This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Biotech Stock Mailbag: Oncolytics, Sarepta, Delcath, Peregrine

This was all before FDA, in February 2011, issued a refuse-to-file letter citing unanswered questions about ChemoSat's safety. ChemoSat is already approved in Europe but only as a medical device; FDA considers it a drug and therefore holds approval to a stricter regulatory standard.

Delcath finally resubmitted ChemoSat to FDA on Aug. 15. It took 18 months to refile -- a really long time. Delcath says all the patient records have been updated with the safety data that FDA requested but the company has not told us any details about these data or whether the data will be sufficient to assuage FDA's concerns. This is a risk.

The ChemoSat resubmission also seeks approval of the device replacing the old Generation 1 filter with a new Generation 2 filter. These filters remove melphalan from a patient's blood as the toxic chemotherapy exits the liver before it can enter the bloodstream and cause harm.

These filters play a very important safety function so it's concerning that Delcath is seeking ChemoSat's approval without any Gen 2 filter efficacy or safety data from clinical trials. All of the ChemoSat studies to date have used the Gen 1 filter. That's potentially a big risk.

Delcath CEO Eamonn Hobbs claims FDA deemed it "acceptable" to re-file ChemoSat with the untested Gen 2 filter. The hairs on the back of my neck stand straight up whenever I hear a bio-pharma CEO speak for FDA. Place full trust in Hobbs' assurance about the Gen 2 filter at your peril.

If you're a trader interested in Delcath and any possible stock run-up, watch for FDA's acceptance of the ChemoSat resubmission, which should be announced at the end of September or mid-October at the latest. If FDA decides to review ChemoSat and grants priority review, the approval decision date will be mid-February 2013. A standard review will extend the approval decision date to June 2013.






Alfred Y. asks, "Since your last article on Peregrine Pharmaceuticals (PPHM - Get Report), it has been on fire. What is behind the shoot up in the price?"

Stock promotion. Speculation. Momentum trading. Hype. Short-covering. Low-volume summer trading. Take your pick. What hasn't changed about Peregrine since my July 20 Mailbag is the company's fundamental outlook. It's still poor. That's what I focus on, not short-term movements in the stock price in either direction.

Peregrine is presenting updated overall survival data from bavituxmab's phase II study in second-line non-small cell lung cancer on Sept. 7. At best, we'll likely see a non-statistically significant trend in survival favoring bavituximab. I won't be surprised or impressed considering the mediocre data released from this study already, combined with the outright failure of bavituximab in the first-line lung cancer trial.

Remember what I've said about paying more attention to what biotech executives do rather than what they say. Peregrine sold 3 million shares of stock through its At-The-Market (ATM) financing vehicle between April and June at an average price of 49 cents per share. Peregrine sold this stock in the dark while telling investors publicly how excited it was about the bavituximab lung cancer data and boasting about all the interest the company was receiving from potential partners.

--Written by Adam Feuerstein in Boston.



>To contact the writer of this article, click here: Adam Feuerstein.

>To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein.

>To submit a news tip, send an email to: tips@thestreet.com.

Follow TheStreet on Twitter and become a fan on Facebook.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DCTH $0.88 0.00%
ONCY $0.72 0.00%
PPHM $1.32 0.00%
SRPT $26.22 0.00%
AAPL $132.54 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs