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Why Peregrine Pharmaceuticals Shares Popped

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: Shares of Peregrine Pharmaceuticals (NASDAQ: PPHM  ) , a biopharmaceutical company developing monoclonal antibodies to treat cancer, jumped as much as 19% after the company reported final data on its mid-stage second-line non-small cell lung cancer drug, Bavituximab, at the annual American Society of Clinical Oncology meeting.

So what: According to Peregrine's presentation at ASCO, Bavituximab devliered a median overall survival of 11.7 months in combination with docetaxel compared to just 7.3 months for the control arm. Additional studies also demonstrated slight improvements in overall response rate -- 17.1% for Bavituximab and 11.3% for the control arm -- and a 0.3 month improvement in median progression-free survival over the placebo. The data also suggested that Bavituximab was well-tolerated with a similar adverse events profile to that of the control arm.

Now what: If you've been following Peregrine, you're probably well aware of what a roller coaster that its phase 2 trial was. First the data was a knockout success, then it wasn't to be relied upon, and now it's a success again! Peregrine recently had the Food and Drug Administration lend its approval to the company's late-stage trial strategy and will begin enrolling patients shortly. Given the uncertainty that unfolded during phase 2 trials, I considered this late-stage trial the make-or-break one for Peregrine. Personally, though, I'd suggest keeping your distance, as small-cap biotechs don't have the best track record in producing successes in late-stage cancer trials.

While you can certainly make huge gains in biotechs like Peregrine, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report, "3 Stocks That Will Help You Retire Rich," names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

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.

Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On June 03, 2013, at 2:14 PM, exultation wrote:

    As sure as the sun rises, you can bet your bottom dollar The Motley Fool will come up with a sweeping generalization to bash this stock as soon as some good news surface regarding this stock. The timing is palpable.

    It is to be noted that the phase II trial data was in question not because of the data results, but because of a third-party coding error. The Motley Fool keeps harping on this to create a false sense of doubt as to the integrity of the results of the phase II trial.

    This is precisely one of the reasons why The Motley Fool's credibility is slowly but consistently waning.

    The contributors in bashing this stock do not have anything concrete to back up their claims. All they say is a sweeping generalization that since this stock is small-cap biotech, therefore this stock should fail.

    Clearly, these Motley Fool contributors' agenda is not to protect the interest of the investors, but rather to serve another group's interests.

    Gone are the days when investors could look up to The Motley Fool for some objective and impartial guidance. Now, all you get is baseless assumptions and conclusions premised on nothing but conjectures.

    If only we could turn back the hands of time.

  • Report this Comment On June 03, 2013, at 5:20 PM, investingNideas wrote:

    I thinking of buy more now. haha thanks exultation!

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  • Report this Comment On June 03, 2013, at 10:22 PM, TruffelPig wrote:

    I have to agree with exultation. One shall not forget that due to the coding error the control was a lower dose of Bavi. It is to be expected that the drug will show its effect clearer in the phase III.

    I bought some shares again a while ago - seems reasonable that Bavi will be at least as good as soem other drugs.

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