Will Peregrine Pharmaceuticals Earnings Reveal Any New Secrets Against Celgene?

Peregrine Pharmaceuticals (NASDAQ: PPHM  ) will release its quarterly report on Tuesday, and investors have kept the stock in a holding pattern throughout much of the year. After some controversy about the company's lead drug a year ago, investors have been waiting to see how its phase 3 trials go before committing to the stock for the long haul. But the big question investors have is whether Peregrine's bavituximab can beat out Celgene's (NASDAQ: CELG  ) Abraxane and other potential treatments to produce the blockbuster drug they want to see.

Peregrine Pharmaceuticals has seen its stock's volatility calm down substantially since its year-ago roller-coaster ride, which came on the heels of apparently favorable clinical trial results that later proved untrustworthy. Although Peregrine tried to recover as much solid data from the trial as possible, the episode largely left investors in the position of having to wait to see if phase 3 trials of bavituximab will confirm what Peregine said about its phase 2 results. Will Celgene end up with a head start that will make it impossible for Peregrine to recover? Let's take an early look at what's been happening with Peregrine Pharmaceuticals over the past quarter and what we're likely to see in its report.

Stats on Peregrine Pharmaceuticals

Analyst EPS Estimate

($0.05)

Year-Ago EPS

($0.08)

Revenue Estimate

$5.74 million

Change From Year-Ago Revenue

(6.5%)

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance

Can Peregrine Pharmaceuticals earnings boost the stock this quarter?
In recent months, analysts have gotten a little more optimistic about Peregrine Pharmaceuticals earnings, narrowing their loss estimates for the current and next fiscal years by a penny per share. The stock has slumped, though, falling 7% since early September.

In September, Peregrine gave investors a roadmap for the company's immediate future. With plans to start its SUNRISE phase 3 trial of bavituximab by year-end to study its effectiveness compared to Sanofi's (NYSE: SNY  ) Taxotere in treating non-small-cell lung cancer, Peregrine hopes that it will serve as an important first step in establishing itself as a successful cancer-fighting agent. Still, with sales of Celgene's Abraxane already having taken off since its approval to fight the disease late last year, Peregrine will face a tough road to make up for lost time against its competition.

In the long run, though, bavituximab could prove important for much wider-ranging reasons. Peregrine's offering is just one of many monoclonal antibodies seeking to make conventional chemotherapy obsolete. Eli Lilly's (NYSE: LLY  ) necitumumab, for instance, has demonstrated its effectiveness in treating squamous non-small-cell lung cancer in phase 3 trials, albeit with some safety concerns related to blood clotting. Investors hope that Peregrine's candidates could eventually produce similarly promising results without the same safety risks and without the painful side effects of conventional chemotherapy.

Peregrine has continued to seek new indications with which it can use bavituximab to treat cancer. Last month, the company released data showing that its antibodies produced tumor-fighting activity in a preclinical melanoma model. Peregrine is also running early stage trials testing bavituximab in breast cancer, liver cancer, and rectal adenocarcinoma, hoping to maximize its breadth in fighting cancer.

In the Peregrine Pharmaceuticals earnings report, watch to see what the company says about its phase 3 bavituximab trial. With so much resting on the trial's success, Peregrine needs to move forward aggressively without duplicating the problems that caused so much controversy in 2012 and uncertainty over the past year.

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