Cancer cells dividing. Source: National Institutes of Health via Facebook.

We're officially past the halfway point of 2015, and as the third quarter kicks off the broader market remains relatively unchanged for the year.

But a new quarter brings with it a number of catalysts, especially for shareholders of small-cap biotech stock Peregrine Pharmaceuticals (NASDAQ: PPHM), which is expected to report its fourth-quarter and fiscal 2015 year-end results after the market closes on Tuesday, July 14.

According to the three-analyst consensus on Wall Street, Peregrine is expected to produce a loss of $0.08 per share on revenue of $6.4 million in the fourth quarter, compared to $6.5 million in sales and a $0.06 per share loss in the fourth-quarter of fiscal 2014. In terms of how well or poorly Peregrine has fared versus Wall Street's estimates over the past three years, it's a veritable coin flip -- the company has had six beats and a handful of misses and meets.

However, for Peregrine Pharmaceuticals' shareholders the company's loss per share for the quarter likely won't be a big focus. Peregrine is a predominantly clinical-stage biotech company, and losses are a way of life for the vast majority of biotech companies still building out their pipelines. Other figures and commentary, though, will be essential.

With that in mind, when Peregrine reports on July 14 I would suggest paying attention to the following factors.


Source: Flickr user Pictures of Money.

1. Cash and cash runway
The good news for investors is that Peregrine's cash situation isn't going to be a mystery heading into this report. When Peregrine issued a press release in early June detailing the planned expansion of its bavituximab program -- Peregrine's bread and butter experimental cancer immunotherapy product -- it reported that the company ended the fiscal year with $68 million in cash and cash equivalents. This is actually up from the $55.2 million it ended Q3 with, but down slightly from the $77.5 million in cash and cash equivalents it finished its fiscal 2014 with.

What I'll find more interesting, and what shareholders will want to pay close attention to, is what Peregrine's cash runway looks like -- in layman's terms, how long Peregrine can survive with the cash and cash equivalents it has remaining. Peregrine shareholders are no strangers to share dilutions through common stock offerings, so mapping out Peregrine's need for financing could be an important tool in determining whether or not more share dilution pressure could be coming.

2. Avid Bioservices' growth rate
It might be Peregrine's "Plan B," but contract manufacturing subsidiary Avid Bioservices has put together a nice track record of growth over the past couple of quarters, resulting in Peregrine's boosting its full-year revenue forecast for Avid in fiscal 2015 to $23 million-$25 million from a prior forecast of $19 million-$23 million. Peregrine also noted Avid's backlog had reached $29 million as of the third quarter. 

I'd suggest paying close attention to the guidance offered by Peregrine for Avid in 2016 (and beyond). Wall Street expects Avid to bring in $31.4 million in 2016, representing growth of somewhere in the neighborhood of 30%. Consider this a baseline expectation. If Peregrine's commentary suggests an accelerating growth rate beyond 30%, I would take it as a very bullish sign for Avid's business model and Peregrine.

Plus, the more Avid makes, the less cash outflow Peregrine would be expected to deal with (research and development and clinical trial costs permitting).

3. Is SUNRISE on track?
Aside from the more immediate concerns and interests, such as cash burn and Avid's growth rate, all eyes will definitely be on any commentary from management regarding the enrollment of patients in the SUNRISE trial.


Source: Peregrine Pharmaceuticals.

SUNRISE is a phase 3 study examining bavituximab as a second-line treatment for non-small cell lung cancer. Bavituximab works by targeting phosphatidylserine (PS) receptors, which are located on the outside of cancer cells, and blocking their immunosuppressant ability. On the bright side, bavituximab hit its primary endpoint in a midstage study by extending median overall survival by a statistically significant amount (11.7 months versus 7.3 months for the control group). On the downside, the midstage data was marred by problems with a third-party laboratory that was handling the study, which required a restatement prior to the above-reported overall survival figures.

Thus SUNRISE is a big step for Peregrine. It could potentially validate the company's immunotherapy development platform as well as its PS-targeting research, and it would give promise to the aforementioned expansion of its bavituximab program. The first step in this process is completing enrollment, which is expected by the end of calendar year 2015. Keep your eyes and ears peeled for any commentary regarding whether or not SUNRISE enrollments are on track.


Source: Peregrine Pharmaceuticals.

Putting things in perspective
For a predominantly clinical-stage company like Peregrine, fourth-quarter results probably won't inspire a huge move up or down in terms of share price. Let's remember that this is a long-tail growth story that revolves around the clinical success of bavituximab in SUNRISE first and Avid Bioservices as a distant second. In other words, unless Peregrine discusses an unexpected delay in SUNRISE enrollments or concerns about its financing going forward, there's probably little need for anyone to adjust their investment thesis in this stock.

Yet this remains a stock that only investors with a high tolerance for risk should venture into. If bavituximab is approved as a second-line non-small cell lung cancer immunotherapy it could have $500 million in peak annual sales potential. To even reach parity in terms of market value to peak sales, Peregrine's share price would need to double. But as a word of caution, if bavituximab doesn't meet its primary endpoint in SUNRISE, a lot of the promise and premium still present in Peregrine's shares will likely evaporate.

Circle your calendars Peregrine shareholders, because July 14 promises to be an important day.