Unknown Speaker - Robert Garnick - Head of Regulatory Affairs Joseph Shan - Vice President of Clinical & Regulatory Affairs Steven King - Chief Executive Officer, President, Director, Chief Executive Officer of Avid Bioservices Inc and President of Avid Bioservices Inc Paul Lytle - Chief Financial Officer, Principal Accounting Officer, Corporate Secretary, Chief Financial Officer of Avid Bioservices and Corporate Secretary of Avid Bioservices Jeffrey Masten - Vice President of Quality Amy Figueroa - IR, BioCom Partners Christopher Eso - Vice President of Business Operations

Joseph Pantginis - Roth Capital Partners, LLC George Zavoico - McNicoll, Lewis & Vlak LLC

Good day, ladies and gentlemen, and welcome to the Peregrine Pharmaceuticals Fourth Quarter and Fiscal Year 2011 Conference Call. I would like to remind you that today's call is being recorded. [Operator Instructions] I would now like to turn the call over to Amy Figueroa. Please go ahead.

Thanks, Huey [ph]. Good afternoon, and thank you for joining us. On today's call, we have Steve King, President and Chief Executive Officer; Paul Lytle, Chief Financial Officer; Joe Shan, Vice President of Clinical and Regulatory Affairs; Rob Garnick, Head of Regulatory Affairs; Jeff Masten, Vice President of Quality; and Chris Eso, Vice President of Business Operations. Steve will begin by providing an overview of our clinical progress over the last year and highlight upcoming milestones. Joe, Rob and Jeff will discuss our clinical, regulatory and manufacturing plans as we advance our 3 Phase II clinical programs. Chris will provide an update on Avid, our strategically integrated biomanufacturing subsidiary. And then Paul will wrap up with a review of our financial results for the fourth quarter and fiscal year 2011 and our financing strategy. After our prepared remarks, we welcome your questions, and Steve is staying up late tonight from Europe on business so we can answer them. Before we begin, we would like to remind you that during this call we will be making forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ. These forward-looking statements reflect our current views about future events and financial performance and are identified by the use of terms and phrases such as, believe, expect, plan, anticipate, on target and similar expressions identifying forward-looking statements. These risks include but are not limited to, the risk factors detailed from time to time in our filings with the Securities and Exchange Commission, including but not limited to the annual report on Form 10-K for the fiscal year ended April 30, 2011, which was filed today. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from our expectations. And we expressly do not undertake any duty to update forward-looking statements, whether as a result of new information, future events or otherwise. I'll now turn the call over to Steve.

Thanks, Amy. Fiscal year 2011 was a building year and a very important year for Peregrine. Over the last year, we have completely transformed our pipeline, reporting promising data from 5 clinical trials, launching 4 new randomized Phase II trials and kicking off 4 investigator-sponsored trials or IST. We've made significant progress in advancing our clinical programs to build for what we expect to be an even more exciting fiscal year 2012. Over the coming year, we'll continue to advance our 3 Phase II clinical programs. And we are looking forward to clinical data reports and regulatory meetings, which have the potential to be important value-driving events for our company. And as we advance our programs, we have our strategic asset, Avid Bioservices, to support our later-stage clinical trials and prepare for potential commercial launch of bavituximab and Cotara. Avid's revenues from services for its third-party clients and cost-effective manufacturing of our products both help reduce our overall burn. But beyond the financial benefits, Avid is an important strategic asset. Not many biotech companies have an integrated cGMP, commercial biomanufacturing unit, with the potential to commercially manufacture their own products, representing a significant advantage as we move our products closer to our potential launch. And to drive our programs forward into these later-stage trials to potential launch, we have expanded our teams at Peregrine and Avid, bringing on board critical expertise in clinical developments, regulatory affairs, quality assurance and manufacturing. We have some of the industry's best experts developing our strategy and executing our plans to reach our overarching goal to develop, manufacture and commercialize antibodies to treat patients with cancer and viral infections. Since our last quarterly conference call, we have continued making significant progress with our 3 Phase II clinical programs, advancing toward key clinical and regulatory milestones, while carefully managing our resources to reach these milestones. We presented data at ASCO, EASL, AACR and a leading European antibody conference. And Joe will talk more about the data presented next. Before handing the call over to Joe, I'd like to highlight some of our key upcoming clinical milestones, starting with bavituximab. As we explained in our last quarterly call, patient enrollment in clinical trials is becoming increasingly challenging on an industry-wide basis. We responded to the challenges by making amendments to our protocols and expanding the number of sites involved in our trials. And Joe will describe our efforts in greater detail next. Amending protocols takes time for investigator and regulatory agency review. But taking these steps now will help expand the potential product label for bavituximab should it become an approved product. And since amending the protocols, we've seen a noticeable uptick in patient enrollment, further supporting the importance of addressing these patient enrollment criteria during Phase II development. As a result, we have been able to build momentum and are now making good progress in completing enrollment in our 2 randomized, company-sponsored Phase II non-small cell lung cancer trials. Over the coming weeks, we expect to complete patient enrollment in our frontline trial evaluating bavituximab in combination with carboplatin and paclitaxel versus carboplatin and paclitaxel alone in 86 patients, keeping us on track to have interim data available by the end of the year and top line tumor response data available in early 2012. Our second line trial evaluating bavituximab in combination with docetaxel versus docetaxel alone in 120 patients is currently running a little behind the frontline study due to the larger size of the trial, the smaller eligible patient population and the impact of the earlier enrollment restrictions, which particularly impacted this advanced cancer patient population. The result is that enrollment has taken longer than we originally expected. Having said that, with the new protocol amendments approved and in effect at our active clinical sites, we are now making very good progress and expect to complete patient enrollment early in the fourth quarter of this year with data unblinded in the first half of next year. While we are disappointed that the study is running behind our original expected goal for patient enrollment, we believe we're moving some of the very limiting enrollment criteria was critical for our potential future clinical developments and future potential commercial efforts for this program. We will continue to push these trials to completion and look forward to updating you as we make further progress. Aside from our lung cancer trials, we have 2 additional randomized Phase II trials enrolling patients with pancreatic cancer and HCV. And we have 4 ISTs now underway in prostate, lung, liver and breast cancers. We are pleased by the investigator interest in our program and the potential for data readouts from these trials over the coming year. Switching gears to Cotara, one of the highlights for this program for us has been the promising 8.8-month median overall survival reported recently from a Phase II recurrent GBM trial, as well as the long-term survivors from all of our prior studies. As Rob will discuss later on our call, we are planning to meet with the FDA in the fourth quarter of this year and are looking to agree on a Phase III registration trial design. And we think this clarity over the registration path will really enhance the value for this program for both Peregrine and its potential partners. I'll now turn the call over to Joe for a more in-depth discussion of our clinical programs. Joe?

Thanks, Steve. I'll take a few minutes now to review our bavituximab clinical program before turning the call over to Rob to discuss our plans for Cotara. Now prior clinical trials and preclinical research point to bavituximab as a monoclonal antibody with very broad potential for treating patients with cancer or viral infections. To help realize this broad potential, we are currently conducting several randomized Phase II trials. Meanwhile, with our support through the IST program, several motivated investigators are running their own bavituximab studies in different tumor types or treatment combinations. Starting with our 2 randomized Phase II trials in non-small cell lung cancer, as Steve mentioned, we're making progress enrolling patients, opening sites and expanding into new countries to reach our enrollment goals. Doctor Kerstin Menander, our Head of Medical Oncology, and I have implemented strategies to complete patient enrollment. And we have seen patient enrollment accelerate in both trials in recent months. One of the first initiatives we implemented was modifying our protocol since we found too many patients were not meeting entry criteria. For example, our initial protocol excluded patients with any history of or even having risk factors for bleeding or coagulation issues. However, advanced cancer patients frequently have bleeding or coagulation issues. But after careful consideration and with patient safety as a primary concern, we amended several of the eligibility criteria to allow certain risk factors for existing histories of these types of events. Although protocol amendments are costly and time-consuming to implement, these changes are having a positive impact on patient accrual and may ultimately increase the number of patients that could be prescribed our therapy if bavituximab is approved. Also for the past few months, we have been working diligently to expand the number of centers enrolling lung cancer patients both within the U.S. and internationally. We anticipate opening 50% more sites than originally projected to over 30 for our frontline trial and around 45 for our second-line trial. With these enrollment initiatives in play, we are on target to complete enrollment of the last of 86 patients in our frontline trial over the coming weeks. This is an open label trial and we expect to report interim tumor response data, which is the primary endpoint by the end of this year. It's important to mention that this trial was designed based on our prior single-arm Phase II study in 49 frontline patients receiving the same therapeutic regimen of bavituximab in combination with carboplatin and paclitaxel. In that study, we initially reported a very encouraging 43% objective response rate and 6.1-month median survival -- median progression-free survival. When historical response rate with chemotherapy alone was 15% with a 4.5-month PFS. Last month, we announced the median overall survival was 12.4 months, which compares favorably with the 10.3 month historical value. We're especially pleased that all 3 efficacy readouts from that trial consistently exceeded the historical reference study evaluating carboplatin and paclitaxel alone in a similar patient population. Turning to our second-line lung cancer study. While we continue to enroll patients, we will also implement the enrollment initiatives, I mentioned earlier in this study as well. Understanding that this is a larger trial in a smaller and sicker patient population, it is even more difficult to identify and enroll patients. And though we've experienced some unexpected regulatory startup delays, which have affected our projected enrollment timelines in India and Europe, we're happy to report that we are ahead of projections in the U.S., where enrollment is typically much lower. We expect to complete enrollment of the 120 patients early in the fourth quarter of this year, which will result in unblinding data in the first half of next year. In addition to our lung cancer trials, we have 2 additional company-sponsored trials. One is a randomized Phase II trial designed to enroll up to 70 patients with previously untreated stage IV pancreatic cancer. And they are to receive gemcitabine alone or gemcitabine in combination with bavituximab. The second is our Phase II HCV trial, which will randomize up to 66 patient treatment-naive genotype 1 patients to ribavirin with either standard pegylated interferon or bavituximab. Also bavituximab's broad therapeutic potential is being evaluated by several investigators under our IST program, which now includes trials for advanced liver cancer, HER2-negative breast cancer, non- small cell lung cancer and castration-resistant prostate cancer. We're encouraged by the investigator interest in this program and the opportunity for us to gain additional clinical insight on bavituximab's use in different therapeutic combinations and oncology indications. Now before turning the call over to Rob to talk about Cotara regulatory plans, I'd like to mention the positive Cotara data, which we presented at ASCO last month. Our investigators and our team here at Peregrine were encouraged by the 8.8-month median overall survival from the current Phase II trial in recurrent GBM, which is a tremendously difficult disease to treat. What is most intriguing to us and our investigators is the long-term survivors we have seen in our trials. In the most recent study, 2 patients survived 3 years after a single treatment with Cotara, and 2 patients from an earlier study are alive still after 10 years. It's results like these that continue to inspire us to develop Cotara as a single treatment approach for this deadliest form of brain cancer. I'd like to turn the call over to Rob now.

Thanks, Joe. It's really easier to approach regulatory agencies with promising survival data and a consistent safety profile, which is exactly what we have seen from both bavituximab and Cotara in our clinical trials to date. I'm actually very excited to be working on an antibody like bavituximab with such broad therapeutic potential. But today I'll talk about our plans for Cotara, as we prepare for an FDA meeting in the fourth quarter. Let me start by saying we believe Cotara is an active drug, and it looks as good as anything else out there, in particular with the 8.8-month median overall survival and long-term survivals -- survivors that Joe just mentioned in our trials. And while the data are as good as anything else in the market, and there are fewer than a handful of products approved for patients with this terrible form of cancer, Cotara is actually very different. It is administered as a single treatment and in trials conducted to date as a single agent. I work with FDA for over 25 years now. And we've learned that by listening very closely to what the agency says and doing what the agency suggests, we increase our probability for success in our filings and approvals. And as we prepare to meet with the FDA in the fourth quarter of this year, our goal is to come away from this meeting with very specific information on what they believe would be an acceptable Phase III protocol to support registration of Cotara. On our short list of requests is negotiate a reasonable sized Phase III trial that we, ourselves, or with a potential partner would be able to enroll within 24 months. We would expect our trial design to be multicenter conducted in the U.S., in Europe and in India and to support global registration packages. We're considering requesting a SPA, or Special Protocol Assessment, from the agency, but even more importantly, we want and need to hear the FDA's thoughts on our development plans for Cotara as a new treatment approach for recurrent GBM patients. As we get closer to this FDA meeting, preparations are underway here to be ready to manufacture Cotara for the Phase III trial, as well as potential commercial launch from Avid's GMP facility. As part of being prepared for such a GMP facility and launch our product, bringing the right people on board at Peregrine to -- is necessary in order to execute this program. And I'm delighted to be working with my former colleague from Genentech, Jeff Masten, who recently joined Peregrine to lead our quality program. As we move forward in our clinical development efforts, being able to produce high-quality products is one of the major benefits that Peregrine has over other companies. We are fortunate to get -- to have gotten Jeff to join the company, and he is currently designing state-of-the-art quality systems that will put Peregrine and Avid heads above the rest of the industry. This is a collaborative effort, requiring both knowledge and integrity. And simply put, Jeff is one of the best quality professionals out there at this time, and we're extremely pleased to have him lead our quality program here. With that, I'll turn it over to Jeff.

Thanks, Rob. I appreciate the confidence that you and the team have placed in me. I have to add that I'm very impressed by Peregrine's recognition of the importance of a quality function and in bringing onboard the right expertise at the right time in drug development. Preparing for successful preapproval inspections and commercial launch is critical. And I'm excited to join the team that has aligned in our mission to develop and commercialize products for patients with cancer and viral infections. I recall the most exciting time in my career was leading the launch teams at Genentech for 4 different products including Avastin. The preapproval inspection for Avastin was the last step in our process that we have laid out for the organization to follow. We had regulatory agents inspecting for weeks and have provided hourly updates to Rob down to the last minute when we knew we had successfully prepared for launch. When we received the faxed approval from FDA, I walked it over to the quality team, which was waiting to release the product. From there, the product was sent to the distribution centers for the patients. The first patient could have access to Avastin. We managed to commercialize the products available for patients within 6 hours after approval. From fax to patient in 6 hours is simply unprecedented in the pharmaceutical industry. Our initial mission was to reach patients in a week. We said our patients to deserve better. I'm looking forward to repeating this inspiring experience here with 2 potential launches for Peregrine and additional products for Avid's clients. But there's a lot of planning and execution that needs to take place as we drive toward these goal lines, and we have a great team that is truly dedicated to making a difference for our patients. We are working on developing GMP-compliant, best-in-class quality systems at Peregrine and Avid. Once that will all [ph] be scalable to meet the needs of our business today, tomorrow and 5 years from now. Before I turn the call over to Chris, I'd like to emphasize the importance of developing good relationships with our regulatory agencies early in the development and early in the registration process. Working with Rob and Joe and the rest of the team as we execute integrated clinical, regulatory and manufacturing plans for bavituximab and Cotara, we're setting the stage for enabling future Phase III clinical trials as well as potential product launch, and I'm excited to be a part of leading this effort. Chris?

Thanks, Jeff. We're definitely excited to have such a quality expert like yourself on board, not only for Peregrine but also for our clients. As Steve explained earlier, Avid is a strategically integrated biomanufacturing asset for Peregrine. Having built-in GMP biomanufacturing services, Avid makes it possible for Peregrine to conduct its current company- and investigator-sponsored trials. But we will also enable Peregrine's later-stage trials and position Peregrine for potential commercial launch of bavituximab and Cotara. Over the last year, we have made significant strides in our manufacturing productivity for Peregrine and our clients. A great example of this is how Avid demonstrated comparability between our 1,000 liter Single-use Bioreactor and our traditional 1,000 liter stainless steel bioreactor for one of our products. This side-by-side comparability between stainless steel and single-use technology might very well be one of the first of its kind to gain acceptance by the FDA, ultimately allowing us more productivity, flexibility and have a scalable manufacturing process to support potential commercial launch. Having integrated manufacturing capabilities also helped reduce Peregrine's overall cash burns: First, by manufacturing at a lower cost than outside activities could provide; and second, by generating revenue from the services we provide to our clients. For the fourth quarter of fiscal year 2011, our contract manufacturing revenue was approximately $2 million, and for the full year we came in within our guidance at $8.5 million. As you can see from our financial statements, we also earned -- ended the year with an unusually high deferred revenue amount of $5.6 million, all of which was work performed during the fiscal year 2011. However, due to the timing fluctuations of manufacturing lot release, it will be recognized in the coming year when revenue is recognized. Now turning to fiscal 2012. We expect revenues to be in line with our fiscal 2011. Before turning the call over to Paul, I'd like to share that we are continuing to service our current clients and are starting to work on several new projects. On our -- on the -- excuse me, on our anchor client front, we already manufacture one commercial product for Halozyme, along with other commercial products for them. Additionally, we've been working with Halozyme as well as another anchor client as they approach their BLA filings, which will have -- which we will have the potential to be 2 additional commercial products in our facility, firming up our base business. On the new client front, 2011 represented a great year for us. We secured 3 new clients during the year. Let me highlight some of those. We've made very good progress on the new biosimilar project we secured at the end of last year and have started to transition it from development into manufacturing. We are in the final stages of GMP production for Affitech and have completed all of those runs successfully. And lastly, we have started to work on a new client project in transferring their Phase II product candidate in while this will position us for potential Phase III and commercial production over the coming years, providing a third anchor client. As you can see, we have made some great strides on the new client front as well as positioning us for future with other -- with our anchor clients. Additionally we have numerous new client opportunities in our pipeline that we are cultivating to hopefully continue our momentum into 2012 and beyond. We look forward to a productive, upcoming fiscal year and to continuing to advance our business. With that I will turn the call over to Paul.

Thanks, Chris. Since our financial results for the fourth quarter of fiscal year 2011 can be found in our press release and Form 10-K filing, I would like to spend the next few moments reviewing our financial goals and strategy as they support our overall product development goals. As the team just mentioned, advancing both bavituximab and Cotara towards commercialization is our top priority. And to achieve this, our investments in these technologies must be closely aligned with our various sources of capital. Over the past several quarters, we have continued to invest in our clinical programs towards what we believe could be major value inflection points for Peregrine over the coming months. And we have achieved this clinical progress while maintaining a stable cash position of $23 million as of our current fiscal year end. This compares to $19.7 million in cash we reported a year earlier. During fiscal year 2011, we had several sources of capital, including $8.5 million in contract manufacturing revenue from Avid, $5.6 million from government sources, and from the capital markets, we raised over $33 million in net proceeds over the last fiscal year under a cost effective and warrant free financing vehicle called an At-the-Market, or ATM program. And as the name implies, we are selling these shares at market prices. We have used this vehicle to bring institutional investors into our stock. And over the past 18 months, we increased our institutional ownership in a significant way. Our goal is to continue this momentum with institutional investors as our clinical programs advance and our clinical data mature. In addition to these sources of capital, it's important to emphasize that our later-stage clinical assets, bavituximab and Cotara, remain mostly unencumbered. And these lead product candidates represent an important source of potential future capital. As we get closer to generating randomized Phase II data for bavituximab and have in hand a Phase III registration path for Cotara, we believe a great amount of value will be added to these programs, value for Peregrine as well as value for potential partners. Before opening up the call to questions, I want to reiterate that our goal is to continue to maintain a balanced financial approach with multiple sources of capital and to carefully manage our operations. Advancing bavituximab and Cotara towards these important clinical milestones over the coming fiscal year is our #1 priority. Over the last several quarters, we have closely matched our investments in our clinical programs with our different sources of available capital, and we look forward to keeping you updated on our progress. We would now like to open up the call for your questions. Operator?

[Operator Instructions] Our first questioner in queue is Joe Pantginis with Roth Capital. Joseph Pantginis - Roth Capital Partners, LLC: Two questions, if you don't mind. First, I'd like to go to highlight the recent survival data, encouraging survival data, that you recently released for bavituximab. Would you be able to then look to correlate that with response rates? And specifically, obviously, there've been prior oncology studies for other drugs and companies where the response rates don't necessarily correlate with survival. So maybe if you could just give us a little perspective on where this survival number fits in the treatment armamentarium that's currently out there, and then also look to correlate it with the responses that you've seen.

Sure, Joe. First of all thanks for the question. I think, really, kind of the median overall survival data, when the final numbers came out, I think really were very pleasing for the company, I think. In particular, I think it hit the nail on the head because it's really unusual to have kind of the trifecta of really strong tumor response data, good progression presurvival data and then actually have that match up with the good numbers we saw in the median overall survival. So I think it was the continuity of the data which really gave us a little extra boost there and a lot more confidence in the non-small cell lung cancer program moving forward. I think if you compare this with any of the numbers that are out there, I mean I think there is -- they're certainly superior to what we would have expected for the chemotherapy regimen alone that we were combining with. So again, a very good sign across the board on all 3 of those meaningful numbers, the tumor response, pre-survival and median overall survival. And in addition to that I mean I think they're as good as pretty much the best drugs that are out there that are being developed that that everyone agrees have activity. So I think it's very uplifting. I think it makes us even more anxious to complete these 2, both the front-line non-small cell lung cancer as well as the second-line non-small cell lung cancer randomized studies and to see that data because certainly these are all good numbers, good data to have going into what we think is going to be a great year for us with non-small cell lung cancer data. Joseph Pantginis - Roth Capital Partners, LLC: If I could just switch gears real fast to Cotara. I appreciate the visibility. I'm sure the street does also with regard to your plans going to the FDA. I was just wondering if -- maybe for Rob or Steve, whomever, if you have a wish list today as to what your study design might potentially look like, of course with the -- pending the FDA's comments?

Yes. I'll just say a couple of things and I'll turn it over to Rob. I mean I think our goal going into this is to really come out with an executable trial design that we can enroll in kind of that 18 to 24 month time period. It's a little bit of a tricky business from a trial design because of the fact that we're not going to be able to blind the study because of the fact that it has catheter placements as well as the fact that it involves radiation. But I think from a larger picture, it's really getting a trial design that we can then execute in relatively short order. And the number of patients, of course, can vary depending on what the trial design is to achieve that goal. Rob, maybe you want to expand on that a little bit?

I think you really hit on some of the good points, Steve. Our major goal is to develop an executable trial, as Steve said, that we can execute within a 24-month period. And of course Cotara is a working drug and certainly extremely quite active as a single agent. And we're hoping that we'll be able to work with the agency and design a trial that probably is in the order of number of patients similar to what Avastin was -- used for Avastin to obtain approval. So I'm pretty confident that we're going to be able to work out something that's quite doable and executable in a reasonable timeframe.

[Operator Instructions] Our next questioner in queue is George Zavoico with MLV. George Zavoico - McNicoll, Lewis & Vlak LLC: Jeff, welcome to Peregrine. Sticking with Cotara for now, following up on Joe's question. Regarding patient selection, I mean the India side seemed to be very successful in having longer survival than your median, which suggests that other sites may have been not quite as successful. Is there a way that you think you could perhaps do either patient selection a little bit better or perhaps is the application of the device to instill Cotara into GBM patients, is there a skill level there that needs to be taken into consideration?

Yes, maybe I can just take a first stab at it and then turn it over to Joe. But, obviously we're very intrigued with that very question because certainly the median overall survival numbers for Dr. Gupta were pretty outstanding. And we looked quit a bit at his patient selection, patient population, age of patients. We really haven't identified any clear correlations with anything he was doing differently from his execution of the trial itself. Of course, catheter placement and selection of the area to place catheters in is certainly technique-driven and it's not impossible that he has some, if you will, natural ability in thinking through the issue of where to place the catheters and do the infusion because essentially what you're trying to do with this treatment is place 2 catheters inside the tumor, in such a way that as we deliver the drug over 25 hours, it basically expands the drug or pushes the drug through the tumor mass and you get good coverage of the tumor with radiation than from its localized position. So clearly if you miss part of the tumor or get lower doses of radiation to parts of the tumor, that's not going work in the patient's favor. I know Joe is much more familiar with this, and obviously, he has been spending a lot of time and really trying to evaluate this because we're thinking toward Phase III. Those may be things that we could include in the training and the initiation of sites and things like that. Joe, maybe you want to expand a little bit?

Sure. I think you're right, Steve it's a -- catheter placement is technique-sensitive, and there is some art to that. Certainly, Dr. Gupta has had tremendous results, and as we've mentioned probably involved in the training for the Phase III study. We have taken a very close look at the data. And really, like you mentioned, Steve, there's nothing obvious that jumps out as his patients that are different than the other patients. Part of it might just be the number of patients at his center. It's a subset of the total patients treated, and we didn't see much of a cross-center difference among the other centers. So we wish we could replicate that everywhere but nothing obvious is jumping out at us. George Zavoico - McNicoll, Lewis & Vlak LLC: Okay. Second question is you guys provided a nice update as to when to expect data from the non-small cell lung cancer trial. Can you provide any guidance on the enrollment in the pancreatic and HCV Phase II trials?

Yes, I'll let -- Joe if you want to address that?

Sure. Yes, so that study is on the way. We're obviously enrolling patients. We are still in sort of in the ramp up phase. We're actually finding that these are much sicker patients and we've had patients who are not eligible through the screening processes because they're so sick. So at this stage, we're still continuing to expand and open our sites. I think we have like a dozen open and a number still that are going through their local approval processes. So I think by the next call, we should have a little bit more to give to that in time. George Zavoico - McNicoll, Lewis & Vlak LLC: Okay. And HCV?

On HCV, that one I think is enrolling very well. I think we believe that enrollment will be completed some time in the third quarter with our early viral response readout hopefully by at the end of the year. So that's a 12-week readout. George Zavoico - McNicoll, Lewis & Vlak LLC: Third calendar of this year or third fiscal quarter for you guys?

Calendar. George Zavoico - McNicoll, Lewis & Vlak LLC: Calendar, okay. And then finally, if I may, a couple of Avid questions. At what capacity are you now running Avid, number one? Number two, the last quarter you talked a little bit about some contamination issues or something, is that completely now resolved? And if you're -- and finally, the third Avid question, with the number of new clients that your -- have already signed up and are projecting to sign up, are you just being conservative in projecting flat revenue for Avid for the next fiscal year?

Yes. So I think --I'll take a first stab at things, and then turn it over maybe to Chris and Jeff to add a few comments on the sort of the percentage of capacity as well as the quality issues that we talked about last quarter. I think that as we look at Avid, clearly we want to continue to operate that as a business and to continue to grow the business and make that successful on the business side of things. As far as how I think about the facility and its utility and how we're using it, it doesn't necessarily come down to what percentage of the capacity we're using because time, it's going to be really running right at full capacity, where we've actually had products in every single reactor downstairs operating simultaneously. But it's really -- we're working with the clients and with Peregrine to meet all of our needs, to continue to advance our clinical programs. And I think most importantly, as both Jeff and Rob mentioned earlier, it is really starting to look forward to eventually being able to launch our own products at this facility. And that's a lot of prep work, a lot of thinking through the quality systems, the control systems to meet not just really U.S. standards but also to meet European regulatory requirements and other territories who might be interested in going for approval. And so I think those are clearly the benefits where having our own facility and being able to control the preparation for those broader activities is a huge strategic benefit. Chris, maybe you want to talk a little bit about the new incoming business and kind of see how we see that fitting in with the growth of the business?

Sure, absolutely. So when we look at clients, we have 2 different types of clients. One are the development going into Phase I clients. And those typical clients come in for about 2 years and then go out and do their trial. Then we have the more substantial anchor clients, as we like to call them, that are here either transferring in a process or have returned to us in our later stage, either Phase II or beyond. And so we try to have a nice mixture of those clients to kind of fill the facility. We obviously have to balance that with Peregrine's requirements and needs based on the clinical trials there. But as we add new clients, we then sometimes lose clients that go out to their trials that they're executing. So in terms of the revenue projection, we are being conservative. It is our kind of base-case scenario. We do see that there's potential upside beyond that. But as you've seen in previous quarters and years, there is fluctuations in terms of timing. And so we felt that it was important to be conservative from a revenue standpoint and from a guidance standpoint. Jeff, do you want to address the previous?

Yes, sure. So let me first just say that manufacturing biologics is a complex process. And any time an issue occurs in that process as required by good manufacturing practices, we have to take a very deep dive and conduct a thorough investigation into the root cause of that issue. This occurrence that we reported last time we believe is a one-time occurrence that we ended up rejecting the batch because we felt that it did not meet those GMP standards. So I think it's important, as I mentioned earlier, as we prepare for later-stage clinical trials and commercial launch, that we make sure that our quality systems are rigorous and our GMP facility remains compliant for regulatory inspection.

Yes, and I think maybe just one more point there also is that I think as we think about capacity in the facility, kind of our goal is to continue to utilize and move closer and closer utilizing the full capacity of the existing facility. I think what we still have the ability to do is to expand the facility. We have adjacent space available that we could actually make a pretty significant increase in the total amount of capacity. And of course it'd be nice if we could drive that interest and drive that process and have really the business drive, the expansion in order to meet its clients' needs, which includes Peregrine as well as our other outside parties. So I think there's really a big significant upside in the ability or in the potential of Avid to manufacture products. And it's really just a matter of what's going to drive that jump to the next level. But certainly we think between Peregrine and our later-stage clinical products and eventual commercial products at Avid that, that will eventually happen. George Zavoico - McNicoll, Lewis & Vlak LLC: In that regard, to jumping to the next level, are you transitioning more and more to the single use because of its lower costs and lower cleansing and prepping facility? Do you think you're going to transfer most manufacturing to single use?

Yes. I think that, that for me is the real goal is to move as much of our own manufacturing to the single use bioreactors that we can. And I think as Chris mentioned in his prepared remarks, one of the big accomplishments last year was getting approval for manufacturing bavituximab in both the stainless steel as well as single-use bioreactors. So that just gives us tremendous flexibility. I mean I think the industry is moving more and more to these sorts of production systems for all the reasons you mentioned. It's much cleaner, they're single use, you don't have all the cleaning validations and it just makes for a much quicker turnover also between clients. So absolutely, I think as we think about building our facility and expanding the facility, to do it with the single-use bioreactors, it's a much less expensive proposition, number one. But number two, it really gives you a lot of flexibility to have to design that facility and operate that facility.

Our next questioner in queue is Roger Adams [ph] , who is a private investor.

I have a quick question regarding the HCV trial and a follow-up question regarding Cotara. Is there any chance that the big EASL, the liver conference in November would be a timing when you could release interim data on that trial?

I'll let Joe answer that question. I think that comes down probably as much as anything to the timing of when abstracts have to be submitted and whathaveyou. But, Joe, you may be more familiar with that?

Yes. I think that's probably a little early for our timeline as we're still finishing up enrollment.

Okay, and maybe [ph], I follow up with a question. Okay, go ahead.

Yes. No, I was going to say -- because generally for the big meetings like ASCO and ASLD the kind of the deadlines for when to submit those abstracts is often as much as 6 months in advance. So that's generally one of the issues with timing-wise and what you want to do as a company.

I happened to check that issue. The late abstract submission date for the November conference is August 5. I don't know if that helps you answer the question or not.

Okay. Thank you for that.

Okay, that sounds like a borderline question but if I could move on to Cotara. Could you comment on the level of interest, hopefully enhanced level of interest that you're getting from potential development partners since the mid-May announcement of the median survival results and also comment on whether -- assuming you get a good outcome from the FDA meeting, whatever, however you categorize favorable outcome. But assuming it's good results from the FDA, are you inclined to go with a regional license or a global license? What are the considerations you have in that decision-making process? And how active is the interest?

Sure. Yes, I mean I think I can -- really I think for both Cotara and bavituximab, the level of interest is certainly increasing as we get closer and closer to sort of Phase III clinical trials. And then clearly for bavituximab, it's going to be the randomized data. We think it's going to really be the validating results that, quite frankly, the investment community is very interested in and waiting for, but also that the potential partners will find to be a real value-driving event for the program. I think regional partnerships are attractive for both Cotara as well as for bavituximab. We have an interest in companies that fit that sort of model for partnering very well for both programs. I think the interest is picking up. People are starting to do their due diligence a little more rigorously. Clearly, we've been keeping especially the big pharma updated on both programs throughout the years. And really now they're reaching that point where I think everyone is really getting a much keener level of interest. So I think clearly for Cotara, with a clear regulatory pathway laid out, it makes it much easier for people to get involved. I think that, that is part of our strategy, and in fact, ideally to have potential partners even involved in kind of helping design that particular protocol because if they're regional partners and they're going to be involve in the Phase III, then we want a trial design that works well for everybody and can really be effective in getting registration simultaneously in multiple territories. So yes, I mean I think partnering interest is picking up. I mean I think we are driving toward the clinical results and toward that FDA meeting as Rob talked so well about. And I think that will really kind of put us in a very nice position toward the end of this year or early next year to bring some of those hopeful partners into the programs and help us move it forward. So I think that's the goal. I mean I think it does, as you said, when you're making presentations at conferences like ASCO, I think it drives a lot of interest because people are really paying a lot of attention to those meetings and it gives a certain validity to the data. And I think really it drives that interest. And the same thing is true for all of our programs. Obviously, we want to present as much data as we can at meaningful clinical conferences. And EASL would be great for the bavi HCV program, which may be a little -- the timing may not quite work out. But the main thing is to get trials completed. If the data is positive, then I think partnering will take care of itself.

That concludes our time for questions. I'd now like to turn the program back over to Steve King for any closing remarks.

Okay. I'd like to thank all of you again for joining us on our call. We've made tremendous progress over the last year. And we're even more excited about the new fiscal year ahead. We've built what I believe is a biotech A team capable of executing our strategies to reach our goal: to develop, manufacture and commercialize antibodies with real potential to improve the treatment of patients. We look forward to keeping you updated on our progress in the future. Good night.

Ladies and gentlemen, this does conclude today's program. Thank you for your participation, and have a wonderful day. Attendees, you may disconnect at this time.