Avid Bioservices Inc (CDMO): 8-6-11: Avid, Cook, and PacificGMP now H...

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Friday, 08/26/2011 8:59:13 AM

Friday, August 26, 2011 8:59:13 AM

8-6-11: Avid, Cook, and PacificGMP now Halozyme’s 3 CMO’s.

We learned in Aug’08 that Avid was no longer Halozyme’s ’sole contract manufacturer’ for the active pharmaceutical ingredient used in their of Cumulase, HYLENEX, Chemophase, and Enhanze technologies, as it had been from ~12-2005 thru 8-2008. On 8-21-08, HALO filed an 8-K stating that a 2nd CMO agreement had been made with Cook Pharmica LLC [ privately-held, Bloomington IN: http://www.cookpharmica.com – Cook has greater capacity & larger bioreactors than Avid ], who will “mfg. & supply clinical-grade qty’s of rHuPH20.” Additionally, in their 10-Q pub. 5-6-11, Halozyme 1st mentioned that a 3rd CMO, PacificGMP [ privately-held, SanDiego http://www.pacificgmp.com ], has been secured to join Avid & Cook in producing their bulk API.

On 4-5-10, AVID & HALO announced that they had extended their 2006 supply agreement and added a new one with Avid (and a 2nd with Cook-Pharmica) to cover “the commercial prod. of rHuPH20 to be used in the mfg. of both current products as well as certain partnered product candidates such as subcutaneous HERCEPTIN & GAMMAGARD with rHuPH20.” The Avid 4-5-10 PR announcing this new agreement added, “The companies have also entered into a long-term strategic relationship with Halozyme designating Avid a preferred supplier for future products requiring Avid's process development & biomanufacturing capabilities & expertise.” (see below).

HALOZYME’S 10-Q A/O 6-30-11 PUB. 8-6-11:
PG40: RISK FACTORS
”If our contract manufacturers are unable to manufacture significant amounts of the API used in our products and product candidates, our product development and commercialization efforts could be delayed or stopped and our collaborative partnerships could be damaged. We have existing supply agreements with contract manufacturing organizations Avid Bioservices, Inc., Cook Pharmica LLC, and PacificGMP, Inc., to produce bulk API. These manufacturers each produce API under current Good Manufacturing Practices, or cGMP, for clinical uses. In addition, Avid currently produces API for commercialized products. Avid and Cook will also provide support for the chemistry, manufacturing and controls sections for FDA and other regulatory filings. We rely on their ability to successfully manufacture these batches according to product specifications and Cook and PacificGMP have relatively limited experience manufacturing our API. In addition, as a result of our contractual obligations to Roche, we will be required to significantly scale up our commercial API production at Cook during the next 2 years. If Cook is unable to obtain status as a cGMP-approved manufacturing facility, or if either Avid, Cook or PacificGMP: (i) are unable to retain status as cGMP-approved manufacturing facilities; (ii) are unable to otherwise successfully scale up our API production; or (iii) fail to manufacture the API required by our proprietary and partnered products and product candidates for any other reason, our business will be adversely affected. We have not established, and may not be able to establish, favorable arrangements with additional API manufacturers and suppliers of the ingredients necessary to manufacture the API should the existing manufacturers and suppliers become unavailable or in the event that our existing manufacturers and suppliers are unable to adequately perform their responsibilities. We have attempted to mitigate the impact of supply interruption through the establishment of excess API inventory, but there can be no assurances that this safety stock will be maintained or that it will be sufficient to address any delays, interruptions or other problems experienced by Avid, Cook and/or PacificGMP. Any delays, interruptions or other problems regarding the ability of Avid, Cook and/or PacificGMP to supply API on a timely basis could: (i) cause the delay of clinical trials or otherwise delay or prevent the regulatory approval of proprietary or partnered product candidates; (ii) delay or prevent the effective commercialization of proprietary or partnered products and/or (iii) cause us to breach contractual obligations to deliver API to our partners. Such delays would likely damage our relationship with our partners under our key collaboration agreements and they would have a material adverse effect on our business and financial condition.”
http://www.sec.gov/Archives/edgar/data/1159036/000095012311073693/a57348e10vq.htm
All HALO Filings:
http://www.sec.gov/cgi-bin/browse-edgar?CIK=0001159036&action=getcompany

FORM 8-K FOR HALOZYME THERAPEUTICS INC - 21-AUG-2008
Entry into a Material Definitive Agreement
"On Aug. 15, 2008, Halozyme and Cook Pharmica LLC entered into a Clinical Supply Agreement… Cook will manufacture and supply Halozyme with clinical-grade quantities of rHuPH20, Halozyme's proprietary recombinant PH20. The Agreement calls for Cook to produce the PH20 in multiple mfg. runs, the first of which is expected to commence in late2008/early2009 and the last of which is expected to occur prior to the end of 2009. Halozyme will pay Cook an aggregate of up to $5.6mm for the mfg. & supply services to be provided throughout the term of the Agreement.”
http://biz.yahoo.com/e/080821/halo8-k.html
[***NOTE: Halozyme needed a 2nd CMO source and thus added Cook back around 8-2008. Plus, Cook has much higher production capacity than Avid: http://www.cookpharmica.com/facility/index.php . If demand for the Roche/Enhanze enzymes takes off, they’ll need Cook to produce the larger quantities in the future.]

Avid’s CMO relationship with HALO goes back to early 2005:
2-17-05: “Avid Signs Comm. Mfg. Contract with Halozyme…” http://tinyurl.com/6rbwzg
12-6-05: “Avid Begins 1st Comm. Stage Drug Mfg. Project – Hylenex…” http://tinyurl.com/5oryz3
12-6-06: “Halozyme shares soar on Roche deal over Enhanze” http://tinyurl.com/6ch2mf
12-19-06: ”Avid & Halozyme Extend Mfg. Agreement…” http://tinyurl.com/62wp67
4-5-10: ”Avid & Halozyme Add New Mfg. Agreement for ‘new partnered products’…” http://tinyurl.com/ykheyke

Recall that on 12-6-06, Roche & Halozyme (HALO) announced a deal, worth up to $581mm, which has Roche “applying Halozyme's Enhanze technology to Roche's biological therapeutic compounds”:
http://www.fiercebiotech.com/story/halozyme-shares-soar-on-major-licensing-pact/2006-12-06

Recall also this 12-19-06 Avid announcement: ”Avid Bioservices & Halozyme Therapeutics Extend Commercial Mfg. Agreement - Extended Terms may Include up to 20 cGMP runs/year over the next 5 years”
http://www.peregrineinc.com/content.php?mi=MTc=&appAction=--PRINT&Id=OTQzMzIy
THIS COMMENT FROM THE PEREGRINE 3-12-07 CC:
CEO Steven King: “Avid Bioservices: …Perhaps the highlight of the qtr was the 5-year extension of our commercial mfg. contract with Halozyme Therapeutics. We believe this contract has the potential to drive significant revenues at Avid.”
http://tinyurl.com/2dtmca

= = = = = = = = = = =Background:
2-17-05: Avid Bioservices Signs Commercial Mfg. Contract with Halozyme Therapeutics - Avid Bioservices Signs Commercial Mfg. Contract with Halozyme Therapeutics - Commercial Manufacturing of Product to Commence in March 2005
http://pphm.client.shareholder.com/releasedetail.cfm?ReleaseID=266138

12-6-05: Peregrine's Subsidiary Begins First Commercial Stage Drug Mfg. Project - Avid Bioservices Is Manufacturing the Active Ingredients for Hylenex, Now Approved for Marketing by the FDA
http://pphm.client.shareholder.com/releasedetail.cfm?ReleaseID=266101

12-19-06: ”Avid Bioservices & Halozyme Therapeutics Extend Commercial Mfg. Agreement - Extended Terms May Include Up to 20 cGMP Runs/Year”
TUSTIN, Dec19 2006: Avid Bioservices announced today that it has extended its commercial manufacturing supply agreement with Halozyme Therapeutics, Inc. Under the terms of the contract amendment, Avid could manufacture up to 20 runs/year over the next 5 years of a recombinant human enzyme that is the active ingredient in Halozyme's marketed products, Hylenex and Cumulase. "We are pleased to extend our contract with Avid to manufacture our recombinant human enzyme that is a key ingredient in Hylenex and Cumulase," said William Fallon, VP of mfg. and operations at Halozyme. "Avid's proven capabilities in cGMP manufacturing support our ability to increase sales of both marketed products."
http://pphm.client.shareholder.com/releasedetail.cfm?ReleaseID=266057

12-6-06: “Halozyme shares soar on Roche deal over Enhanze”
News that Roche has licensed Halozyme Therapeutics' drug delivery technology --Enhanze-- in a deal worth up to $581mm sent Halozyme's stock up a whopping 60%. Halozyme gains $20mm up front for Roche's use of the technology for three specific drug targets and has an option to commercialize the technology on another 10 therapies over 10 years. Milestone payments on the first three programs could be worth up to $111mm with another $47mm on each of the next 10 programs. And Roche is investing $11mm in Halozyme, gaining a 5% stake of its common shares. Analysts liked the terms, noting that the pact marks a critical validation for Halozyme's work…
http://www.fiercebiotech.com/story/halozyme-shares-soar-on-major-licensing-pact/2006-12-06

4-5-10: “Avid Bioservices & Halozyme Therapeutics Expand Commercial Supply Relationship With New Manufacturing Agreements - Avid Designated a Preferred Supplier for Halozyme”
TUSTIN, April 5 2010: Avid Bioservices… today announced that it has expanded its commercial supply relationship with Halozyme Therapeutics, Inc. with new manufacturing agreements. The companies have also entered into a long-term strategic relationship with Halozyme designating Avid a preferred supplier for future products requiring Avid's process development and biomanufacturing capabilities and expertise. Avid has manufactured commercial product for Halozyme since 2005 in the company's current cGMP facility.
As part of the new agreements, the companies have amended and extended their existing commercial supply agreement for recombinant human hyaluronidase ("rHuPH20"), used in 2 of Halozyme's marketed products. In addition, the companies have signed a new commercial supply agreement for additional rHuPH20 products. Specific financial terms of these commercial supply agreements have not been disclosed.
"We are pleased to strengthen our already robust supply chain for rHuPH20 with these new agreements with Avid, supporting our existing products as well as partnered product candidates," said Jonathan E. Lim, M.D., Halozyme's president and CEO. "Expanding our commercial supply relationship with Avid is a testament to the strong relationship we have developed over the past 5 years."
"We are delighted to extend the Hylenex & Cumulase supply agreement, and expand our long-term relationship with Halozyme as we partner with them to support their current & future commercial and clinical process dev. and biomanufacturing needs," said Christopher E. Eso, Avid's VP, business operations. "Our solid client relationships and dedicated team at Avid have been critical to ensuring our clients' success."
http://ir.peregrineinc.com/releasedetail.cfm?ReleaseID=456456

4-5-10 HALOZYME PR: “Halozyme Announces Multiple Commercial Supply Agreements for the Manufacture of rHuPH20”
SAN DIEGO, April 5 2010: Halozyme… today announced the execution of multiple commercial supply agreements with its existing manufacturing partners. Halozyme amended an existing commercial supply agreement with Avid Bioservices, Inc., entered into a new commercial supply agreement with Avid and entered into a new commercial supply agreement with Cook Pharmica LLC. These 3 agreements are expected to cover the commercial production of recombinant human hyaluronidase (rHuPH20) to be used in the manufacture of both current products as well as certain partnered product candidates such as subcutaneous Herceptin & GAMMAGARD with rHuPH20. Subcutaneous Herceptin & GAMMAGARD with rHuPH20 are both currently in Phase 3 clinical trials. "We are pleased to strengthen our already robust supply chain for rHuPH20 by securing these commercial supply agreements to support existing products as well as exciting partnered product candidates such as subcutaneous Herceptin & GAMMAGARD with rHuPH20," stated Jonathan E. Lim, M.D., Halozyme's CEO.
http://phx.corporate-ir.net/phoenix.zhtml?c=175436&p=irol-newsArticle&ID=1409382

http://www.halozyme.com (HALO) . . . Pipeline: http://www.halozyme.com/products.php
http://www.avidbio.com (CMO - wholly-owned subsidiary of PPHM)
http://www.peregrineinc.com

Avid maintains and operates a state-of-the-art cGMP manufacturing facility with a highly skilled staff to produce monoclonal antibodies and recombinant proteins for diagnostic and parenteral applications to diagnose and treat human diseases... RECOMBINANT PROTEINS are made from cloned DNA sequences which usually encode an enzyme or protein with known function.

• ENHANZE TECHNOLOGY: Halozyme's enzyme-based drug delivery platform based on recombinant human PH20 hyaluronidase (rHuPH20).
• HYLENEX: for use as an adjuvant to increase the absorption and dispersion of other injected drugs.
• CUMULASE: the first and only recombinant human hyaluronidase for cumulus removal in the in vitro fertilization (IVF) process.
• CHEMOPHASE: HALO’s lead oncology product candidate, is an investigative chemoadjuvant designed to enhance the transport of chemotherapeutic agents to tumor tissue, increasing diffusion in tissues without affecting vascular permeability