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|Company||Peregrine Pharmaceuticals (Nasdaq: PPHM )|
|Submitted on||Dec. 6, 2011|
|Stock Price at Underperform Recommendation||$1.37|
Peregrine Pharmaceuticals profile
|Market Cap||$96.2 million|
YM BioSciences (AMEX: YMI )
Dendreon (Nasdaq: DNDN )
Source: S&P Capital IQ, Yahoo! Finance, and Motley Fool CAPS.
Peregrine Pharmaceuticals has been lingering on my watch list for a few years. I had a piece of them back in 2009 before the 1:5 reverse split and the share price drops left me with little and I realized that the endgame was much further out than I had been playing it.
I only downthumb the 50% spike today that was caused by positive study results on Bavituximab, for reduction of lung cancer tumors, because it is "still early" and investors are far from patient at this stage. The drug is a combo drug used with other chemo drugs and appears to have similar results as Roche's Avastin. The market is sufficiently sized for them to be a nice play if they complete trials, prove safety, prove efficiency and get approval from the FDA but when a drug is already on the market the tendency of the FDA is to be stricter on the followers. Since it is being use with other drugs then results can be harder to measure. A 37% improvement with baxituximab vs 26% with only stand-alone drugs is significant, but will be difficult to correlate to survival benefit and against Roche's Avastin. 2012 is dedicated to longer term studies. Eventually the drug may be useable for other tumors.
In the short run we have a $30 Million per year cash burn rate and only $16 Million in cash. All funding so far has been from dilutive stock issue. Overall the company's stock can suppot more shares issued if it's successful in the end, BUT intermediate investors, those who pop in and pop out, usually with inconsistent expectations as I did two years ago, are not going to ride through the gyrations.
Short term thumb back down, will keep watching as data develops and a date with the FDA can be considered.