9. SEGMENT REPORTING

9 Months Ended

Jan. 31, 2015

Segment Reporting [Abstract]

9. SEGMENT REPORTING

Our business is organized into two reportable operating segments and both operate in the U.S. Peregrine is engaged in the research and development of monoclonal antibodies for the treatment and diagnosis of cancer. Avid is engaged in providing contract manufacturing services for Peregrine and third-party customers on a fee-for-service basis.

The accounting policies of the operating segments are the same as those described in Note 2. We evaluate the performance of our contract manufacturing services segment based on gross profit or loss from third-party customers. However, our products in the research and development segment are not evaluated based on gross profit or loss, but rather based on scientific progress of the technologies. As such, gross profit or loss is only provided for our contract manufacturing services segment in the below table. All revenues shown below are derived from transactions with third-party customers.

Segment information is summarized as follows:

	Three Months Ended January 31,						Nine Months Ended January 31,
	2015			2014			2015			2014
Contract manufacturing services revenue	$	5,677,000		$	3,885,000		$	17,436,000		$	15,820,000
Cost of contract manufacturing services		3,113,000			2,416,000			10,835,000			9,281,000
Gross profit		2,564,000			1,469,000			6,601,000			6,539,000
Revenue from products in research and development		–			–			37,000			107,000
Research and development expense		(11,261,000	)		(6,649,000	)		(31,465,000	)		(18,910,000	)
Selling, general and administrative expense		(4,325,000	)		(4,563,000	)		(13,503,000	)		(12,913,000	)
Other income, net		28,000			19,000			107,000			63,000
Net loss	$	(12,994,000	)	$	(9,724,000	)	$	(38,223,000	)	$	(25,114,000	)

Revenue generated from our contract manufacturing services segment was derived from a limited number of customers. The percentages below represent revenue derived from each customer as a percentage of total contract manufacturing services revenue:

	Three Months Ended January 31,				Nine Months Ended January 31,
	2015		2014		2015		2014
Halozyme Therapeutics, Inc.		81%		87%		84%		88%
Advanced BioScience Laboratories, Inc.		4		13		10		9
Other customers		15		–		6		3
Total		100%		100%		100%		100%

Revenue generated from our products in our research and development segment during the nine months ended January 31, 2015 and 2014 was directly related to license revenue recognized under licensing agreements with an unrelated entity.

Our long-lived assets consist of leasehold improvements, laboratory equipment, furniture and fixtures, office equipment and software, construction-in-progress and are net of accumulated depreciation. Long-lived assets by segment consist of the following:

	January 31, 2015		April 30, 2014
Long-lived Assets, net:
Contract manufacturing services	$	6,701,000	$	1,956,000
Products in research and development		2,257,000		491,000
Total	$	8,958,000	$	2,447,000