.

Mr. Lytle added, "We believe Peregrine has sufficient financial resources to meet its obligations through at least FY 2010, based on a number of factors. These factors include our recent success in reinforcing the company's cash position by raising approximately $6.9 million in new equity capital in FY 2010, our projected cash-inflows from Avid manufacturing revenues and from our DTRA government contract, as well as our substantial progress in managing expenses and significantly reducing our cash burn rate. Nonetheless, there are potential uncertainties associated with these financial projections that required the company's independent registered public accounting firm to include a 'going concern' qualification in its audit opinion.