Tim Brons - IR, Vida Strategic Partners Steven King - President and CEO Joseph Shan - VP, Clinical and Regulatory Affairs Stephen Worsley - VP, Business Development Robert Garnick - Head of Regulatory Affairs Paul Lytle - CFO

Thomas Yip - FBR and Company George Zavoico - JonesTrading Institutional Services LLC Rahul Jasuja - Noble Life Science Partners

Thank you. 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; and Steve Worsley, Vice President of Business Development. Today our team will be providing an overview of the company’s operations and progress, spanning clinical, preclinical, corporate as well as Avid Bioservices’ contract manufacturing business.

After our prepared remarks we will welcome your questions. Before we begin, I’d like to caution that comments made during this conference call today, December 10, 2015 will contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, concerning the current belief of the company, which involves a number of assumptions, risks and uncertainties.

Actual results could differ from these statements and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all of the company’s filings with the Securities and Exchange Commission concerning these and other matters.

With that, I will turn the call over to Steve.

Thanks, Tim, and thanks as always to all of you who have dialed in, and to all of you who are participating via webcast today. I’ll start by saying that we are making great progress in our broad overall development strategy for bavituximab.

The strategy is to establish the potential of bavituximab in combination with current and evolving standard of care drugs, with both chemotherapy and immuno-oncology combination in multiple cancer indications. Our goal is to drive to meaningful clinical data points in each of these areas by early 2017.

In accordance, today’s development discussion will focus on these efforts. Including upcoming completion enrollment in the SUNRISE trial, it is evaluating a chemotherapy combination and as SUNRISE wraps up our plans for a smooth transition of the key SUNRISE clinical sites directly to the next Phase II lung cancer trial evaluating an IO combination.

In addition we are expanding our potential cancer indication through initiation of a Phase II/III metastatic breast cancer study. All of this while continuing to work through several other clinical trial concepts actively under development or initiation in the New Year.

On the development front, I’m pleased to report today that we are nearing completion enrollment in the cornerstone of our bavituximab development strategy, our Phase III SUNRISE trial. In fact with over 90% of the expected enrollment complete we currently have sufficient patient enrollment based on the assumptions of the study to allow the trial’s planned interim evaluations and final readout based on the primary endpoint of overall survival.

Having said that, we do expect to complete enrollment in it of at least the pre-specified 582 patients over the coming weeks. At this point the next big milestones really are the interim data analysis from the study expected to take place during early and mid 2016 with trial unblinding expected toward the end of 2016.

Joe will add little more color to the up coming milestones for the SUNRISE trial during his prepared remarks. For me what has now become the most important thing at this point in our broader strategy is to engage our best enrolling sites from the SUNRISE trial toward a smooth transition to the new Phase II study that will evaluate bavi in combination with AstraZeneca’s anti-PD-L1 antibody durvalumab.

We have a golden opportunity here to maintain continuity for our lung cancer program by continuing almost seamlessly working with our high enrolling sites and key investigators in essentially the same even in extended patient population with the inclusion of squamous non-small cell lung cancer patients. I personally had the opportunity to meet with key investigators all over the globe and there is a lot of enthusiasm for continuing to work with Peregrine and bavituximab in the new study.

Based on feedback so far we expect that the new study could enroll even more quickly than the SUNRISE trial and the best way to ensure that is to get off to a quick start. Again keeping us on track for data from the new study by early 2017.

This would give us two nice sets of data in non-small cell lung cancer to work with. Equally exciting is the Phase II/III metastatic HER2 negative breast cancer study that we are looking forward to starting by year-end.

I say exciting because the new trial design has a solid clinical data basis and our previously completed Phase I and Phase II trials in apatient population in these new treatment options. While we don’t have the same benefit as we do for the lung cancer program of rolling right from one study into another.

The team has been working diligently to get the study started by the year-end, giving us additional enrollment months, which again can put us on track for some meaningful clinical data from the study by early 2017. The company is also working diligently on a number of other studies including our other collaboration with AstraZeneca, evaluating a combination of bavi with chemotherapy and adding in again their durvalumab antibody in multiple solid tumor indication.

So conceptually get an immune response going with chemotherapy and bavi and then keep it going with durvalumab. In addition, we are working toward initiating an earlier stage breast cancer study as well as a number of other concepts that are in development.

So stay tuned for future clinical developments. Taken together, these clinical efforts along with the plethora of preclinical and translation collaborations, evaluating new combinations, new potential indications and further validating our immune mechanism of action has a potential to add substantial value over the coming year.

We expect a steady flow of scientific and clinical presentations over the coming year as we continue to learn to more about the potential bavituximab. Oh, and by the way, today we also announced another record revenue quarter from our biomanufacturing business with our new Myford manufacturing facility just ready for GMP production, which can help spur even more future growth for the business.

Not the least of which is getting ready for bavi commercial production. Rob and Paul will add more detail and discuss the continued growth for our manufacturing business shortly.

To say that these are busy times at Peregrine is an understatement. I’ll now turn the call over to Joe.

Thanks, Steve. I’d like to start by quickly addressing our Phase III SUNRISE trial, which is evaluating the use of bavituximab and docetaxel in patients with previously treated locally advanced or metastatic non-squamous non-small cell lung cancer.

As Steve stated, we have already enrolled the number of patients required to achieve the trial’s main objectives and expect to complete enrollment of the target sample size of 582 in the coming weeks. The next milestones are the interim analyses that will be conducted when 33% and 50% of the targeted number of deaths are reached.

While these are event driven, it is our expectations that the first interim analysis will read out in early 2016 and the second interim analysis around mid-2016. The final analysis, which would trigger study unblinding is currently projected to occur at the end of 2016.

With the SUNRISE enrollment nearing completion, the Peregrine clinical team is shifting focus to a number of new clinical projects, including those just referenced by Steve. In each case our goal is to generate clinical evidence of bavituximab’s ability to improve patient outcomes when combined with chemotherapy and immuno-oncology agents.

With this goal in mind, we are very pleased to be collaborating with AstraZeneca. Through this partnership we will be conducting two clinical trials both of which will be initiated in 2016.

One trial which we expect to initiate early 2016 is a global randomized Phase II study in approximately 200 patients with previously treated non-small cell lung cancer. This trial will evaluate the combination of bavituximab and AZ’s anti-PD-L1 immune checkpoint inhibitor durvalumab or MEDI4736.

As part of this combination trial, patients will also be evaluated retrospectively for the correlation between their PD-L1 levels and clinical outcomes. As the remaining patients are enrolled into SUNRISE, we have already begin laying the groundwork to quickly initiate this new Phase II combination study at a number of our most active sites participating in SUNRISE.

These investigators are very familiar with bavituximab and have access to the appropriate patient population and we believe this experience will greatly benefit our new study. The other trial with AstraZeneca will be a Phase I/1b trial evaluating bavituximab in combination with chemotherapy and durvalumab in multiple solid tumors.

The Phase I part of the trial will confirm the tolerability of the two IO agents and establish a recommended dose regimen for the Phase 1b part of the trial, which will assess safety and activity of the triple combination, which includes standard chemotherapy. We’re particularly excited about these trials because we believe that bavituximab and durvalumab have different and potentially complementary mechanism.

Bavituximab by targeting exposed PS, a highly immune-suppressive molecule exposed on the surface of cells in the tumor micro environment has been shown to trigger macrophages re-polarization and tumor specific T-Cell activation. Durvalumab is a monoclonal antibody directed against programmed cell death ligand 1 PD-L1 and signals from PD-L1 help tumors avoid detection by the immune system.

It’s become apparent that check inhibitors like durvalumab are most effective when there is a preexisting T-Cell response in tumors as it provides those check inhibitors with the immune active environment they need to work best. Importantly, we have demonstrated in preclinical models the ability of bavituximab to activate CD8+ T-Cells and the anti-tumor activity PD-L1 checkpoint blockade is greatly enhanced when combined with bavituximab.

Another important observation we recently made is that our PS signaling pathway inhibitors demonstrate multiple signs of immune activation in the low or negative PD-L1 tumors. We believe that this holds great potential to increase the number of patients able to respond to checkpoint therapy as well as traditional chemotherapies.

Based on these observations we believe that by combining these two approaches the potential exist for a more complete and durable anti-tumor immune response. We look forward to getting both trials in our AstraZeneca collaboration underway.

Now beyond lung cancer we plan to initiate additional clinical trials in breast cancer based on our clinical experience to-date. Data from our Phase I investigator sponsor trial of bavituximab plus paclitaxel published in Cancer Medicine earlier this year demonstrated an impressive 85% response rate of patients with HER2 negative metastatic breast cancer.

Data from this IST, together with two prior Peregrine sponsored trials of bavituximab with taxane-based chemotherapy, which yielded between 61% and 74% response rate and a median overall survival of over 20 months in patients with advanced or metastatic breast cancer provides strong rationale to advance this indication. Importantly taxanes continue to be a key standard treatment option for different stages of breast cancer.

Accordingly we plan to initiate a Phase II/III trial in patients with HER2 negative metastatic breast cancer with all patients receiving physicians’ choice of paclitaxel or docetaxel, either alone or in combination with bavituximab. The Phase II part of the trial will enroll approximately 150 patients with a primary end point from overall response rate.

The first sites in this Phase II/III breast cancer trial are scheduled to be initiated before the end of the year. Furthermore we are planning a trial evaluating neoadjuvant paclitaxel with or without bavituximab, in the hopes of further elucidating bavituximab’s immune modulating mechanism and look for clinical signal in early stage breast cancer.

That concludes my comments today I’d like to turn the call over to Steve Worsley to give an overview of business development activity. Steve?

Thanks, Joe. We were very pleased to announce our collaboration with AstraZeneca in August and were even more delighted to announce the expansion of that agreement in October.

We believe that AstraZeneca’s enthusiasm for this program is based on the promise and potential of bavituximab. Copious amounts of positive data have consistently demonstrated bavituximab’s therapeutic value and ability to provide solutions to the limitations of currently available treatments.

Today checkpoint inhibitors are primarily effective in patients with high PD-L1 expression a minority of all patients being treated. However translational findings have demonstrated that bavituximab is effective in patients with the lowest PD-L1, PD-1 expression highlighting the potential bavituximab to convert patients with the low expression levels who do not respond to anti-PD-1 treatments into responders.

In addition to AstraZeneca such data have also been the impetus for our ongoing collaboration with Memorial Sloan Kettering Cancer, which is evaluating combinations of bavituximab with other checkpoint inhibitors and immune stimulatory agents for the purpose of developing new and increasingly effective anti-cancer treatments. It has also been the driver for our ongoing work with the University of Texas, Southwestern as well as a number of other investigator sponsored trials.

Peregrine’s goal in partnering with these immuno-oncology leaders is to define the broader scope of utility for bavituximab. Through these collaborations we are actively identifying a range of indications and treatments that will benefit from combination therapy with bavituximab.

This will undoubtedly yields important findings in the near-term that will continue to build shareholder value. We continue our dialog with a number of other world leading pharmaceutical organizations and believe that bavituximab will continue to generate partnering interest.

I will now turn the call over to Rob Garnick, Peregrine’s Head of Regulatory Affairs, who’ll discuss our drug manufacturing and regulatory activities. Rob?

Thanks, Steve. As we’ve reported in our press release today, our new facility has just been commissioned for the initial phase of GMP manufacturing.

I’d like to reiterate that this facility currently named the Myford facility is state-of-the-art and its construction was completed for a fraction of the cost of building of comparable facilities. This in and of itself is a major accomplishment and I am very proud of our team for their success of this achievement.

Going forward we expect this facility will be a highly valuable asset for Peregrine and Avid. Initial engineering runs which will be initiated tomorrow will be followed by GMP ramps prior to process validation for products entering into the facility.

GMP material produced in the new facility can be used either in clinical trials or for commercial sale once Peregrine or Avid’s business partners make the appropriate regulatory filings in the territories where they intend to use the product. This generally requires several runs and demonstrating that the product produced in Myford facility is comparable to product produced in our Franklin facility or in other production facilities.

With the Myford site now in the initial phase of GMP manufacturing, we have seen a significant increase in demand for production capacity. Although, we have just opened the doors at Myford we are already contemplating our options to increase further manufacturing capacity.

Although no decisions have been made we are pleased to have what appears to be a growing opportunity in this important area of our business. On the regulatory side, we are busy to taking the steps necessary to initiate up the new clinical trials that Joe described.

To this end we successfully filed the new IND support expanding the bavituximab breast cancer program and subsequently received FDA clearance to commence the study. We have also taken important steps to de-risk our bavituximab durvalumab combination trials by requesting and receiving critical guidance from the FDA.

It’s been a busy time for the regulatory affairs team, but our recent efforts have put us on track to grow our manufacturing business and initiate our newest clinical programs. This concludes my comments and I will now turn the call over to Paul Lytle, Chief Financial Officer who will discuss the company’s financial performance and our Avid Bioservices business.

Paul?

Thanks, Rob. I’ll start with an overview of our contract manufacturing business.

The Avid Bioservices business continues to strengthen. During Q2, our wholly owned subsidiary achieved record quarterly revenue of $9.5 million, a 52% increase over the same prior year quarter.

Year-to-date, we recorded manufacturing revenue of $18.9 million or a 61% increase compared to the same prior year period. Our outlook for this business remains very positive with our customers continuing to book available production capacity.

This has raised our current revenue backlog to approximately $49 million. Based on this increase in demand, we are raising our revenue guidance to a range of $35 million to $40 million for the full fiscal 2016 compared to previous guidance of $30 million to $35 million.

We also believe that business has more opportunity to grow as our second manufacturing facility has the capacity to generate approximately $40 million in new revenue. As Rob mentioned, the new facility is ready for the initial phase of GMP manufacturing to support both to manufacturing of bavituximab in addition to growing our revenue from third party customers.

As I wrap up this discussion on Avid, I can’t emphasize enough the strategic importance of this business. Avid continues to generate non-dilutive income that in turn continues to offset the amount of capital we need to raise by other means, plus it’s important to note that preparing bavituximab for commercial production is a significant financial endeavor and this strategic asset saves us millions of dollars each year in manufacturing cost.

Turning now to expenses, R&D expenses for the quarter increased primarily due to increase expenses associated with our Phase III SUNRISE trial and our newly planned later stage company sponsored trials in breast cancer and lung cancer. While G&A expenses remained relatively flat quarter-over-quarter.

Lastly, during the quarter Peregrine closed a registered direct offering with a single institutional investor raising $20 million. These funds will help support our ongoing Phase III SUNRISE trial as well as our newly planned later staged company sponsored trials.

In more detailed analysis of our statement of operations is included in our Form 10-Q that was filed today. This concludes my financial overview, I now turn the call back over to Steve to discuss some important upcoming milestones.

Steve?

Thanks, Paul. As you’ve just heard from the team although our SUNRISE enrollment milestone has been reached we have no intention of slowing down, quite the opposite.

We are aggressively moving to initiate the clinical trials that will allow us to build the most robust oncology business possible. By mid 2016 we will initiate two breast cancer studies, a Phase II/III trial in metastatic HER2 negative breast cancer and the Phase I trial in early stage breast cancer.

Our new Phase II trial in lung cancer and a Phase I/Ib trial for multiple solid tumors. These studies will set the stage for expected clinical data readouts from at least three trials by early 2017.

Our SUNRISE Phase III trial, the new Phase II non-small cell lung cancer trial as well as the Phase II breast cancer study. In addition we have other potential data coming from ongoing ISTs as well as the other studies that we will be initiating.

With each of these studies our goal is the same, we are committed to identifying key indications, patient populations and therapeutics that can benefit from combination treatment with bavituximab. From what we have seen to-date the opportunity appears vast and we are hard at work converting the most promising prospects into true value.

This includes our prepared remarks and we would now like to open the call for questions.

Well again I’d like to thank all of you for participating in today’s phone call. As always I want to especially thank our stockholders for their continued support, our manufacturing clients for their continued business and as always our patients and their families that are participating in our bavituximab clinical trials.

With that we will now conclude the call.