Peregrine plunges on drug study woes

The pharmaceutical company says it discovered 'major discrepancies' involving cancer patient test results.

By Minyanville.com Sep 24, 2012 1:51PM
Insurance Money, copyright Comstock Images, JupiterimagesPeregrine Pharmaceuticals' (PPHM) stock collapsed Monday after the company said investors should not rely on previously reported study results for an experimental lung cancer drug because there were problems with the trial.

The company said it discovered "major discrepancies" involving patient test results in a midstage study of the experimental drug bavituximab. Peregrine blamed a vendor and said it's reviewing the problem.

"In the meantime, investors should not rely on clinical data that the company disclosed on or before" Sept. 7 for its lung cancer trial testing bavituximab, Peregrine said in a statement.

Peregrine is seeking U.S. approval of bavituximab as a second-line treatment for lung cancer. Earlier this month, the company said its drug was shown to extend lives of patients in a study. In fact, it was reported that the drug doubled the time of survival for patients in the trial, an impressive feat that is now very much in question.

Shares dropped more than 76% in trading Monday afternoon. The stock soared in recent months, climbing from $0.47 in June to $5.39 a share as of Friday's close.

Bavituximab is being tested for multiple cancers, but the company earlier made the strategic decision, with input from the Food and Drug Administration, that lung cancer was the best near-term opportunity for approval. The drug is in the second of three studies generally needed for U.S. market clearance. The problems with the lung cancer trial were discovered as the company was preparing to meet with the FDA about its research, Peregrine said.

Specifically, the company said it discovered major discrepancies between patient sample test results and patient treatment code assignments. It blamed a vendor hired to code and distribute the drug in the trial. That vendor was not named in the company's news release Monday.

The news throws everything into question for bavituximab, even though the company says it shouldn't affect any other study of the drug. Investors were counting on bavituximab to continue through the regulatory process with additional success for lung cancer.

What's more, CEO Steven King said a number of companies were interested in partnering with Peregrine to pay for additional studies of the drug in lung cancer patients. That now also appears to be in question. 
Tags: PPHM
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