Two weeks ago, Peregrine Pharmaceuticals Inc. was flying high. The Tustin, Calif.-based company surprised Wall Street with statistically significant interim survival data from its Phase IIb trial of cancer drug bavituximab and said it was in potentially lucrative partnering talks. But on Monday, the firm's shares lost three-fourths of their value as investors learned that those Phase II results might not turn out to be that impressive after all.
While preparing for an end-of-Phase II meeting with the FDA, Peregrine discovered what it called "major discrepancies" between some of the patient sample test results and treatment code assignments.
The specific nature of those discrepancies was not disclosed, though it was attributed to an independent third party contracted to code and distribute investigational drug product, but the company warned investors not to rely on previously reported results from the 121-patient Phase IIb study testing bavituximab plus docetaxel in non-small-cell lung cancer (NSCLC).
Peregrine added that the discrepancies are specific to the Phase IIb trial and should not affect any other studies testing bavituximab, a phosphatidylserine-targeting monoclonal antibody. The company declined to comment further while the investigation is ongoing.
The news is a huge blow to Peregerine, which had been trading under $1 and facing a Nasdaq delisting at the start of summer before excitement began generating for bavituximab, culminating in a presentation at the Chicago Multidisciplinary Symposium in Thoracic Oncology earlier this month showing a statistically significant improvement in overall survival for patients with refractory NSCLC receiving bavituximab plus docetaxel vs. placebo plus docetaxel (12.1 months for the pooled bavitumxab arms vs. 5.6 months in the docetaxel-only arm, p = 0.0154).
Phase IIb data also showed a doubling of median overall survival in the bavituximab-containing arms compared to the control arm.
Peregrine previously had reported top-line data from the study showing impressive overall response rates, but it was the overall survival data that prompted analyst Joseph Pantginis, of Roth Capital Partners, to note in a Sept. 10 research report that the company had "delivered in a big way," adding that the impressive results should "increase partnering potential for bavituximab." (See BioWorld Today, May 22, 2012.)
Peregrine's stock (NASDAQ:PPHM) had gained a whopping 898 percent since June 1, closing Friday at $5.39, only 11 cents off its 52-week high of $5.50.
Not everyone was swayed by the early Phase IIb data, however.
Analysts on the bear side have pointed out that the 5.6-month overall survival for the chemotherapy-only arm was lower than expected and worried that the survival improvement for bavituximab might not translate as dramatically in Phase III testing.
Whether those concerns are justified remains to be seen. Peregrine has not disclosed a time frame for concluding its investigation into the coding errors.
But the news clearly shook investor confidence, sending shares crashing Monday to $1.16, a loss of $4.23, or 78.5 percent.
It creates a "major void of uncertainty" for Peregrine, Pantginis noted. "We would like to envision that the impact on the clinical data . . . will be minimal," he added, though there is no indication yet as whether the discrepancies will "ultimately impact bavituximab's previously indicated survival benefit in second-line NSCLC."
Besides NSCLC, Peregrine is in earlier trials testing bavituximab in combination with chemotherapy in pancreatic cancer, hepatocellular carcinoma, castration-resistant prostate cancer, HER2-negative metastatic breast cancer and rectal adenocarcinoma.
The firm, which reported a net loss of $7.7 million, or 7 cents per share, for its first quarter for fiscal year 2013, had about $19 million in cash and equivalents as of July 31. In August, it added $15 million in initial funding under a $30 million term loan from Oxford Finance, MidCap Financial and Silicon Valley Bank and has the option to receive an additional $15 million.