In an interview with Outsourcing-Pharma.com, Steve King, Peregrine CEO, explained that Avid Bioservices, Peregrine’s CDMO subsidiary, is now the company’s sole focus as it aims to transition to a pure-play CDMO.
The company is going to be changing its name to Avid Bioservices and abandoning the Peregrine label.
With the decision made, the company has hired Roger Lias as president of Avid Bioservices — the subsidiary-no-longer with 95% of the employees and all the revenue, said King.
A growing side business
Peregrine opened its first manufacturing facility in the mid-1990s to focus on internal projects. Before too long, however, the company needed little of this capacity, so it decided to open a business through which it would sell its excess capacity. This became Avid Bioservices.
Concurrently, Peregrine was continuing its product development activities, with the CDMO acting truly as a side business, said King.
However, the company reached a lack of capacity, again, as its lead immunotherapy candidate Bavituximab was about to move into Phase III. The company built a new manufacturing facility to support the internal project, but Bavituximab ultimately missed its primary endpoint, prompting the company to reevaluate its business strategy.
“[We] came to the conclusion that we have a great CDMO business and regulatory track record … and made the decision to focus on this side of the business and sell off the R&D assets,” explained King.
“Clearly, the CDMO space is a very hot area, a lot of interest and M&A activity,” he added. “We think there’s a great future.”
The future as a CDMO
Lias' first objective as the new president of Avid will be to ramp up visibility and business development, he told us. Short term, the strategy is to fully consolidate as a multi-product CDMO. As part of this, the company is currently looking to license or sell its proprietary R&D assets, including Bavituximab.
“One of the first things we’ll do is bolster our capabilities for our early phase work,” said Lias. “We need more,” he added. Beyond that, Lias said the next steps will be aligning the organization to be able to better serve multiple clients. The company will grow organically and M&A is, “of course,” a potential, he explained.
The company will also look diversify its service offerings and may deploy new “copycat” facilities, though no locations have been chosen at this time.
“The opportunities are almost endless out there at the moment,” concluded Lias.