Peregrine adopts stockholder rights agreement

By E. Janene Geiss

Philadelphia, March 17 - Peregrine Pharmaceuticals, Inc. said Friday that its board of directors has adopted a stockholder rights agreement that is designed to strengthen the ability of the board to protect the interests of Peregrine's stockholders.

The agreement, which was adopted Thursday, is similar to plans adopted by many other companies and was not adopted in response to any known offer to acquire the company or other takeover attempt, according to a company news release.

The rights agreement is designed to protect Peregrine stockholders against potential abusive or coercive takeover tactics and to enable all Peregrine stockholders to realize the full and fair value of their investment in the event that an unsolicited attempt is made to acquire Peregrine, officials said.

The adoption of the agreement is not intended to prevent an offer that the board concludes is in the best interests of Peregrine and its stockholders.

"Our recently announced positive human safety data for Tarvacin in the treatment of hepatitis C infection and increasing evidence of the broad potential of this first-in-class agent in multiple antiviral and anticancer indications are increasing the visibility of Peregrine," Steven W. King, president and chief executive officer, said in the release. "We believe that implementation of this rights agreement is a prudent move to ensure that our current stockholders have the opportunity to realize the inherent value of the company as we advance our promising drug development programs."

To implement the agreement, Peregrine said it will issue a dividend of one right for each share of its common stock held by shareholders of record as of the close of business March 27. The rights will initially attach to and trade with the certificates representing outstanding common stock. No separate certificates will be issued.

Each right will entitle holders of each share of company common stock to buy one thousandth of a share of the company's preferred stock at an exercise price of $11.00 per share.

The rights will be exercisable and will detach from the common shares if a person or group acquires 15% or more of the company's outstanding common stock without prior approval from the board, or announces a tender or exchange offer that would result in that person or group owning 15% or more of the company's common stock.

Each right, when exercised, entitles the holder (other than the acquiring person or group) to receive company common stock (or in certain circumstances, voting securities of the acquiring person) with a value of twice the rights exercise price upon payment of the exercise price of the rights, officials said.

The company said it will be entitled to redeem the rights at $0.001 per right at any time prior to a person or group achieving the 15% threshold. The rights will expire March 16, 2016.

Issuance of the rights does not in any way weaken the financial strength of Peregrine or interfere with its business plans. The issuance of the rights themselves has no dilutive effect and will not affect reported earnings per share, officials said.

Peregrine is a Tustin, Calif., biopharmaceutical company with a portfolio of innovative product candidates in clinical trials for the treatment of cancer and viral diseases.

The company is pursuing three separate clinical trials in cancer and antiviral indications with its lead product candidates Tarvacin and Cotara. Peregrine also has in-house manufacturing capabilities through its wholly owned subsidiary Avid Bioservices, Inc., which provides development and biomanufacturing services for both Peregrine and outside customers.

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