THE NUMBERS:
Three-year growth: 380.4%
12-month revenue through June: $23.3 million
12-month loss through June: $19.9 million
Recent market value: $165 million
Employees: 138, mostly in OC
Company: drug developer
Peregrine Pharmaceuticals Inc. doesn’t yet have a commercial drug on the market, but that hasn’t stopped it from growing.
Tustin-based Peregrine reached No. 1 on the Business Journal’s 2009 list of fastest-growing public companies based here by posting a 380.4% revenue growth rate for the three years ended June 30. Peregrine went from $4.9 million in revenue in the 12 months ended June 2007 to $23.3 million for the same period through this June.
Peregrine’s revenue growth has come from two major sources: government contracts and contract manufacturing for drug makers.
Last year, the Department of Defense’s Defense Threat Re-duction Agency gave Peregrine a contract worth up to $44.4 million to develop and test its bavituximab drug and another antibody as a treatment for viral hemorrhagic fever, a type of viral infection that affects members of the military in the field.
“Over the past year, that’s been (a) driver of our revenue growth,” said Steve King, Peregrine’s chief executive.
Peregrine received $324,000 from that contract last year and $4.7 million in the three months through June 30.
Peregrine’s federal contract has a two-year base period and could last for up to five years.
Peregrine’s work on bavituximab for viral hemorrhagic fever could lead to another contract to make the drug, according to King.
Peregrine also gets revenue from contract drug manufacturing through Avid Bioservices, its subsidiary. Avid makes all of Peregrine’s compounds.
In addition to Peregrine work, Avid’s customers include Swiss drug maker Roche Holding Ltd., along with smaller players such as Halozyme Therapeutics Inc. of San Diego and San Francisco-based Catalyst Biosciences Inc.
“Since (2002), we’ve been able to grow that business very nicely,” King said of Avid.
Avid gets business from existing clients, a sales force and industry conferences, he said.
Besides viral hemorrhagic fever, Peregrine is developing bavituximab as a treatment for breast and other types of cancer.
Peregrine’s other drug candidates include Cotara, which is being developed to treat a particularly aggressive form of brain cancer. Peregrine said in a federal filing that approved treatments for the disease include Avastin from Roche Hold-ing’s Genentech Inc., and Schering-Plough Corp.’s drug Temodar.
But Cotara works differently than those drugs, Peregrine said.
Bavituximab and Cotara are in mid-stage clinical trials, King said.
“We’re probably still several years from seeing those compounds at the point of regulatory approval,” King said. “Obviously, for the company as a whole, our primary goal is to develop our own products.”
Peregrine’s seen some eye-catching gains on Wall Street, partly because of its relatively low price and favorable trial results for Cotara that came out in recent weeks.
As of late September, the drug maker’s stock was up 115% for the year with a recent market value of $165 million.
But like most development-stage drug companies, Pere-grine is not profitable. The company lost $19.9 million in the 12 months through June.
It posted a net loss of $2.4 million for the three months ended July 31, narrowed from a net loss of $5.1 million for the same period a year earlier.
Peregrine said the loss was narrowed because its revenue—thanks to the federal contract payments—shot up 345% to $6.8 million.
“This decrease in our net loss is a direct result of the growing revenue we have generated, combined with the reduction in discretionary costs we have successfully achieved in many areas of our business,” said Paul Lytle, Peregrine’s chief financial officer, on an earnings call.
Peregrine had nearly $13 million in cash as of the July quarter. Lytle said that it was able to reduce its cash burn rate to slightly more than $2 million in the period.
Peregrine has 138 workers, nearly all of whom are in OC, and was established in 1981.
