9. SEGMENT REPORTING

6 Months Ended

Oct. 31, 2016

Segment Reporting [Abstract]

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 of cancer. Avid is engaged in providing contract manufacturing services for third-party customers on a fee-for-service basis while also supporting our internal drug development efforts.

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 October 31,						Six Months Ended October 31,
	2016			2015			2016			2015
Contract manufacturing services revenue	$	23,370,000		$	9,523,000		$	28,979,000		$	18,902,000
Cost of contract manufacturing services		15,441,000			4,741,000			18,503,000			9,349,000
Gross profit		7,929,000			4,782,000			10,476,000			9,553,000
Revenue from products in research and development		–			–			–			292,000
Research and development expense		(7,022,000	)		(14,190,000	)		(15,591,000	)		(28,108,000	)
Selling, general and administrative expense		(4,984,000	)		(4,416,000	)		(10,044,000	)		(9,315,000	)
Interest and other income		21,000			626,000			46,000			657,000
Net loss	$	(4,056,000	)	$	(13,198,000	)	$	(15,113,000	)	$	(26,921,000	)

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 October 31,				Six Months Ended October 31,
Customer	2016		2015		2016		2015
Halozyme Therapeutics, Inc.		77%		56%		74%		70%
Customer A		10		41		14		28
Customer B		12		–		10		–
Other customers		1		3		2		2
Total		100%		100%		100%		100%

In addition, during the three and six months ended October 31, 2016 and 2015, contract manufacturing services revenue was derived solely from U.S. based customers.

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

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

	October 31, 2016		April 30, 2016
Long-lived Assets, net:
Contract manufacturing services	$	22,594,000	$	22,783,000
Products in research and development		1,363,000		1,519,000
Total	$	23,957,000	$	24,302,000