TUSTIN, Calif.—The stock price for
Peregrine Pharmaceuticals Inc. took a nosedive on Sept. 24, just a couple weeks after enjoying a boost thanks to very
positive news on its investigational cancer drug bavituximab. After peaking at around $5.50 at one point since that upbeat news, the stock plunged from a Friday closing price of $5.39 to $1.16 by end of trading on Monday, after the company reported that investors should not rely on previous reports of clinical data from its randomized, double-blindplacebo-controlled Phase II trial of bavituximab in second-linenon-small cell lung cancer (NSCLC), which had seemed to show that patients who took the drug might live twice as long as patients who were treated with only a chemotherapy drug.
Peregrine noted that while it was preparing foran end-of-Phase II meeting with regulatory authorities regarding bavituximab in second-line NSCLC, it discovered "major discrepancies betweensome patient sample test results and patient treatment code assignments."
The company notes that due to the double-blind nature of the NSCLC trial, it was notpermitted to have access to either patient group assignments or relatedproduct coding information. So, to carry out the trial, Peregrinecontracted with independent third-party contractors to execute treatmentgroup assignments and oversee clinical trial material coding anddistribution.
"A subsequentreview of information has determined that the source of thesediscrepancies appear to have been associated with the independentthird party contracted to code and distribute investigational drugproduct," Peregrine reported. "This discrepancy is specific to this trial and will have no impact on other ongoing bavituximab trials. Peregrine intends to communicate further as soon as it is able todetermine the impact of this issue."
There is no indication yet as to whether the discrepancies will affect the previously reported data at all, whether positively or negatively, but the news certainly shook investor confidence, so the immediate impact seems to be to Peregrine's reputation, at least in the short run.
Analyst Joseph Pantginis of Roth Capital Partners, for example, lowered his rating on Peregrine from "buy to "neutral" and dropped his 12-month target price for the stock from $9 all the way down to 70 cents, after having raised that target from $5 when the phase II data came out on Sept. 7. "Today's news comes as ashock and we believe represents a major blow to confidence in thebavituximab program until the discrepancies can hopefully be workedout," Pantginis wrote.
