Why Peregrine Pharmaceuticals Popped, Then Flatlined

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: The rally in cancer-focused biopharmaceutical company Peregrine Pharmaceuticals (NAS: PPHM) continued for a second straight day, with the company up as much as 14% at its peak, following positive data from its lead non-small cell lung cancer drug and after reporting its first-quarter results this morning. However, the stock has given up all of its gains and is unchanged as of this writing.

So what: The immediate news this morning was Peregrine's first-quarter report, which showed a 25% drop in revenue to $4.25 million largely due to lower contract revenue at its subsidiary Avid Bioservices, and a loss $0.07, which was better than the $0.11 loss it had reported in the year-ago quarter. A 13% drop in expenses aided Peregrine in reporting a smaller loss.

The big news remains the positive results of bavituximab in a phase 2b trial released late last week. In combination with docetaxel versus a placebo trial that just used docetaxel by itself, bavituximab demonstrated a doubling in survival rates and was generally well tolerated. Bavituximab is a second-line treatment for stage 3b/4 NSCLC patients that have had at least one chemotherapy regimen.

Now what: Now we wait for additional data. I would really love this to be a positive move toward better care for cancer patients, but smaller biotechnology companies have a very poor track record when it comes to developing cancer treatments on their own. The excitement around the drug is justified, but I'd really like to see those phase 3 results before I get in an uproar.

Craving more input? Start by adding Peregrine Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.

The article Why Peregrine Pharmaceuticals Popped, Then Flatlined originally appeared on Fool.com.

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