Peregrine Pharmaceuticals, Inc. (Nasdaq: PPHM), a clinical stage biopharmaceutical
company developing monoclonal antibodies for the treatment of cancer and
hepatitis C virus (HCV) infection, today announced the sudden termination
of its negotiations to finalize a contract award with the Defense Threat
Reduction Agency (DTRA) of the U.S. Department of Defense (DOD) as a result
of Congressional budget cuts. These cuts dramatically reduced the program
funds available for grants from DTRA’s Transformational Medical
Technologies Initiative in the 2008 fiscal year. Peregrine’s proposal to
investigate bavituximab and other anti-phosphotidylserine (PS) antibodies
as potential therapies for hemorrhagic fever virus had been selected for a
tentative contract award under the Transformational Medical Technologies
Initiative program. The contract was in late stages of negotiation and was
expected to be signed in early 2008. In the recently passed H.R. 3222 -
Department of Defense Appropriations Act, 2008, Congress eliminated $100
million in funding for the TMTI program, a major portion of its funding
available for these types of projects. These cuts were enacted despite the
strenuous opposition of the Bush Administration.*
“We are very disappointed and shocked at this unexpected development,”
said Paul J. Lytle, CFO of Peregrine. “Just two days ago, government
auditors spent almost an entire day at our offices working diligently to
complete their third audit needed before this contract award could be
finalized. We also had recently been asked by the DTRA to accelerate the
timeline for our anti-viral studies and to request additional funds under
the TMTI program. It was therefore an unwelcome surprise to learn that
Congress has greatly reduced funding for the TMTI program in 2008, and that
as a result, this contract award is no longer feasible.”
Peregrine has been informed by its contacts at the DTRA that they
worked very hard to find alternative sources of funding for this project,
but were unable to do so in the required timeframe. Peregrine has been
encouraged to re-apply when new funding initiatives become available.
“While we are very disappointed by this sudden turn of events regarding
the potential DTRA contract, it has no impact on our continuing clinical
efforts including the development of bavituximab for the treatment of HCV
infection and cancer,” said Steven W. King, president and CEO of Peregrine.
“We appreciate the continued interest expressed from the DTRA in our
bavituximab program for viral hemorrhagic fevers and hope to be able to
pursue other government funding opportunities when they become available.
Based on recent data from our collaborators, we are more enthusiastic than
ever about the potential of our anti-PS technology platform for the
treatment of viral infections, and we see many potential applications in
this area.”
* In an October 2, 2007 statement to the Senate on the funding priorities
reflected in the Department of Defense Appropriations Act, 2008
(H.R. 3222), the Office of Management and Budget of the Executive Office
of the President wrote: “The Administration strongly opposes the $100
million reduction to the Transformational Medical Technology Initiative
(TMTI). TMTI represents an essential element of our efforts to develop
countermeasures against new biological threats, such as those that would
be engineered in a laboratory or naturally occurring agents, such as
pandemic viruses, that could have a catastrophic impact on our troops.
The program embodies the principles in the recently signed Homeland
Security Presidential Directive-18, which directs Federal agencies to
undertake efforts to combat biological threats for which we do not
currently have countermeasures. Funding of the program at the requested
level for FY 2008 is required to maintain execution of the FY 2006 and
FY 2007 innovations and to address capability gaps. A reduction of $100
million would continue to underfund this effort and dramatically reduce
the potential to develop and deliver products for transition to advanced
development by the end of FY 2010.”
About Peregrine Pharmaceuticals
Peregrine Pharmaceuticals, Inc. is a biopharmaceutical company with a
portfolio of innovative product candidates in clinical trials for the
treatment of cancer and hepatitis C virus (HCV) infection. The company is
pursuing three separate clinical programs in cancer and HCV infection with
its lead product candidates bavituximab and Cotara(R). Peregrine also has
in-house manufacturing capabilities through its wholly owned subsidiary
Avid Bioservices, Inc. (http://www.avidbio.com), which provides development
and bio-manufacturing services for both Peregrine and outside customers.
Additional information about Peregrine can be found at
http://www.peregrineinc.com.
Safe Harbor Statement: Statements in this press release which are not
purely historical, including statements regarding Peregrine
Pharmaceuticals’ intentions, hopes, beliefs, expectations, representations,
projections, plans or predictions of the future are forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act of 1995. The forward-looking statements involve risks and uncertainties
including, but not limited to, the risk that the Company will not have
another opportunity to apply for a DTRA or other federal contract or the
risk that, if able to apply, the Company may not be successful in
negotiating a contract. It is important to note that the Company’s actual
results could differ materially from those in any such forward-looking
statements. Factors that could cause actual results to differ materially
include, but are not limited to, uncertainties associated with completing
preclinical and clinical trials for our technologies; the early stage of
product development; the significant costs to develop our products as all
of our products are currently in development, preclinical studies or
clinical trials; obtaining additional financing to support our operations
and the development of our products; obtaining regulatory approval for our
technologies; anticipated timing of regulatory filings and the potential
success in gaining regulatory approval and complying with governmental
regulations applicable to our business. Our business could be affected by a
number of other factors, including the risk factors listed from time to
time in the company’s SEC reports including, but not limited to, the annual
report on Form 10-K for the year ended April 30, 2007 and the quarterly
report on Form 10-Q for the quarter ended October 31, 2007. The company
cautions investors not to place undue reliance on the forward-looking
statements contained in this press release. Peregrine Pharmaceuticals, Inc.
disclaims any obligation, and does not undertake to update or revise any
forward-looking statements in this press release.
Contacts:
GendeLLindheim BioCom Partners
Investors
info@peregrineinc.com
(800) 987-8256
Media
Barbara Lindheim
(212) 918-4650
SOURCE Peregrine Pharmaceuticals, Inc.