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

Peregrine Pharma: The Partner Guessing Game

Pfizer (PFE - Get Report)? Maybe, except Pfizer bought Coley Pharmaceuticals seeking to develop an immune-boosting therapy against lung cancer. That drug failed in phase III studies, despite posting very strong results in phase II. Will Peregrine prove to be too much deja vu for Pfizer?

Eli Lilly's (LLY - Get Report) drug research efforts are an embarrassment so Peregrine could find a receptive audience in Indianapolis. Then again, a partnership with the drug development clowns at Lilly might be the kiss of death for bavituximab.

The bavituximab phase III study in second-line lung cancer sounds like it will be designed to mimic the results from the phase II study presented Friday. The only major difference will be size and geography. Peregrine expects to enroll 300-500 patients from the U.S. and Western Europe.

My colleague Nate Sadeghi had a smart take on Peregrine this morning. He's a bavituximab skeptic, like me, but feels shorting the stock now is too risky.

"Overall, I'm very skeptical of the results," Sadeghi writes. "Unfortunately, the data don't contain a definitive smoking gun. That could be bad news for the bears, especially given Peregrine's modest market capitalization and the absence of any clear near-term negative catalyst. The company will almost surely initiate Phase III trials, which will take years to produce any data, and I'm not convinced failure in front-line NSCLC will be enough to convince the bulls to sell. The most bullish investors may even start to believe in the potential for accelerated FDA approval of the drug in the second-line setting, although I think that would be extremely unlikely. Nonetheless, my experience suggests that even wildly misplaced hope can drive a $470 million market capitalization towards $1 billion or more over time."

He concludes on owning or shorting Peregrine: "Sometimes it pays to not play."

Agreed.

--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.
2 of 2

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
BMY $57.98 -1.30%
AZN $31.83 -1.30%
GSK $39.66 -2.40%
LLY $80.79 -0.99%
PPHM $1.16 -0.43%

Markets

Chart of I:DJI
DOW 16,130.40 -244.36 -1.49%
S&P 500 1,931.05 -20.08 -1.03%
NASDAQ 4,708.6380 -24.8590 -0.53%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs